There were a core of us there that thought this has completely radically changed the way the world works. The old world, the institutions owned the information. We trusted them because we had no alternative but to trust them. They were, for example, they were the media and they told us this is the event you need to look at. The fact that there were many other events that were not being discussed wasn’t obvious to anybody because they chose the same narrow set, or you were the government and you’d say, “Well this is what’s important.” You explained why it was important and you explained how it should be interpreted.
Category Archives: books and book reviews
What I’m Reading
Why Culture Matters Most, by David C. Rose.
I will have finished it by the time this post goes up. It is a valuable book on the whole. Let me state my initial reservations.
1. He makes the claim that culture matters more than institutions. But he doesn’t sharply delineate between the two. Early on, he says
Culture pertains to knowledge transmitted across generations through imitation and teaching rather than through genes.
Later, he writes
“institutions” refers to consistent patterns in how we do things
Still later, he writes
when someone says the word “culture,” for many the image that jumps to mind is some kind of consistent practice within a given society
Do you see my problem?
2. The crucial cultural issue for Rose comes down to trust, and the concept of a “high-trust society.” I am pretty sympathetic to the focus on what I would call cooperation and defection, but I worry that such a focus may be a bit too narrow.
3. There approach may owe too much to economics. This is related to point 2.
In the end, I may decide that (2) and (3) are virtues rather than bugs. But I expect to remain somewhat annoyed by (1).
Kevin Erdmann on housing
Four main urban centers—New York, Los Angeles, Boston and San Francisco—share two important characteristics: They’re centers of new economic opportunity, and they permit new housing at rates much lower than their successful peers. Call them closed-access cities.
. . .The prudent path toward a stable housing market is more construction, more lending and more homeownership. Housing restrictions make economic growth painful by overinflating the price it takes to access the gains. Until they are reformed, many Americans will be stuck in the hopeless circumstance of running from booming regions rather than toward them.
You know Erdmann’s views from reading his comments on this blog and from reading Idiosyncratic Whisk. But the essay excerpted above appeared in the Wall Street Journal.
Kevin’s book, Shut Out, is available. Ironically, the Mercatus Center’s publisher is charging $34 for you to read the book on Kindle, and more for the print version. Talk about shut out!
Behavioral meta-economics
From my essay on Pascal Boyer’s Minds Make Societies.
Concerning economic inequality, Boyer writes,
… the economy or society as a whole is construed as a gigantic collective action, to which everyone contributes in one way or other, and from which they may receive rewards.
… humans do not generally believe that any individual’s contribution could possibly be hundreds or thousands of times greater than anyone else’s.This reinforces the instinct that economic inequality must be derived from power rather than from merit.
You might call this behavioral meta-economics. Like behavioral economics, it looks at human inclinations to commit errors. But what I mean by behavioral meta-economics examines human inclinations to commit errors in assessing markets and large-scale society.
The challenge that economics teachers face is helping their students to understand and overcome behavioral meta-economics. Although he did not use that term, I think Scott Sumner’s post expressing doubts about the value of teaching behavioral economics is derived from a view that teaching behavioral economics might be counterproductive in getting students to overcome their behavioral meta-economics.
My review of Pascal Boyer
Boyer writes,
… the economy or society as a whole is construed as a gigantic collective action, to which everyone contributes in one way or other, and from which they may receive rewards.
… humans do not generally believe that any individual’s contribution could possibly be hundreds or thousands of times greater than anyone else’s.This reinforces the instinct that economic inequality must be derived from power rather than from merit.
I found Minds Make Societies to be highly valuable, and I am disappointed that it seems to have been mostly overlooked. Don’t overlook my review.
Government is a branch of culture
Scott Alexander proposes that we think of culture as a branch of government.
Each branch of government enforces rules in its own way. The legislature passes laws. The executive makes executive orders. The judiciary rules on cases. And the culture sets norms. In our hypothetical world, true libertarians are people who want less of all of these. There are people who want less of the first three branches but want to keep strong cultural norms about what is or isn’t acceptable . . .The real libertarians also believe that cultural norms enforced by shame and ostracism are impositions on freedom, and fight to make these as circumscribed as possible.
Sounding like one of Alexander’s “real libertarians,” one of my commenters complains about,
. . . A tiny subset of the population, media-ready and always on, always practicing PR, permanently in performance mode, not expressing themselves except in precisely those expressions that can be guaranteed to win the approval of the bigots and authoritarians who appointed themselves the police of society. Enforcers of conformity. Stamping out creativity. Stomping on self-expression.
I think it is best to take Scott Alexander’s view and turn it around: government is a branch of culture. I suggest defining culture as socially communicated practices and beliefs. We may think of government as the subset of practices and beliefs that are defined formally and enforced coercively.
Take property rights. We can think of them as culturally defined, even in the absence of government. But property rights take on more significance when the government establishes and enforces them. De Soto in The Mystery of Capital argues that without formal property rights an economy cannot develop properly.
Just as an economy has both a formal sector and an informal sector, culture has both a formal and an informal sector. The formal sector is where norms are enforced by government.
As a metaphor, think of footpaths. The paths where people walk are culture. Those paths that are not paved are the informal sector. Those paths that are paved are the formal sector.
Alexander argues that the proper libertarian position is to oppose enforcement of social norms, either formally or informally. But you cannot have a society without social norms, and you cannot have meaningful social norms without enforcement.
I think that a more viable libertarian position is that where social norms are contested, contests should be resolved peacefully. You don’t want the Protestants and Catholics burning heretics and fighting civil wars. But if Protestants want to engage in nonviolent attempts to set standards of behavior for Protestants and to convert Catholics to those standards, then that is ok.
A hard case for libertarians is when Google fires James Damore on religious grounds. Whose religious freedom should concern us most, Google’s or Damore’s? And once we choose sides, do we want the formal cultural institution, namely government, to enforce our point of view?
Libertarians often seek black-and-white answers, but I don’t think they are always easy to find.
Martin Gurri watch
The information balance of power has changed, writes Martin Gurri in a new book, “The Revolt of the Public,” which dissects with originality and depth the impact of the Internet on the political culture. “A generation ago, the public could exist only as a passive audience,” he writes of the great age when the daily newspaper was the king of the mountain and television news was dispensed on a reassuring hierarchical model, from the top down.
Populist is an elite term. It seems to imply that certain opinions are popular when they shouldn’t be. Populists of a nationalistic strain have won elections, handily and repeatedly, in Hungary and Poland. In Italy, two very different populist parties, cats and dogs together, share in running the most popular government in Europe, with 68 percent approval ratings. (By comparison, Macron’s approval numbers have plummeted as low as 23 percent.) Elites ascribe these victories to demagoguery: populists win elections by misleading the public. The reverse of this proposition is more nearly correct. Populist parties and politicians are riding, sometimes uneasily, on the wild kinetic energies surging from a mutinous public.
The post is about France. The Yellow Vests sound like they leaped right out of the pages of The Revolt of the Public.
Two Reviews of Nancy MacLean
Both probably gated for you.
1. Writing in a WSJ compendium of what people read in 2018, Patricia O’Toole writes,
The acute inflammation of the American body politic prompted close readings of Jane Mayer’s “Dark Money” and Nancy MacLean’s “Democracy in Chains.”
2. Writing a long review in the Journal of Economic Literature, Jean-Baptiste Fleury and Alain Marciano write,
MacLean does not provide convincing proofs to sustain the accusations she makes. Determined as she is to portray one man as the mastermind of her story, MacLean tries to make everything fit into that implausible assumption, no matter the cost. This gives an account marred by imprecisions, mistakes, distortions, unproven assumptions about the motives behind each character’s actions, and sometimes a surprising lack of rigor. Sadly enough, it is only by misrepresenting her main characters that MacLean can construct the story she insists on telling and that, in the end, proves unconvincing.
If would bet that Ms. O’Toole, a professional historian, will stay safely within her bubble. It is unlikely that she will ever see the review in the JEL; on the off chance that she does read the review, my guess is that she will find some excuse to dismiss it.
I answer two questions
At the blog of Joseph Gray, an aspiring young economist.
My first thought is Fischer Black. You absolutely must read Perry Mehrling’s biography of him. If nothing else, you get a sense of what the 1970s felt like, both in the culture at large and in the economics profession.
More at the link. You might also check out the questions that he asked other economists, and their answers.
Podcasts of the year, 2018
This year, I probably listened to more podcasts (usually on a computer, often with video) than I have any other year. The podcast browser is a useful recommender. Podcasts emerged as the medium of choice for the Intellectual Dark Web. If you search YouTube for Jordan Peterson, Eric Weinstein, Jonathan Haidt, or Steven Pinker, you can find dozens of hours of material. For the most part, I still believe that the printed word is a superior medium. But sometimes the podcasts rise to a high level, particularly when they are conversations. My top list:
1. Tyler Cowen and Paul Krugman.
2. Ezra Klein and Jonathan Haidt.
3. Russ Roberts and Yoram Hazony.
4. Russ Roberts and Bryan Caplan.
5. Ezra Klein and Lilliana Mason.
6. Russ Roberts and Bill James.