Category Archives: books and book reviews

The Goldwater Debacle

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I have finished reading my advance copy of Yuval Levin’s The Fractured Republic. I am confident that when I make up my list of most important books of 2016 that it will be included. Unfortunately, it does not go on sale for another three months.

Levin attempts to interpret extended periods of economic, cultural, and political history in terms of broad themes. Given that such an effort takes huge risks (of which he is aware), I think he does a very creditable job. But these sorts of high-level analyses are always subject to quibbling over details.

One such detail concerns Lyndon Johnsons’ Great Society. Levin–and he is hardly alone in this–sees the legislation of 1965 as a natural product or capstone of an era in which the Federal government took on increasing responsibilities.

I want to push back and to stress the idiosyncratic and accidental nature of the Great Society legislation.

1. Johnson never succeeded in selling his program to the public. The public’s attitude toward the Great Society was predominantly scornful and cynical. Grace Slick, before she became the lead singer for Jefferson Airplane, was in a band called The Great Society. It was not an homage.

2. The left had very mixed feelings about Johnson. Many northern liberals were put off by his southern accent. They were still in mourning over Kennedy and many were put off by Johnson’s lack of the Kennedy charm and grace. Also, by 1965, Vietnam was cutting deeply into his support among liberals, particularly younger ones. And there seemed to be a disconnect between the term Great Society and the urban unrest that was starting to erupt. Rather than wishing to share in the glory of the Great Society, many liberals saw it as an exercise in Johnson’s ego and parliamentary wiles.

3. What made the Great Society possible was the landslide victory that Democrats won in 1964. In that sense, we owe the Great Society to Barry Goldwater. His nomination shattered the Republican Party. In today’s terms, think of an effect on the Republican establishment somewhere between a Cruz nomination and a Trump nomination. Moderate Republican voters stayed away in droves in 1964, and in those days coattail effects were much stronger. As a result, the disaster of 1964 decimated Republicans up and down the ballot. There are those on the right who like to romanticize the Goldwater insurgency by saying that it “paved the way for Reagan.” What it actually paved the way for was Democratic control of Congress that remained well entrenched into the Reagan era and beyond. It was the class of 1964 that passed the Great Society programs and that made them impossible to repeal even when Republicans re-took the Presidency.

It can be difficult to predict the consequences of one’s preferred candidate winning a nomination or an election. That is one reason to agree with Tyler Cowen that you should be careful what you wish for.

Yuval Levin’s Forthcoming Book

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It is called The Fractured Republic: Renewing America’s Social Contract in the Age of Individualism. I just received an advance copy, and it went straight to the top of my queue. It is due out May 24, which means that I will probably have written a review three months earlier. No point in publishing a review so early, of course.

Meanwhile, here is a quote from the middle of the last chapter (I started reading the book at the last chapter, and then I’ll go back and read the rest).

Our highly individualist, liberationist ideal of liberty is possible only because we presuppose the existence of a human being and citizen capable of handling a remarkably high degree of freedom and responsibility. We do not often enough reflect on how extraordinary it is that our society actually contains such people. . .

liberty arises when we want to do more or less what we ought to do, so that the moral law, the civil law, and our own will are largely in alignment, and choice and obligation point in the same direction. . .

It requires a commitment precisely to the formative social and cultural institutions that we have seen pulled apart from above and below in our age of fracture. They are where human beings become free men and women ready to govern themselves.

If you are familiar with his thinking, then you can predict that he will proceed to extol the virtues of civil society. If Yuval Levin were sitting in front of a caricaturist, I would tell the artist to draw Levin carrying around a hammer labeled “Burke’s ‘little platoons'” and seeing nails everywhere.

You also can predict that his writing will be clear, insightful, and persuasive. Above all, Levin exemplifies being charitable to those who disagree, without stooping to Brooksian obsequy. This is about as harsh as he gets:

In domestic affairs, the power of the executive branch is now wielded out of the White House to a greater degree than at any point in our history, not only because of President Obama’s distinctly belligerent overreaching, but because of the efforts of presidents (and the willing collusion of Congresses) of both parties over several decades.

What Students Actually Are Told to Read

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Peter Berkowitz writes,

The books that dominate are “recent, trendy, and unchallenging.” Racism has been the most popular subject the last two years. Many books feature adolescent protagonists. Works dealing with immigration and environmentalism or, to use the trendier term, sustainability, were featured frequently. Several colleges selected works about transgender identity. Books about military and diplomatic history, particularly ones that depict valor on the battlefield and prudence and statesmanship in government, are rare.

To me, the lesson from the typical recommended reading list is one of dogmatic conformity. If you go back to my list, I think you will find a lot more diversity. My goal is to stimulate someone to think, not to drive home a particular set of beliefs.

The Big Short on Outsider Personalities

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This weekend I watched The Big Short. The movie makes a big deal, as does the book, about the odd personalities of the investors who saw the financial crisis coming more clearly than others. Some thoughts on that:

1. If the typical normal person (or normal investor or normal regulator) saw a financial crisis coming, then it would not occur.

2. At any one time, there are lots of outsiders forecasting extreme events. If you bet on outsiders all the time, most of the time you will lose.

3. The challenge for insiders is to filter out the noise from outsiders without filtering out the signal.

4. You filter out signal when you hold as sacred hypotheses beliefs that really should be questioned. As the movie points out, the hypothesis that AAA-rated securities are safe was sacred. The hypothesis that house prices never go down in more than a few locations at the same time was sacred. The hypothesis that new risk management techniques made old-fashioned mortgage underwriting standards obsolete was sacred.

5. People with outsider personalities are less likely to fall into the trap of holding hypotheses as sacred. If you don’t need to get along with the insiders, then you question them. You question them when they are right and you question them when they turn out to be wrong.

6. As you know, I think that MIT economics has produced a set of insiders who hold sacred hypotheses. Math equals rigor. AS-AD. Market failure always justifies government intervention. Etc. The Book of Arnold is an attempt to call them out on it.

What Books to Read?

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Diane Coyle asks,

What ten books would you absolutely want a young person to read – whatever their subject – to be well-rounded? The idea is a kind of summer reading list for someone about to go to university – what kind of broad mental hinterland should they have before arriving to start a social science degree?

Pointer from Tyler Cowen.

Of the ten she lists, I have read Hume, Kahneman, Camus, and Jacobs. I have strong impressions (possibly too shallow) of what is in Darwin, de Beauvoir, and Scott. I have no strong impression of the other three.

a. I have compiled these sorts of lists before. I think that perhaps more important than which books you put on the list is your thought process in assembling them.

b. There is nothing magic about the number 10.

c. Some of the books that would be in my list have yet to be written.

My first category might be called war and society.

1. Violence and Social Orders, by North, Weingast and Wallis. A very powerful political economy framework that I think works.

2. The Best and the Brightest, David Halberstam, about the Vietnam War. It is an epic tale of government failure.

3. Alone, William Manchester’s second volume of his biography of Winston Churchill. If Vietnam was the costliest intervention mistake made by a western democracy in the 20th century, then the failure to heed Churchill’s warnings about Adolf Hitler was the costliest non-intervention mistake.

My second category might be called late 20th-century perspectives on 21st century technology and society.

4. The Diamond Age, a work of science fiction by Neal Stephenson, is longer and more confusing than I would like, but it offers a vision of the impact of technology on society that raises many of the important issues, particularly the class divergences that people are talking about today.

5. The Transparent Society, by David Brin. That also was a very farsighted book, about the issues of privacy and security that are being much discussed today. See my review.

6. The Age of Spiritual Machines, by Ray Kurzweil. He later updated and expanded his thinking in The Singularity is Near, but I think that the older version may be more interesting, because of the long list of predictions made in 1999 for 2009 and 2019 that we can now evaluate.

My third category might be called fictional insights into human nature and power over others.

7. One Flew Over the Cuckoo’s Nest, by Ken Kesey. Don’t bother with the movie, even though it was voted Best Picture. For me, the book offers insights into the dynamics among people who feel entitled to power and people who are nervous about freedom.

8. Animal Farm, by George Orwell. Another book on the determination to exercise power.

9. Lord of the Flies, by William Fielding Golding. I see it as a story of reversion to barbarism.

I do not know how to categorize my next pick.

10. The Blank Slate, by Steven Pinker. The book gives you a lot of modern European philosophy and a lot of evolutionary psychology.

My next category might be “dueling asymmetric insights.”

11. Moral Politics, by George Lakoff. Lakoff, a progressive, offers an interesting theory of the appeal of conservatism. Recommended for conservatives so that you can understand how progressives think of you.

12. The Vision of the Anointed, by Thomas Sowell. Sowell, a conservative, offers an interesting theory of the appeal of progressivism. Recommended for progressives so that you can understand how conservatives think of you.

Finally, I have my category of works yet to be written.

13. Readings on The Industrial Revolution. This would include timelines for growth rates, innovations, and trading patterns. It would include excerpts from various theories (Clark, North, McCloskey, etc.) of why the Industrial Revolution emerged at the time and place that it did.

14. Readings on the Great Depression. This would include a chronology of events, and it would include excerpts from various theories of why it started and why it persisted. It would include analyses of the political legacy of the Great Depression

15. A project that I am currently toying with (probability of attempting of about .2), on the challenge of trying to extricate yourself from political tribalism. A bit of Robin Hanson, a bit of the three-axes model, a bit of Martin Gurri. Possibly embedded in a work of fiction.

Thoughts on Social Class

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Scptt Alexander writes,

All those studies that analyze whether some variable or other affects income? They’d all be much more interesting if they analyzed the effect on class instead. For example, there’s a surprisingly low correlation between your parents’ income and your own income, which sounds like it means there’s high social mobility. But I grew up in a Gentry class family; I became a doctor, my brother became a musician, and my cousin got a law degree but eventually decided to work very irregularly and mostly stay home raising her children. I make more money than my brother, and we both make more money than my cousin, but this is not a victory for social mobility and family non-determinism; it’s no coincidence none of us ended up as farmers or factory workers. We all ended up Gentry class, but I chose something closer to the maximize-income part of the Gentry class tradeoff space, my brother chose something closer to the maximize-creativity part, and my cousin chose to raise the next generation. Any studies that interpret our income difference as an outcome difference and tries to analyze what factors gave me a leg up over my relatives (better schools? more breastfeeding as a child?) are stupid and will come up with random noise. We all got approximately the same level of success/opportunity, and those things just happen to be very poorly measured by money. If we could somehow collapse the entirety of tradeoffspace into a single variable, I bet it would have a far greater parent-child correlation than income does. This is part of why I don’t follow the people who take the modest effect of IQ on income as a sign that IQ doesn’t change your opportunities much; maybe everyone in my family has similar IQs but wildly different income levels, and there’s your merely modest IQ/income relationship right there. I think some studies (especially in Britain) have tried analyzing class and gotten some gains over analyzing income, but I don’t know much about this.

My thoughts:

1. I agree that income is a noisy measure of something that is more fundamental and more highly heritable. I take Gregory Clark’s The Son Also Rises as strong evidence for that. Re-read my review.

Clark and his researchers looked at multi-generational outcomes on a variety of measures in several countries. They concluded that under many different institutional arrangements and across many time periods, the true correlation across generations in social status is somewhere between .7 and.8, which is much higher than most conventional estimates. In short, persistence of social class is much higher than most researchers believe it to be, based on single-generation correlations that are biased downward by measurement error.

2. Alexander describes a number of impressionistic descriptions of social class. I prefer the data-based approach used by sociologists and market researchers. See, for example, The Clustering of America, which uses cluster analysis.

3. People are much more tightly grouped around social class than around income or political beliefs. That is why so many of us feel totally isolated from the Trump phenomenon. Remember Charles Murray’s bubble test?

4. Speaking of Trump, Alexander writes,

Donald Trump appeals to a lot of people because despite his immense wealth he practically glows with signs of being Labor class. This isn’t surprising; his grandfather was a barber and his father clawed his way up to the top by getting his hands dirty. He himself went to a medium-tier college and is probably closer in spirit to the small-business owners of the upper Labor class than to the Stanford MBA-holding executives of the Elite. Trump loves and participates in professional wrestling and reality television; those definitely aren’t Gentry or Elites pastimes! When liberals shake their heads wondering why Joe Sixpack feels like Trump is a kindred soul even though Trump’s been a billionaire his whole life, they’re falling into the liberal habit of sorting people by wealth instead of by class. To Joe Sixpack, Trump is “local boy made good”.

I find that insightful.

Garett Jones Watch

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Review by Scott Alexander. Review by Stuart Ritchie. Interview with Jones.

Alexander makes the point that I tried to make, which is that aggregation can produce higher correlation in noisy data. Ritchie says because the correlation between self-control and IQ is only 0.4, it is a bit of a swindle to say that self-control is a big factor explaining why nations with high average IQ do well economically. Among other interesting things in the interview, Jones says

Years of education is terrible measure of human capital. Look at broad-based test scores to get a sense of where a country’s economic future is heading.

Kling on Matt Ridley

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My review of The Evolution of Everything is here. I end my review with a series of questions.

If ideas emerge from the “adjacent possible,” how is it that some rare individuals thousands of years ago were able to anticipate ideas that only began to penetrate our culture in the late 18th century, when Adam Smith published his most important works? And why does the idea of evolution continue to face so much resistance today? As Ridley points out, on the one hand there are many religious conservatives and others who insist that biology comes from design, not from evolution. And there are many on the left who insist that economic well-being comes from government planning, not from markets. Are those of us who see decentralized evolution as superior to central planning forever doomed to be in the minority? Or is it possible to envision evolutionary progress on that front as well?

The Quotable Roger Scruton

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In Frauds, Fools, and Firebrands, he writes about those who condemn the commoditification of labor,

are we not tired, by now, of this tautologous condemnation of the free economy, which defines that which can be purchased as a thing and then says that the man who sells his labour, in becoming a thing, ceases to be a person? At any rate, we should recognize that, of all the mendacious defences offered for slavery, this is by far the most pernicious. For what is unpurchased labour, if not the labour of a slave?

1. I am reminded of Milton Friedman’s famous retort to a general defending the draft. The general asks, “Would you want to lead an army of mercenaries? Friedman replies, “Would you rather lead an army of slaves?

2. I am reminded of the widespread requirement of high school students to complete hours of “community service” in order to graduate.

Scruton says to the left: Condemn paid labor all you like. It is more voluntary than the alternative.

Separately, on the philosophy of science, Scruton writes,

Philosophers of science are familiar with the thesis of Quine and Duhem, that any theory, suitably revised, can be made consistent with any data, and any data rejected in the interest of theory.

That is certainly my view of macroeconomic theory.

Russel Arben Fox on Jacob Levy

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He writes,

It introduces, in clear and compelling language, a new way of making sense of the development of liberal ideas, by distinguishing between what he labels “rationalist” (consistent, transparent, state-centric) and “pluralist” (variable, private, culture-dependent) responses to the threats to individual freedom which have arisen throughout the history of liberalism.

Pointer from Tyler Cowen. I also recommend this podcast with Levy, Aaron Ross Powell,, and Trevor Burrus.

Should a restaurant owner be allowed not to serve someone based on race? The “rationalist” theory of liberalism says “no.” The pluralist theory of liberalism says “yes.” An often forgotten aspect of Milton Friedman’s Capitalism and Freedom is that he took the pluralist side on this issue.

Before you jump to the pluralist side of this debate, consider what Fox calls

the rational reformer who wishes to get rid of inconsistent trade barriers and idiosyncratic excise and sin taxes, all in the name of maximizing the benefits of creative destruction

Think of the Commerce Clause as being on the rationalizing side.