Category Archives: books and book reviews

Russ Roberts and Yuval Levin

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The latest episode of econtalk. Recommended. A snippet:

We don’t think enough about how unusually cohesive and consolidated America was coming out of the Second World War, after the experience of the Depression; but even more than that, half a century of industrialization, of mass media, of progressive politics left American life intensely cohesive and consolidated and focused on national unity, on solidarity above individual identity and individualism generally. And what’s happened since that time is the breakdown of that consolidated culture–the liberalization, we would say in a positive sense, or the breakdown in a negative sense–the culture has become much more fragmented

This reminds me a bit of Brink Lindsey’s The Age of Abundance.

Recall my review of Levin’s book.

My Essay on Martin Gurri

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Probably the longest book review I have written. But Gurri’s book is probably the most important one I have read in the past couple of years. One snippet of the review:

The insiders’ advantages include institutional continuity, the ability to mobilize large resources, and experience at choosing strategy and tactics. The outsiders’ advantages include rapid evolution by trying many tactics and quickly discarding those that fail, the ability to use information that gets filtered out by insider institutional processes, and unshakable conviction in their cause.

A central point of Gurri’s analysis is that the Internet and social media have altered the balance between insiders and outsiders with respect to information. Fifty years ago, outsiders lacked access to a lot of the information that was available to insiders.

What I’m Reading

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Scientific Perspectivism, by Ronald N. Giere. Based on a reader’s suggestion that I try to get up to speed on philosophy of science since the 1960s. He is trying to find a middle ground between scientific objectivism and social constructionism. The former says that there is absolute truth, and science is the process for discovering it. The latter says that all scientific beliefs are socially constructed, and hence none can claim to be Truth.

From p. 15:

Perspectivism makes room for constructivist influences in any scientific investigation. The extent of such influences can be judged only on a case-by-case basis, and then far more easily in retrospect than during the ongoing process of research. But full objectivist realism (“absolute objectivism”) remains out of reach, even as an ideal. The inescapable, even if banal, fact is that scientific instruments and theories are human creations. We simply cannot transcend our human perspective, however much some may aspire to a God’s-eye view of the universe. Of course, on one denies that doing science is a human activity. What needs to be shown in detail is how the actual practice of science limits the claims scientists can legitimately make about the universe.

In economics, we want to make is seem as though the “science” is objective, and all policy differences are ideological. In fact, differences of “scientific” opinion are not so objective. Many economists process this as “the other guy is a blinkered ideologue, but I’m not.” But nobody has a God’s-eye view of the economy.

Stability Leads to Instability

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What Hyman Minsky said about finance, others say about global politics. Stephen M. Walt writes,

prolonged periods of peace may also have a downside: They allow divisions within different societies to grow and deepen. Even worse, they may eventually drive the world back toward war.

A book I recently finished reading, Peter Turchin’s War Peace and War, offers a similar thesis.

It is an idea that puts libertarians in a bind. A progressive can advocate for “the moral equivalent of war” to try to hold together a strong state. Libertarians do not want a strong state to begin with. On the other hand, we do not want to see violence among ethnic groups or populist illiberalism, either.

Michael Barone praises my new book

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At the end of his piece, He writes,

Donald Trump’s promise to “make America great again” promises restoration of a rosily remembered but largely mythical past. Abrogating trade agreements won’t create half a million auto and steel jobs. Trump’s penchant for deal-making and crony capitalism means propping up insiders and preventing job creation.

Kling says he’s voting for Gary Johnson. You can see why.

So evidently he reads the blog, also.

By the way, there are only two reviews of the book on Amazon, and both are rather terse. So when you’re finished reading it, . . .

A Modern Jubilee Year?

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In an email exchange, I wrote

“I have been reading War Peace and War by Peter Turchin, and I came across this:

When land becomes a scarce commodity. . .Those who do not have enough land to feed themselves will have to start selling what they have to make up the difference. As a result, they become poorer. By contrast, those who have more land than they need to feed themselves will have a surplus income that they can use to acquire even more land. Thus, the rich get richer.

This might explain the custom of the Jubilee year. To stop what otherwise would be a strong tendency for wealth to concentrate, particularly when a society is typically operating close to the Malthusian margin. If you don’t employ such a custom, the society is likely to disintegrate.

This also may account for the laws against usury. People on the brink of starvation will need to borrow. If they are charged interest, you will have poor people getting poorer and rich people getting richer.”

To which, my correspondent replied,

That makes sense. Does this spark any more thoughts on how this concept/phenomenon plays out in today’s world where land isn’t necessarily the key commodity and what an equivalent system might be to abate the issue?

My thoughts.

1. As an aside, land is still an important source of wealth, but it is not the land per se. Rents are high in Cambridge, but that is not because of the fertility of the soil.

2. That is not the only difference between our economy and the sort of agrarian society that Turchin is focused on or which gave rise to the Jubilee year. We no longer are in a Malthusian population situation. In the developed world already, and pretty soon almost everywhere, we have the demographic transition, in which the number of children born to each woman falls dramatically. Humans have created many tangible assets (roads, sewer systems, communication tools, factories, etc.) as well as intangible assets (rule of law, pro-social norms and customs, knowledge, etc.) As a result, there is no reason that people have to be pushed to the margin where they have to sell everything they have in order to eat.

3. Still, there may be other forces that cause the rich to get richer and the poor to get poorer. Let’s not worry about the rich getting richer, but instead worry about why the poor might be getting poorer. Maybe poor people pass along genetic endowments to their children that are adverse. Maybe poor people lack access to mainstream banking, and this makes their everyday transactions more costly. Maybe poor people are stuck with bad schools.

4. Suppose we believe that poor people themselves best understand why they are poor. In that case, it would be better to give them money than to have legislators and bureaucrats design packages of benefits like food stamps and Medicaid and so on. My own guess is that this is the best way to go (although like anything else, it would not be perfect). In that case, the modern equivalent of the Jubilee year would be to get rid of all the social programs and replace them with a fairly large cash payment. This is known these days as Universal Basic Income. It has proponents and opponents on both ends of the political spectrum.

Yuval Levin praises my book

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Actually, he praises two of them.

His 2013 book The Three Languages of Politics is a great example of that. The book sheds a bright light on our political life by arguing that progressives, conservatives, and libertarians tend to see political questions as arrayed along three distinct axes: Progressive think about politics along the oppressor/oppressed axis; conservatives think in terms of the civilization/barbarism axis; and libertarians think in terms of the freedom/coercion axis. . .Try that insight on for a minute as a lens through which to look around at our politics and you’ll find that an awful lot of our debates make much more sense.

Kling’s latest book, out this week and available practically for free on Amazon, is to my mind his greatest contribution yet. Specialization and Trade: A Re-introduction to Economics, is as ambitious as its subtitle suggests. Kling argues that our understanding of the fundamental character and purpose of the discipline of economics has been distorted by the form that the professionalization of the discipline has taken.

Those are just excerpts. More kind words at the link.

You can now read my latest book!

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This link goes to the Kindle version, which will set you back $4 (or is it free?), plus your time. Paperback version will be available soon.

As of this moment, the Amazon site calls me the “editor” of the book rather than the author. That will be corrected eventually.

The main point of the book is that you need to keep in mind the overwhelming complexity of specialization in a modern economy. Non-economists miss it when they use simple intuition. And academic economists tend to miss it when they build their “models,” particularly of the GDP factory.

Any reader of this blog will be able to follow the book. But what I really want is for everyone who is about to start graduate school in economics to read this book. I want to say to such students, “Don’t get too suckered in by what your professors are going to be showing you about how to do economics. Don’t let them lead you to forget about specialization and trade.”