Category Archives: books and book reviews

Isabel Sawhill’s New Book

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Generation Unbound. I am reading it–may have finished by the time this is posted. In short, her thesis is that many twenty-somethings are having unplanned children out of wedlock, with detrimental consequences, particularly for the children.

Possibly related: This chart from Frances Woolley, showing Canadians’ intentions to have children, sorted by gender and age. What stands out is that among 15-24 year-olds, females are much keener on children than males.

Certainly related: Ben Casselman on a recent Pew survey of marriage patterns. Pointer from Jason Collins.

Robert Litan’s New Book

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It is called Trillion Dollar Economists. The concept is to show how useful the ideas of economists have been in business, finance, and public policy. For example, auctions have been used in business (Google’s ad words, e-Bay’s classified ads), price discrimination is very important in the real world (I like to tell students that “price discrimination explains everything”), option pricing is important, etc.

I like the concept, and I like much of the material. Litan’s taste in economics–what he considers to be valid and useful–is much closer to mine than that of just about anyone else who might attempt a similar project. However, this is one of those books that I wish had been structured differently. I will put my extended remarks below the fold. Continue reading →

My Review of Peter Thiel

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I write,

the business environment of biotechnology, which Thiel and I agree is a very promising field for future economic growth, may be different from that of software. In software, companies like Microsoft and Facebook grew to dominance in large part because consumers find an advantage in using the same software as other consumers — this is the network effect. This in turn creates an opportunity for venture capitalists to back the rapid expansion of a firm that is unprofitable for a few years and then wildly profitable a few years later, once the network effect has been captured. It is not necessarily the case that biotechnology will exhibit network effects in which profits are created by rapidly expanding on an early lead.

I should note that Edmund Phelps, in Mass Flourishing, argues that progress is driven not by big individual breakthroughs but instead by cumulative entrepreneurial progress.

UPDATE: Peter Lawler also writes about Thiel. A sample:

What, today, would be “the largest endeavor over which you can have definite mastery”? This would be the startup. For the libertarian Thiel, the startup has replaced the country as the object of the highest human ambition. And that’s the foundation of the future that comes from being ruled by the intelligent designers who are Silicon Valley founders.

Sentences that I Might Have Written, Continued

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Then there are those whom Sunstein refers to as “we.” We know this, we know that, and we know better about the way ordinary people make their choices. We are the law professors and the behavioral economists who (a) understand human choosing and its foibles much better than members of the first group and (b) are in a position to design and manipulate the architecture of the choices that face ordinary folk. In other words, the members of this second group are endowed with a happy combination of power and expertise.

That is Jeremy Waldron, and I recommend the entire essay.

Jason Collins Reviews Scarcity

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He writes,

I also doubt that Mullainathan and Shafir’s description of the poor as suffering from scarcity is generally true. When it comes to time, the poor watch more television, invest less time in caring for their children, have plenty of free time to think about what they will eat, and yet are more likely to be obese. Their characterisation of the poor having a lot on their mind whereas the rich are relaxed despite their more complex employment does not seem particularly strong.

Read the whole thing.

Peter Thiel’s Interview Question

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In his new book, Zero to One, he writes,

Whenever I interview someone for a job, I like to ask this question: “What important truth do very few people agree with you on?”

My answer would be that I believe that the Fed has very little influence on inflation and interest rates. I think it is fair to say that very few people agree with me on that.

His rationale for asking the question is that if you cannot be truly contrarian, then you cannot be an innovator.

You should read Thiel along with my own Under the Radar. We are similar in our characterization of the business environment, and yet we are polar opposites in terms of where we favor positioning oneself within it. Also, perhaps read Joel Kotkin on The New Class Conflict (which I have not read) and decide to what extent Thiel exemplifies what Joel Kotkin calls the Tech Oligarchy.

Random Reading of Pseudonymous Authors

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1. A review copy of The Mystery of the Invisible Hand, by “Marshall Jevons.” A didactic novel, better than I expected, but not as good as The Price of Everything. I did finish it. My favorite passage, though, is when the author quotes Carl Christ.

Some people think that economists care only about money. I have heard an unkind critic say that an economist is someone who would sell his grandmother to the highest bidder. This is quite wrong. An economist, or at least a good economist, would not sell his grandmother to the highest bidder unless the highest bid was enough to compensate him for the loss of his grandmother.

2. How Civilizations Die, by David P. Goldman, who writes columns as “Spengler.” Very anti-Islam, very pro-Jewish and pro-Christian, very heavy on the civilization-barbarism axis. Not a book you turn to for even-handedness or diplomacy. One representative sample:

Wherever Muslim countries have invested heavily in secondary and university education, they have wrenched their young people out of the constraints of traditional society without, however, providing them with the skills to succeed in modernity. An entire generation of young Muslims has lost its traditional roots without finding new roots in the modern world. The main consequence of more education appears to be a plunge in fertility rates within a single generation, from the very large families associated with traditional society to the depopulation levels observed in Western Europe. Suspended between the traditional world and modernity, impoverished and humiliated, the mass of educated young Muslims have little to hope for and every reason to be enraged.

I think that recent events will lead people to give more consideration to such darker outlooks. If Presidents Bush and Obama had something in common, it is that they both believed that the process of political modernization among Arab Muslims would prove simpler than it has. Bush was overly optimistic about Iraq, and Obama was overly optimistic about the revolutions in Egypt, Libya, and Syria.

For a different take from the civilization-barbarism axis that is too long to excerpt but interesting, see Forfare Davis.

By the way, my Facebook feed has changed radically in recent months, with much less political snark and a surfeit of cute animal videos. Part of me wonders if something like that happened in Britain when Hitler took power in 1933. Was politics just too unpleasant to contemplate at that point?

What I am Trying To Read

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Casey Mulligan’s Side Effects, about the labor market effects of Obamacare. I suggested the title, after hearing him talk on the subject.

One snippet:

the ACA is still the third largest marginal tax rate hike during the seventy years.

I am finding it a tough slog. Part of it is that the e-book is not my preferred format for absorbing numerical and mathematical analysis. Part of the problem is that health care law is complex, which makes the economic analysis difficult.

Teaching, Batting, Craft, and Science

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Today I happened to have lunch with Russ Roberts, so we discussed his talk with Elizabeth Green. Some notes:

1. I like his analogy between the task of teaching and the task of hitting a baseball. In both cases, there is a limit on what you can learn by studying books or videos. At some point, you have to learn by trial and error. In baseball, a coach can do a lot to make a hitter’s practice more productive. Green, influenced by Doug Lemov and others, argues that a coach can do a lot to help a teacher.

2. This helps to bring out the difference between a science and a craft. You can learn a lot about science, such as chemistry, without trial and error. You can learn a lot through reading and through ordinary instruction in the classroom and in the lab. But you cannot learn much about hitting a baseball that way. Or you cannot absorb much of what you learn. Instead, you learn best by trying to hit and by being coached on how to hit.

3. My experience as a high school teacher have convinced me that these issues of “craft” are important. I think of most pedagogical theory as something that you could apply to writing a textbook or creating a MOOC. But actually getting a classroom to function takes a lot of skills that one can acquire only through practice and by responding to feedback. Green’s point is that American education methods tend to minimize teachers’ opportunities to receive coaching and feedback.

4. Coaching itself is very much a craft. In the case of hitting, how many people really know how to teach hitting really well? And can any of those people convey their knowledge of coaching well to others, so that other people can learn to coach hitting really well? The analogous problem exists in education. If “building a better teacher” is a scalable solution in education, then you need to find people who can teach teacher-coaching in a scalable way, so that there are enough good coaches of teachers to build lots of better teachers. I am skeptical that this is the case.

5. Coaching can improve any hitter. But it cannot make just anybody into a really good hitter. So I am also skeptical that you can make almost anyone into a really good teacher.

6. For me, the hardest things for a teacher include:

–understanding how students get things wrong, so that you can steer them from wrong to right.
–dealing with the trade-off between introducing new concepts and trying to solidify the concepts you taught last week, particularly when you have students who are at different levels of mastery
–trying to engage in cognitive instruction and deal with behavioral issues at the same time
–motivating students to reveal to themselves what they do not know and to work on those deficiencies