Category Archives: books and book reviews

Information and Order

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Hundreds of conservative economists have followed Friedrich Hayek into the intellectual swamp of “spontaneous order” and self-organization…

Predictability and order are not spontaneous and cannot be left to the invisible hand. It takes a low-entropy carrier (no surprises) to bear high-entropy information (full of surprisal). In capitalism, the predictable carriers are the rule of law, the maintenance of order, the defense of property rights, the reliability and restraint of regulation, the transparency of accounts, the stability of money, the discipline and futurity of family life, and a level of taxation commensurate with a modest and predictable role of government.

That is George Gilder, in his new book Knowledge and Power. Here is one review. My advice is to be skeptical toward anyone who would either laud the book uncritically or dismiss it categorically.

I was not very far into it before I determined that it is self-recommending in several senses of the word. I saw so much that pertains to my world view that I looked myself up in the index. I found, among several entries, this:

the source of the title for my book was Arnold Kling, Unchecked and Unbalanced: How the Discrepancy Between Knowledge and Power Caused the Financial Crisis and Threatens Democracy…which begins; “This book represents an attempt to explore the problem of the discrepancy between the trends in two phenomena: knowledge is becoming more diffuse, while political power is becoming more concentrated.” My book shows that Kling’s insight finds deep roots in the information theory that underlies the modern world economy.

Generally speaking, the thinkers Gilder attacks are more renowned than those, like me, he spares. Several of the attacks are caricatures (his misrepresentation of Burton Malkiel is particularly glaring). He devotes nearly an entire chapter to an attack on “Tyler Cowan,” and I leave it to Tyler Cowen to determine whether his ideas are as misconstrued as his name.

I will compose a longer review, emphasizing what I find valuable about the book, later.

Deirdre McCloskey Spoke

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at this event. Here are my reactions to a few things.

1. She suggested that we should replace the term “capitalism” with “market-tested innovation and supply.” I like the term market-tested innovation. I can understand why she wants to add “and supply,” but that phrase may not in fact help so much. But innovation contrasts nicely with stasis or suppression of innovation. And market-tested contrasts nicely with government as an institution.

2. She suggested that starting in about 1848, four bad ideas grew: nationalism, socialism, imperialism, and eugenics. Obviously, this is a neat way to explain the disasters of the first half of the 20th century. But what (if anything) is holding us back today? After all, nationalism, imperialism, and eugenics are all unpopular with elites, and socialism has a lot of baggage with it. Are we beset by new bad ideas? If so, what are they?

3. Her story for the Industrial Revolution is that England became exceptional by bestowing dignity on all men, most notably merchants. She used the example of the word “honest.” In the 16th century, this was a term that might be applied only to someone of an elite class, such as an aristocrat or warrior. It meant someone who lived up to the expectations of that class. By the late 18th century, anyone could be described as “honest.” It meant, as it does today, someone who keeps their commitments and whose word can be trusted.

I have just finished America 3.0, by James Bennett and Michael Lotus. Their view is that Anglo-Saxon exceptionalism goes back 1000 years, and that it consists of the elevation of the nuclear family structure. This might explain why the Industrial Revolution took place where it did. It does not explain the timing.

McCloskey would explain the timing in terms of the English adopting a more small-d democratic outlook. I guess I will have to read more of her work to get the story of how and why this adoption took place.

4. An issue that came up is why it is that so few economists take the view that ideas matter in explaining differences in living standards. Cultures that encourage innovation do well, and other cultures do not. Instead, economists have an easier time focusing on endowments, meaning available resources, which turn out to explain very little. The next fallback for economists is institutions, which McCloskey thinks are over-rated as explanatory variables. She said that trying to pour better institutions into bad economies is as futile as trying to pour in dams and other capital projects.

This is, of course, a very lively debate. The institutionalists will focus on poster-child comparisons, like North Korea vs. South Korea, or Hong Kong and Singapore vs. other Asian countries. Those who belittle institutions will point to the failed attempt to “nation-build” Iraq. Don’t look for this to be settled any time soon.

In any event, I think it is fair to say that economists are caught up in the project to do social science, meaning looking at material and quantifiable factors as explanatory variables. Also, I am starting to think that there are positive feedback loops between certain professions and politicians. In journalism and economics, the selection pressures may work against those of us whose ideas lead to skepticismm toward political power.

At another event, Art Carden introduced her.

We Need 250 States

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Have you heard about the folks who want to create North Colorado? The reader who sent me the link suggested that it was time to plug my essay We Need 250 states. There, I wrote,

In 1790, the largest state in the union, Virginia, had a population of under 700,000. Today, Montgomery County has a population of over 900,000. Our nine-member County Council answers to about the same number of registered voters as the entire House of Representatives of the United States at the time of the founding of the Republic.

We cannot have an accountable democracy with such large political units. We need to break the political entities in the United States down to a manageable size.

I have just started reading America 3.0, by James Bennett and Michael Lotus. One of the early chapters offers a utopian scenario for America in 2040 in which there are 71 states. In that scenario, people have sorted themselves in part by political preferences. That would not work for someone like me, who lives in a blue state but who does not want to move. I think we need the option of virtual citizenry. Imagine I paid user fees in Maryland for specific services here, but for most tax and policy purposes I lived in a virtual state with other libertarian-minded folks.

Yet another idea for an Education Start-up

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So, I tried to read my free review copy of The UnStoppables, by Bill Schley. I hate his writing style, but I think that on substance the book, which is a guide/pep-talk for entrepreneurs, is actually good. In talking about how to come up with a business idea, Schley suggests asking yourself these questions (p. 22):

1. I wish I could, so why can’t I?

2. What if?

3. How come no one ever fixed that?

4. Why does this have to be such a pain?

For a long time, I have wished that I could better navigate the world of online learning. What if there were a guide for online learning that students could use to find the best resources and that educators could use to benchmark the competition and share resources? There are lots of great learning videos online, but there is a lot of garbage, and it’s not easy to get straight to the best. How come no one ever fixed that? As a teacher, I find it very difficult to share learning resources with other teachers–using some of their videos, adopting some of their online quizzes, etc. Why does this have to be such a pain?

On my recent vacation, I saw how Rick Steves and tripadvisor.com have gone a long way toward solving these problems for travel. So my latest idea for an education start-up is something like a Rick Steves or tripadvisor.com for online learning resources.

The Rick Steves model ensures consistency of how evaluation takes place, and it gives you the voice of a dedicated, opinionated consumer. The tripadvisor.com model uses crowd-sourcing, so you get less consistency of methodology but broader, timelier coverage.

Let’s assume the Rick Steves model, and take first-year statistics as the prototype. If you were Rick, you would list the topics that you think generally belong in such a course. Then go through all the online materials available from Khan, Kling, Udacity, Coursera, Carnegie-Mellon, etc., and create a model itinerary for students. If one of these brands just dominates in every topic within first-year statistics, then recommend that brand. Otherwise, for each topic, list the top three explanatory videos, the top three sets of interactive exercises, etc.

It is important to remember that your perspective is that of a typical student, not that of someone with an advanced background in statistics. Your advanced background may lead you to over-rate deep, brilliant lecturers (like Udacity’s Thrun) and under-rate folks like Khan who keep it simple and glide past issues that someone pursuing a Ph.D in stats would want to treat more carefully.

Two factors would make the online learning space harder to profit from than the travel space. First, the online learning world changes more rapidly. It takes a couple of years to put up a new hotel. It takes much less time to put up a new lecture or quiz on the central limit theorem. So you couldn’t sell printed books easily, since they would be out of date before they are published. Even with a web site, a lot of the work you do in 2013 will have to be tossed out or re-done in 2014.

The second factor is that it would be harder to generate revenue from advertising. Travel web sites are complementary to the existing bricks-and-mortar folks (hotels, restaurants, rental car companies), who get the concept of advertising. Bricks-and-mortar educators, on the other hand, view the online world as a competitive threat rather than as a pure complementary good. It’s not clear that a for-profit university or textbook publisher would see any point in advertising on the sort of site that I have in mind.

Alberto Mingardi’s Reading List

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Compiled in 2002, it is here, and I am sorry to say that I have (so far) read none of these works.

Pointer from Amy Willis.

Mingardi writes,

Carl Schmitt’s Concept of the Political (University of Chicago Press, 1996, reprint) regarded by Leo Strauss as “an inquiry into the ‘order of human things,'” is fundamental. Schmitt conceptualizes the “political” in terms of a primordial and definitive antithesis between “friend” and “enemy” (“foe”). The very existence of the state rests on this dichotomy. This means that, far more than being a third, “impartial” actor, the state is always the expression of a particular group of individuals. Schmitt teaches that no political order can be conceived as universal, but always and only as a form that originates from a concrete partiality. Against the manipulated justification of government by law, Schmitt’s realism demonstrates how, in reality, there are no abstract institutions, but only clusters of men counterposed as “friends” and “enemies.”

This is what my father (no libertarian) always tried to impress upon me. Politics is about conflict. The “public good” is a woolly concept. So, for that matter is “the state.” Many of the other books on Mingardi’s list appear to treat “the state” as if it were a single individual, rather than an arena through which various individuals and groups engage in conflict.

My Latest Review Essay

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About The End of Power by Moises Naim, I write.

Naim combines strong conceptual thinking with an ability to summon impressive statistical evidence. His book is particularly valuable in showing the importance of growth and change happening in the emerging economies of the world. If those of us who lean libertarian differ from Naim’s conclusions, we should still be aware that his views are much closer than ours to those of most of the world’s elite.

It might be interesting to compare and contrast his book with my book on the knowledge-power discrepancy.

My ebook reviewed in the WSJ

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By Barton Swaim.

One reason American political culture has become polarized and uncivil, Mr. Kling believes, is that each side puts its contentions almost exclusively in terms of its favored language, and fails to see that contrary opinions are manifestations of a different language rather than evidence of stupidity or duplicity.

I notice that The Three Languages of Politics also has ten favorable reader reviews.

Moises Naim Watch

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Mark Manson writes,

One of my best friends recently told me that the prestigious multinational corporation he worked for was itching to permanently send him to India. They wanted him to manage their expansion into that market. And, obviously, India is a huge emerging market. They gave him the Godfather offer to go — enough money to live in a mansion, with personal chefs, private drivers, everything. The irony, of course, was that my friend is a first generation Indian-American. His parents gave up everything decades ago and fought their way to the US to give their kids opportunities they would never have had back in India. They succeeded. What they didn’t expect was that that opportunity for their son they gave up everything for? It was back in India.

One of my big take-aways from Naim’s The End of Power is that emerging economies have a lot going for them. If the future belongs to auto-didacts, it also belongs to people who are comfortable living in more than one country.

What I’m Reading

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New books by Kevin Williamson and by Tim Kane and Glenn Hubbard. Both take as their premise the thesis that the U.S. is on an unsustainable fiscal course. In The End Is Near and It’s Going to be Awesome, Williamson treats this as an opportunity, while in Balance, Kane and Hubbard treat it as a threat. Perhaps it would be appropriate at some point to jointly review them at length.

If I might boil the Kane-Hubbard book down to one sentence, it would be that without a balanced budget amendment to avert fiscal collapse, America will lose its great power status. I can imagine conservatives, thinking in terms of the civilization-barbarism axis, nodding firmly in agreement. However, by the same token, I can picture progressives and libertarians shrugging with indifference.

Williamson appears to be in the latter category. So far (I am less than 1/3rd finished), the book is assembling a standard array of libertarian arguments. Anyone who already resonates to the freedom-coercion axis is bound to like it. My guess is that Williamson is headed toward an embrace of what I have called civil societarianism. So far, it looks as though he is arguing for views that I share, although he expresses them with greater certitude.

From Permanent Press to Permanent Clean

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Walter Russell Mead writes,

A Kickstarter success story making the rounds of the Internet this week caused us to perk up our ears here at Via Meadia. A Brooklyn-based company called Wool & Prince has developed a dress shirt that doesn’t require ironing and can be worn for extended periods of time without it starting to stink.

Pointer from Nick Schulz, who reminds me that in our book we talked about the progress represented by permanent press and speculated that in the future we might see permanent clean.