Category Archives: Tyler Cowen is my Favorite Blogger

Squelching talent

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Tyler Cowen said

Harvard and MIT are in fact remarkably good at finding, evaluating and attracting top talent. It is stunning how good they are at this, and we should not begrudge them that,” he said.

But what if the top economics graduate schools squelch the talent that they find, shunting it into mediocrity? What if all of these talented folks were instead given a wider perspective on problems and more encouragement to pursue knowledge through means other than mathematical models and stylized statistical analysis?

I ended up following a non-academic path after graduate school. From a status-within-the-profession perspective, this was a loss. From an intellectual growth perspective, it was a win.

What I write does not make it into the American Economic Review. So much the worse for economists who rely on the AER.

Tyler, Marc, and Ben

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That is, Cowen, Andreessen, and Horowitz, in a 40-minute podcast. I chose to annotate it. Annotating is, like writing a book review, a way for me to absorb the material. Some excerpts from my essay:

1. As far as I can tell, blockchain can only help to prevent one type of cheating: digital forgery. If blockchain is going to have a killer app, then it has to enable a transaction to take place where the only impediment to undertaking such a transaction currently is the threat of digital forgery.

I would add that digital money faces the threat of digital forgery. But digital money also faces other impediments. ICYMI, my whole point is that other impediments to trust are, in the grand scheme of things, much more important.

2. New listening technology strikes me as incremental, not revolutionary. Portable radios are a very old technology. I listened to the Beatles sing “When I’m 64” on a transistor radio when I was 13. Now I’m 64.

3. Could AR and VR become a big part of everyone’s life? In my opinion, yes. Have the breakthroughs necessary for that to happen occurred or are they on the verge of occurring? In my opinion, no.

I would add that I do not know what the key breakthroughs will be. In fact, we will only have a better idea in hindsight. Who knew ahead of time that the breakthroughs needed to make mobile Internet access a winning technology had taken place by 2007 but not earlier?

4. I assume that in Israel and China, security issues provide an arena for cultural mixing between government and technology. Presumably, there is also some cultural mixing between Silicon Valley and part of the American military and homeland security apparatus.

Klassic: Masonomics

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In 2007, I wrote,

Masonomics says, “Markets fail. Use markets.”

. . .The argument between Chicago and MIT seems to be over whether perfect markets are a “good approximation” or a “bad approximation” to reality. Masonomics goes along with the MIT view that perfect markets are a bad approximation to reality. But we do not look to government as a “solution” to imperfect markets.

Two years later, I wrote,

Tyler argued that politics is about determining what sorts of groups have high status in a society. I think this can relate to the idea that people are motivated to feel good about themselves and to believe that others think highly of them. Think of political identity as like religious identity or musical identity. Tyler pointed out that it’s pretty easy to predict what music will be on the iPod of an upper middle class sophomore girl at Brown will like certain music, and it is pretty easy to predict the musical tastes of a 25-year-old male gas station mechanic in Grand Rapids, Michigan, and those are quite different. You might not get as high an R-square predicting political affiliations, but you could still do pretty well.

I am thinking that at the margin this blog may be better if I include more posts that point readers to older essays of mine. Hence the Klassic.

Comments on contemporary politics

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1. Tyler Cowen was interviewed by Max Read and David Wallace-Wells a couple of weeks ago. He sees a growth in non-libertarian right-wing politics, both in the U.S. and elsewhere.

That seems correct. I think that the Republicans can do well electorally by throwing libertarians under the bus. The Democrats’ best chance in a national election is to throw coastal progressives under the bus, but I don’t think they will be able to do that.

2. Aaron Zitner and Dante Chinni (WSJ) wrote,

a campaign for Congress in many places starts with 60% of college-educated white women favoring the Democratic nominee. An even larger share of white men without degrees favor the Republican—making both essentially unreachable by the opposing candidate.

…The differences between the two groups are stark on many of the issues dominating the midterm campaign: immigration, gun control and health care. In each case, white men without college degrees support Mr. Trump’s policy stance, while white women with degrees are opposed.

For me, this is the most useful polling analysis that I have seen in a long time. I brought it up with a friend, and she said, “Of course, those two groups despise one another sexually, as well.”

The first story in Curtis Sittenfeld’s latest story collection, You Think it, I’ll Say it, concerns the sexual tension between a professor of gender studies attending a conference and the Trump-supporting driver who takes her from the airport to her hotel.

In movies of an earlier era, there is a theme of tension between a prim, proper, attractive woman and a blue-collar male played by an actor like Marlon Brando, Jack Nicholson, or James Garner. If the movie is a comedy, the man wins the affection of the woman. If it is tragedy, it ends. . .differently.

Books of the year 2018

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1. Uncivil Agreement, by Lilliana Mason. My review. I had many take-aways, including that tribal loyalty sometimes drives political beliefs (it’s not just the other way around), hatred of the opposing party has gone up by more than division on issues, and cross-cutting identities seem to have gone down, and they used to ameliorate polarization.

2. Blueprint, by Robert Plomin. My main take-aways are that variation in human traits is polygenic (dozens of genes, each having small effects) and that we should not think of psychological traits in either-or terms. Thinking about myself, my guess is that if we had a “spectrum” for a tendency toward schizophrenia and bipolarity, then I would be above normal in that direction. I believe that this makes me more creative than people who are normal or below-normal on this dimension. But if I were much further along on this dimension I would be too dysfunctional too often.

3. Bad Blood, by John Carreyrou. The tale of Theranos, the biotech startup that descended into fraud. I’ve recommended this to friends with a money back guarantee. There was no risk to me in doing that–everyone who has read the book is completely satisfied.

4. Minds Make Societies, by Pascal Boyer. He talks about how we have been trained by evolution in coalition management. A sample quote: “stating that someone’s behavior is morally repugnant creates consensus more easily than claiming that the behavior results from incompetence.”

5. Tomorrow 3.0, by Mike Munger. Not as much impact on me as the top two, but a really good example of “thinking like an economist.”

6. A Crisis of Beliefs, by Nicola Gennaioli and Andrei Shleifer. If you are going to write another book about the financial crisis, at least have it be something like this one, which blames incompetence rather than moral repugnance. My review.

Some notable books that didn’t make the list:

Because it is only a revised and updated edition, I deemed as ineligible The Revolt of the Public, by Martin Gurri. Otherwise, it would be at the top of the list.

Suicide of the West, by Jonah Goldberg. My review.

Why Liberalism Failed, by Patrick Dineen. My review.

The Virtue of Nationalism, by Yoram Hazony.

The Coddling of the American Mind, by Greg Lukianoff and Jonathan Haidt.

Click Here to Kill Everybody, by Bruce Schneier.

After writing this post but before it went up, Tyler Cowen posted his list. He has Gurri on it. He also includes Waldrop’s book on Licklider, DARPA, and the Internet. I read a free sample, which convinced me that it is likely the best book on the topic. But I judged, perhaps wrongly, that I already have read too many other works on these events to profit much from reading this one. I made the same judgment about the Andrew Roberts biography of Churchill.

Seeing Taleb’s Skin in the Game on Tyler’s list, it probably belongs on mine, too. Taleb was very disagreeable with me on Twitter for my essay calling him disagreeable, and that may have unconsciously caused me to forget to include his book.

The three GMU books at the top of Tyler’s list also merit inclusion. I read them in previous years, so it didn’t occur to me to include them here. I browsed the books by Mann, Heyes, Reich, and Chater, and I was not motivated to buy them. The other books on Tyler’s list I have not browsed.

Assortative Mating

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Alparslan Tuncay writes,

I look at assortative mating based on the permanent wage, which is constructed by removing age and year components from wage, and using couple rank correlation in the permanent wage as the measure of assortative mating. I then document that assortative mating increased from 0.3 for families formed in the late 1960s (initial cohort) to 0.52 in the late 1980s (final cohort).

Pointer from Tyler Cowen. This is something that many of us have speculated about, but here is some actual documentation. Tuncay also looks into the causes of assortative mating (he points out that marrying later makes it possible to know lifetime wage more reliably) and the consequences (he says that it accounts for 1/3 of the increase in family inequality).

This paper is an example of the road to sociology, but in a good way. First, it relates an economic outcome (inequality) to a sociological phenomenon. Second, it goes counter to the oppressor-oppressed ideology.

Economics, History, and Contingency

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Tyler Cowen writes,

Economists, in contrast, work more with general models than with concrete historical situations, and those models emphasize underlying structural forces. Economies have fairly set populations, birth rates, natural resources, capital stocks, savings rates, trading partners, and so on. So to an economist, the final outcomes are closer to necessary than contingent.

1. Tyler claims that historians are much bigger on contingency. Well, maybe in comparison with economists. But there are plenty of historians who look for underlying structural causes. Ask to explain why the North won the Civil War, and my bet is that a historian will have more to say than just “one darn thing after another.” Closer to the topic of Tyler’s essay, the question of whether a political leader makes his movement or a movement makes its leader is vigorously contested among historians.

2. But Tyler is right to characterize economists as working with deterministic models. I have an essay in the works that argues that this is so much the worse for economists. The short version of the essay is that the real world has characteristics that invalidate the deterministic models, and instead outcomes are much more contingent.

I believe that there is a sense in which economics is history. Economic outcomes are affected not just by the configuration of households and firms but by the path that got us here. Unfortunately the typical economic model operates purely in the present, or even outside of time altogether. The economist acts like a man who comes from Mars and thinks he can predict what firms and households will do tomorrow based on what he can observe today, without having to ask anything about what was going on yesterday.

But the short version cannot do justice to the topic. There’s a reason to spell it out in a essay.

The church vs. the clan

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Jonathann F. Schulz writes,

Church marriage prohibitions pushed Europe away from a kin-based society and paved the way for the development of inclusive institutions. . . this paper highlights the role of kin networks for the formation of commune cities in Europe. This suggests that the seeds of the Great Divergence (Pomeranz, 2000) between Europe and other regions of the world were already planted by the Church’s incest prohibitions in late antiquity. Even today, medieval Church exposure and the absence of strong kin networks are associated with higher civicness and, ultimately, with more inclusive national institutions.

Pointer from Tyler Cowen.

Cousin marriage is still prevalent in parts of the world. There are those, including Schulz, who see this as a source of major cultural differences.

Tyler Cowen and Paul Krugman

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Forget your priors and lower your guard. This is about as good a conversation as you will get among economists. Early in the discussion Tyler suggests that this sort of conversation could be more educational than a conventional economic lecture, and I think that is true. I think if I were teaching from it, I would pause every few minutes to explain to students what is going on, and also perhaps to explain my own point of view where it is not expressed by either of the speakers.

About 28 or 29 minutes in, Krugman makes the point that some really major industries do not conform to textbook economic models, and he raises the question of why we then rely so much on the textbook model. I strongly agree, and in fact I have drafted a long essay about the implications. I wish they would have spent more time on this topic,abut perhaps they exhausted everything they could say.

Would forecasting tournaments reduce polarization?

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Barbara Mellers, PhilipTetlock, and Hal R.Arkes claim that they would.

We explore the power of an emerging methodology, forecasting tournaments, to encourage clashing factions to do something odd: to translate their beliefs into nuanced probability judgments and track accuracy over time and questions. In theory, tournaments advance the goals of “deliberative democracy” by incentivizing people to be flexible belief updaters whose views converge in response to facts, thus depolarizing unnecessarily polarized debates. We examine the hypothesis that, in the process of thinking critically about their beliefs, tournament participants become more moderate in their own political attitudes and those they attribute to the other side.

Pointer from Tyler Cowen.

I have my doubts.

1. People who hold polarized beliefs are not interested in making probability statements. It’s like asking a religious fanatic to give the probability that he is mistaken. It probably would be easy to steer people to rational thinking about politics if politics were about policy. But it’s not.

2. The interesting forecasts are conditional forecasts. As Scott Sumner put it, “(Unconditional) prediction is overrated.”
If there is strict gun control, will that reduce gun violence? We can argue about that, and we can even make empirical arguments, but we cannot run the controlled experiment that allows forecasts to be tested.