Category Archives: books and book reviews

A Voice of Social Conservatives

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I review Robert P. George’s Conscience and Its Enemies. My conclusion:

I think that libertarians will find George’s book to be well-reasoned. He usually anticipates the sorts of arguments and concerns that libertarians would raise about his positions as a social conservative. On the whole I think that libertarians will continue to disagree with his views on some of the central issues. However, his book has made me aware that the more aggressive moves by the Left in the culture war are putting liberty of conscience at risk.

The Toady Class On Average is Over

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Random notes from a discussion of Tyler Cowen’s Average is Over:

Michael Mandel is optimistic. He thinks that the baby boomers are about to retire in droves (in part because of health reasons), helping to solve the unemployment problem of the young. Tyler, Robin Hanson, Megan McArdle, and I are unpersuaded.

Tyler pictures an economy evolving over the next twenty years to one with a slice of high earners (the 20 percent or so whose skills complement the ever-expanding power of computers) and then a large group that lives comfortably but without a financial cushion to protect against adverse shocks to health or other major risks.

Matt Yglesias wonders how, in a world that requires technical skill and social skills, those of us in the room have survived. It seems that most work for think tanks, newspapers, and other non-profits. Tyler replies that our presence in the room is indicative of marketing skills. Each of us has proven adept at marketing, with wealthy donors as our consumers in most cases. Steve Teles points out that as society’s rich accumulate wealth beyond what they can consume, their philanthropic ideas will, for better or worse, allocate society’s resources. Afterward, it occurs to me that this suggests that there will emerge a toady class, meaning people whose work in one way or another flatters the wealthy.

James Manzi points out that many people work in fields where output is hard to evaluate, such as education and health care, and I would add that entry to these fields is restricted by credentials. Tyler thinks that as we gather more data we will overcome our inability to evaluate performance sooner than people expect. If that is correct, then the credentials cartel would seem to be destined to fall. I believe that a lot of the thesis of his book stands or falls on whether such data-driven evaluation systems pan out. He would agree that we are far away right now, but he would argue that progress is fast.

What most concerns the discussants, including McArdle, William Galston, Jonathan Rauch, and Brink Lindsey, are the social implications of losing the middle class. (Hanson comments on this focus.) Tyler insists that societies will not fracture, nor will redistributionist demagogues take power. Factors favoring stability include aging, surveillance technology, the skill of the rich at controlling the political environment, nativism, NIMBYism, and the basic comfort achieved by the lower class. He points out that Britain and Germany are farther along than the U.S. in the growth of the new lower class, and their societies appear to be stable–Merkel just won re-election by a wide margin.

Tyler says that in the long run mood-altering drugs may be a solution. Teles suggests that Tyler’s next book will be The Great Medication.

Civilization vs. Barbarism Watch

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A reader points me to a story in Wired.

The prevalence of gun crimes in Chicago is due in large part to a fragmentation of the gangs on its streets: There are now an estimated 70,000 members in the city, spread out among a mind-boggling 850 cliques, with many of these groupings formed around a couple of street corners or a specific school or park. Young people in these areas are like young people everywhere, using technology to coordinate with their friends and chronicle their every move. But in neighborhoods where shootings are common, the use of online tools has turned hazardous, as gang violence is now openly advertised and instigated online.

My guess is that this sort of story will freak out conservatives. But my guess, and this is somewhat supported by anecdotes in the story, is that social media will not turn out to be a long-run boon to the forces of barbarism.

Note that much of the description of gang behavior favors Mark Weiner, not Michael Huemer.

Average is Over

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That is Tyler Cowen’s latest book, which I just finished. I will probably re-read parts of it and have more to say, but for now:

1. Tyler sees the tech sector as dynamic, while the education and health sectors have been stagnant, in part because of government control. In some sense, the difference between The Great Stagnation and his new book is that the former emphasizes the sectors that are doing poorly and the latter emphasizes the tech sector.

2. In part because of this shift in emphasis, this book came closer to reflecting my own views.

3. Tyler uses an arresting metaphor of a billionaire riding in a taxi in Calcutta, surrounded by beggars seeking his attention. One can imagine rich people being able to afford a lot of personal servants. The constraint on that will just be the time and effort needed to manage personal servants.

3. Tyler uses Freestyle chess (humans working with computer programs to compete) as a metaphor. There, I thought he stretched it a bit too much. He envisions a sort of Freestyle economics emerging. But to me there is a big difference between chess and economics in terms of what James Manzi calls causal density. In chess, there are a finite number (in fact, probably a small number) of important factors. Sorting through tens of thousands of games, a computer program can arrive at precise weights for those factors. To us, it is dazzling to see an early bishop sacrifice that a human would consider speculative, but the computer knows, based on “experience,” that this is the sort of position in which one can do without a black bishop.

But in economics, we are dealing with high causal density. This is particularly true in finance and macro. I am not convinced that sheer data analysis is going to produce dazzling results. Sure, a new data-crunching paper may add more value at the margin than a new JET paper, but that is not saying much.

4. For me, the most interesting chapter was the one on education. Tyler points out that the content-supplying and testing/grading functions of a professor can be automated relatively easily. The main role for humans is to supply motivation, coaching, and inspiration. I am reminded of an experiment in India in which grandmothers with no subject-matter knowledge are recruited to encourage young children to learn by praising their work.

America 3.0

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James C. Bennett and Michael J. Lotus write,

As the 2.0 state fails, we are seeing increasing awareness, urgency, and activism in response to a deepening crisis. The emerging America 3.0 will reverse several key characteristics of the 2.0 state: decentralization versus centralization; diversity and voluntarism rather than compulsion and uniformity; emergent solutions from markets and voluntary networks rather than top-down, elite-driven commands. Strong opposition to the rise of America 3.0 is inevitable, including heavy-handed, abusive, and authoritarian attempts to prop up the existing order. But this “doubling down” approach is doomed. It is incompatible with both the emerging technology and the underlying cultural framework that will predominate in America 3.0.

That is from an essay that extracts from their book. I also have a review of their book. I write,

Bennett and Lotus argue that reformed government in America 3.0 would be strong but localized. They believe that the most unworkable aspect of the American welfare state is its scale, covering a population of three hundred million.

Marriage and Child-Bearing Trends

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On this post, Kay Hymowitz left a comment.

Women today marry on average at 27; in 1950 it was closer to 20. Eighty percent of women marry at some point. Though that’s down from 90% in the mid century,it’s still the large majority. The big story is that though the age of marriage has gone up markedly, the age of first birth has not. I co-authored a report on the “crossover” between marriage and birth ages; you can find it here: http://nationalmarriageproject.org/wp-content/uploads/2013/03/KnotYet-FinalForWeb.pdf

In his book, Nick Schulz writes,

in 1960 almost 70 percent of adults ages 20 to 29 were married, while in the late 200s about one quarter were hitched.

He quotes James Heckman as saying that parenting matters for early childhood motivation to learn, which in turn affects longer-term outcomes. Thus, he is not on the same side as Bryan Caplan and Judith Rich Harris, who see nature mattering much more than nurture.

Nick tells an anecdote about asking manufacturing executives what was missing in the skill set of the labor pool.

“To be honest,” said one executive, rather sheepishly, “we have a hard time finding people who can simply pass a drug test.

Nick ends up advocating for building support for marriage and disdain for unwedded pregnancy.

when the baleful effects of certain cultural norms, actions, and behaviors become overwhelmingly evident for all to see, societies are able to shape their cultures in a healthier direction…the recognition of the harms of smoking. Something similar seems to be happening with recognition of the harms of obesity.

I wish Nick had gone into more depth about why women are having children before marriage. I have the sense that without knowing what their thought processes are, it is hard to know what to recommend.

Loosening the Monetary Dial

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Hasan Comert’s Central Banks and Financial Markets is strong reinforcement for my tendency to be skeptical of the effectiveness of monetary policy. What Comert says is that the evolution of the financial system has tended to decouple monetary aggregates from bank reserves and long-term interest rates from the Fed Funds rate. For example, consider sweep accounts. On p. 33, Comert writes,

Depository institutions developed computer programs to analyze customers’ checkable accounts, which are subject to reserve ratios, and automatically sweep them into savings deposits which were not subject to required reserve ratios.

On p. 47, Comert presents a striking chart showing that the ratio of required reserves to total deposits at depository institutions has declined from about 3.25 percent in 1959 to about 0.25 percent in 2007. At this point, it is perhaps a misnomer to call these “required” reserves. Instead, today there is essentially no connection between the level of reserves that the Fed supplies and the size of the financial sector.

Another way to see the decline in the influence in monetary policy is to track the correlation between the Fed Funds rate and mortgage rates. On p. 145, Comert writes,

the correlation between a one-year mortgage rate and the Fed rate was about 0.700 in the 1990s. It delined to about 0.250 in the period from 2002q1 and 2007q3. On the other hand, whereas the correlations between the 30-year fixed mortgage rate and the Fed rate was about 0.500 in the first period, it is 0.172 for the levels and 0.063 but insignificant for the differences in the second period.

I do not say that the Fed’s monetary dials are completely disconnected. I think that if they were really determined to cause rampant inflation, they could do so. But I do not think that their dials allow for fine tuning. I am not sure that if they were really determined to get an inflation rate of 4 percent, as opposed to 1 percent or 10 percent, that they could do that.