Author Archives: Arnold Kling

The Solow Model: is it the GOAT?

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It is probably too late to write a biography of Robert Solow. He has outlived his teachers, his peers, and even some of his students, which makes it difficult to gather material. I do think that biographies of economists can be very insightful, and I would encourage any young economist or economic journalist to search for an interesting subject. Of the living Nobel Laureates, the ones I would most like to read about are Solow, Vernon Smith, George Akerlof, and Robert Merton. Probably also Paul Romer, although there is some discussion of him in David Warsh’s Knowledge and the Wealth of Nations. From the business world, Hal Varian and Bob Litterman come to mind, although I am no doubt forgetting a number of interesting business economists.

Here, I will sketch my experiences with Solow and my impressions of him. Continue reading →

Fringe/center, left/right

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I stuck with Eric Weinstein and Sam Harris for a long time, even though much of the discussion did not excite me. But starting around 2:10 (that is, two hours and ten minutes in), there are three interesting minutes. At one point, Harris says that the far-left fringe influences the mainstream left, whereas the far right fringe does not influence the mainstream right.

I think that is going to be a very controversial statement, so let me suggest how to think about it. What are the examples of actions or positions that people of the mainstream right (and for this purpose, I will allow you to include President Trump in the “mainstream right”) where a reasonable neutral person would agree that (a) your accusation about the mainstream right is correct and (b) that the action or position comes from the fringe right, and if you took away the fringe right it would go away.

For example, if you say that President Trump is anti-semitic, then I would say that this satisfies (b) but not (a)–that is, a reasonable neutral person would not agree that he is anti-semitic. Or if you say that President Trump and others on the mainstream right are nationalistic, I would say that satisfies (a) but not (b). That is you cannot argue that nationalism is a sentiment that would disappear from the right if the fringe would go away.

I think that the strongest case one might make would be with regard to anti-immigrant rhetoric. Clearly, the mainstream right-wing view has shifted since President Reagan’s day, and it has moved in the direction of the right-wing fringe.

Now apply these tests to the left. The NYT’s “1619 project” strikes me as an example of fringe left going mainstream. So does Google’s firing of James Damore. So does the local synagogue where I go dancing on Mondays where “men” has been replaced by “urinals and stalls” and “women” has been replaced by “stalls only.” So do the women’s athletic events that have been won by biological males.

So I think that Sam Harris’ point is basically correct. I think that if I were a Progressive, I would argue that for the left to adopt ideas from its fringe is more of a feature than a bug. Often, it seems that eventually the center (not just the left) does tend to “catch up” with ideas that start on the Progressive fringe. Gay marriage is among many examples that come to mind.

The problem is that there are plenty of fringe ideas on the left that do not deserve to become mainstream. Left-wing anti-semitism comes to mind.

My conclusion is that we do need to apply a filter to left-wing fringe ideas. And we cannot count on left-wing moderates to provide that filter. It could be that the mission of the center-right is to provide a filter for both the fringe ideas on the right and the fringe ideas on the left. But that means that we should not want the center-right to go extinct.

Evaluating organizational effectiveness

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Tyler Cowen writes,

The US funds more science research than any other country — about $35 billion per year on the NIH and $8 billion per year on the NSF. How exactly do these institutions work? How have they changed over time and have these changes been for good or bad? Based on what we now know, how might we better structure the NIH and NSF? What experiments should we run or what kind of studies should we perform?

This is the first in a long and varied list of areas he thinks are worthy of further study. One more example:

Indonesia is a large, populous middle-income country. It faces no major near-term security threats. It has a small manufacturing base and no major non-commodity export sectors. What is the best non-bureaucratic 10 page economic development briefing document and set of prescriptions that one could write for Indonesia’s president? For Indonesia, substitute Philippines, Chile, or Morocco.

Many of the topics in Tyler’s list involve attempts to improve or evaluate organizational effectiveness. I would say that in evaluating an organization, look for common flaws, listed below. Give high marks to organizations that are able to avoid these pitfalls.

1. A good mission statement will serve to narrow the purpose of an organization. It will remind everyone what the organization will not attempt to do. In badly-run organizations, the scope of the organization is unclear.

2. The organization should have a formal planning process. About once a year, or once every other year, the organization should evaluate past performance and set future goals. Middle management as well as top management should be involved in this planning process, in order to try to achieve alignment between strategic goals and departmental activities. In badly-run organizations, departments run on auto-pilot without any strategic direction.

3. Borrowing terminology from Morrisey, et al, The planning process should include Key Results Areas and Indicators of Performance. For example, a city could have a Key Result Area that is reducing traffic congestion, and an Indicator of Performance that is the number of workers who are able to commute during rush hour in less than 30 minutes. Middle managers strongly resist KRAs and IOPs. Instead, they prefer to be measured on the basis of activities–how many traffic lights they installed, or how many potholes they filled. A grant-making organization that measures how many grants get approved rather than anything related to the results from making those grants is operating on auto-pilot. In badly-run organizations, departments do not articulate meaningful KRAs and IOPs.

4. Organizations need to periodically adjust their incentive systems. Top management wants maximum effort with minimum outlays. Employees and other recipients of funds want the opposite. Over time, the compensation system degrades, due to changes in organizational goals and due to recipients learning how to game the system. Badly-run organizations leave ineffective compensation systems in place.

5. Some departments or projects falter. Can the floundering projects or departments be put back on track at a reasonable cost? If not, then they probably should be shut down. Badly-run organizations are unwilling or unable to identify and deal with low-achieving activities.

6. Organizations need periodic adaptation, including restructuring. The environment changes–think of the effect of new computer and communications technologies on many areas. Badly-run organizations fail to adapt to changes.

My guess is that you could use this framework to evaluate many of the institutions mentioned in Tyler’s list. But in the case of government agencies or non-profits, will such evaluation make a difference?

Violating Amazon review guidelines

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I read a baseball book called Year of the Pitcher. The title refers to 1968. I attempted to give
it a review of two stars on Amazon. My headline was not for baseball fans I wrote

If you’re looking for a lot of pages on how Jackie Robinson wrestled with his political loyalties, then this is your book. And if you did not know that African-Americans, including baseball players, suffered from Jim Crow laws in the early 1960s and a good deal of residual prejudice well beyond those years, then you will learn something. If you haven’t read David Halberstam’s book on 1964 then the stories about Bob Gibson’s sensitivity and the Cardinals’ relatively good internal racial relations will be new to you.

But if you are curious about the career years that several pitchers had (in terms of ERA, Luis Tiant and Sam McDowell come to mind) or about how many more fans showed up when Gibson was starting than when other Cardinal pitchers were starting, or about how the new St. Louis ballpark in 1966 affected Cardinal pitching statistics, you won’t find answers here.

As a fan, I found myself going to baseball reference’s page on annual major league pitching statistics (https://www.baseball-reference.com/leagues/MLB/pitch.shtml) to see what made 1968 different. It turns out that home runs per 9 innings were low, but not at an all-time low. Walks per nine innings were at an all-time low. Above all, the batting average on balls in play was the lowest of all time. You get the impression that with the strike zone favoring pitchers, batters had to swing at marginal pitches, making weak contact.

The review was rejected for violating their guidelines. The guidelines include not allowing external references so technically the review violates that guideline.

I have only had two reviews ever rejected. In each case the review was less than three stars. Perhaps this is coincidence, but I wonder whether bad reviews may be filtered more carefully through the guidelines.

Status-seeking services

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Kevin Erdmann writes,

I suspect there is a combination of mismeasured well-being and variance in well-being that is largely played out in status seeking services. Thus, measured inequality seems high even though most households can purchase basic goods at real costs that are far below what they were in 1970.

If you earn $100,000 and spend $60,000 on status-producing services (rent in an expensive city and/or tuition for your child at a brand-name college) and I earn $50,000 and spend nothing on those services, then the raw income data say that you are twice as well off as I am. But are you that much better off, or are you even better off at all?

A review essay on racial differences

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William Voegeli writes,

Unfortunately, the “essential unity of the human species,” noble concept though it may be, is a cosmic or moral axiom rather than a scientific principle. Guarding science against abuse begins with making empirical observations accurately and reporting them scrupulously, even when the data cast doubt on our most cherished beliefs and aspirations. No intellectually honest writer would say, “Some have speculated that Kenyans might have, on average, longer, thinner legs than other people,” any more than she would say, “Some have speculated that Pygmies might be, on average, shorter than other people.” These are verifiable facts, not tendentious conjecture.

He reviews several books, and he argues against the approach of making some beliefs sacred rather than contestable.

To me, the essay illustrates how much easier it is these days for a non-Progressive than a Progressive to write about race without getting tied up in intellectual knots, contradictions, or racism.

Essay backup: Reid Hoffman and Patrick Collison, annotated

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Below is the last of the essays from Medium that I need to back up. I have found Medium to be a major disappointment in every respect. My own essays there got zero promotion, as far as I can tell–they would have been as widely read if I had written them as blog posts.

The essays that are promoted to me by Medium (I am not clear on how they mix human curation with an algorithm) in their daily letter are almost invariably insipid. My impression is that 95 percent of the writers on the site cater only to the dogmatic and extreme left.

In the days when the blogosphere was the main form of self-published writing on the Internet, I think that the decentralized editorial curation process worked pretty well. With the demise of the blogosphere, and what are we left with? Twitter? Ugh.

A few months ago, a commenter on this site predicted that the intellectual failure of Medium would be followed by financial failure. That possibility alarmed me because, unlike all of my other essays, my Medium essays were not originally written on my computer. So I have no backups should Medium suddenly shut down. Hence, these backups.

I hope that Medium continues and that my essays stay there, where they are properly formatted. But going forward, I will place my essays elsewhere, primarily on this blog.

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