What I’m reading

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Range, by David Epstein. You can listen to a Russ Roberts podcast with him here. The book argues for the virtues of cultivating talents in multiple areas.

I find the main argument convincing. One of my rules for financial life is

When you have little left to learn on your job, it is time to move on.

2. But I don’t buy everything in the book. He has a chapter on problems that stumped specialized experts but were solved by outsiders. OK, but what makes those stories fun is that more often the reverse is true. Specialized experts solve problems that would stump outsiders. Don’t get carried way with this outsider problem-solving stuff.

3. He points to research suggesting that teachers improve when they change schools. Of course, any research that claims to measure teacher effectiveness and show significant differences is suspect. The Null Hypothesis does not concede defeat so easily.

4. But I can readily imagine that changing organizations would improve anyone’s performance. Your supervisors and colleagues provide you with cultural learning. When you go to a new organization, you get exposure to another set of cultural practices, and you can pick the best from both. Unless you are rigidly attached to the first organization’s approach, or the second organization doesn’t let you port over any good ideas from your first organization, you should get better.

5. Look at the guests that Tyler Cowen interviews for his conversations with Tyler. They are almost always generalists. A top-tier economist (or top-tier anything) with little or no experience or interests outside of his or her specialty would be really dull to interview.

6. One can argue that you need multiple cultural influences to be an interesting person and, in the modern world, to be an effective person. The small-town resident who has never traveled more than 50 miles, the professor who has never functioned outside of academia, the professional who has never had an adult friend or colleague who lacked a college degree–all of these people are stunted in their cultural growth.

Culture = institutions + folkways

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My recent essay:

I suggest that we should stop trying to talk about culture and institutions as if they were separate. Instead, I propose that we think of culture as having two components: informal culture, which we can call folkways; and formal culture, which we can call institutions. In this framework, institutions are subsumed under culture, as an aspect of culture, a subset of culture, or a manifestation of culture.

f many people walking between two particular places take the same route, their trampling will eventually mark a path. That is a folkway. If the town paves the path with a sidewalk, that is an institution.

What gets expensive and why

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Eric Helland and Alex Tabarrok sort out the various proposed explanations. For example, concerning (lower) education, they write,

no metric of school quality shows any improvement that would appear to justify a cost increase of more than five times. Improvements in quality do not appear to explain increases in cost.

. . . Contrary to the usual story, the number of teachers per 100 students has increased since 1950. . . The number of other staff per 100 students also has increased, but at least since 1980 the increase has, if anything, been at a slower rate than the increase in teachers per student.

The rising cost of labor inputs is the best explanation for the rising cost of education

They focus on the Baumol Effect, about which I wrote

for everything that gets cheaper, something else has to get relatively more expensive. If efficiency shoots up in one sector, then in relative terms it has to decline elsewhere.

The decline of labor’s share

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Germán Gutiérrez and Sophie Pitony write,

non-housing labor shares have remained broadly stable since 1970 for all advanced economies but the US. This is our main result. . . housing explains all of the decline in European total economy labor shares. The US NFC labor share is largely unaffected by housing or self-employment, so it still exhibits a sharp decline particularly after 2000

Owen Zidar and others write,

Private business profit falls by three-quarters after owner retirement or premature death. Classifying three-quarters of private business profit as human capital income, we find that most top earners are working rich: they derive most of their income from human capital, not physical or financial capital. The human capital income of private business owners exceeds top wage income and top public equity income. Growth in private business profit is explained by both rising productivity and a rising share of value added accruing to owners.

Pointers from Tyler Cowen and David Henderson, respectively.

The attempt to divide all income between labor and capital is a fool’s errand. As I put it,

economists still inhabit the world of the 19th century, in which hordes of interchangeable workers in stark factories toil in the service of the owners of capital

Intangible factors matter more and more in today’s economy. You can choose to label the income that is derived from intangible factors “capital income,” in which case the “labor share” of income is declining. Or you can try to “correct” this by justifying labeling some of the intangible income as “labor” income. But what you really should be doing is abandoning the project of trying to view a modern economy through the lens of an aggregate production function f(K,L). It’s a really popular pastime, but it’s a crock.

Scott Alexander on the APA meetings

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He writes,

Were there really more than twice as many sessions on global warming as on obsessive compulsive disorder? Three times as many on immigration as on ADHD? As best I can count, yes. I don’t want to exaggerate this. There was still a lot of really meaty scientific discussion if you sought it out. But overall the balance was pretty striking.

I’m reminded of the idea of woke capital, the weird alliance between very rich businesses and progressive signaling. If you want to model the APA, you could do worse than a giant firehose that takes in pharmaceutical company money at one end, and shoots lectures about social justice out the other.

Higher education has an awful disease, and it has spread in several directions.

What is David Brooks up to?

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John R. Wood, Jr. writes

Tribalism, Brooks argues, is appealing because it helps forge a type of community. But “it is actually the dark twin of community. Community is based on common humanity; tribalism on common foe.” Americans everywhere are seeking relationship. But “weavers” do so by embodying the virtues of empathy, generosity, “radical hospitality,” and “deep mutuality.” In Brooks’s view, a powerful communitarian ethos is swelling across America, challenging the blights of isolation and polarization.

Brooks’ latest book, which touts the joy that one obtains by serving one’s community, is not making much of a splash, as far as I can tell. I think there is a lot of resentment of the fact that he has turned toward preaching after divorcing his wife and subsequently marrying a much younger research assistant. Granted, the second event came too late to have directly caused the first. But Brooks presents his divorce in terms of the suffering he experienced, as if he thinks it helps enhance his credibility as a moral teacher. He comes across as unaware that others might perceive matters differently.

If you actually look at what Brooks is advocating and doing, it has merit. He is suggesting that we get to know our neighbors and also acquaint ourselves with people who are outside of our comfort zone. Invest less in grand politics and more in personal connections. That approach seems to have considerable upside and minimal downside.

But I doubt that any one political culture is “swelling across America.” I think we are splintering. It is no accident that the 2016 Republican Presidential primary and the 2020 Democratic primary produced large numbers of candidates. If we had a proportional-representation electoral system, there would probably be a dozen parties.

V.S. Naipul’s A Million Mutinies Now captured the splintered state of culture in India. I have read a similar book on Israel. Was it Ari Shavit’s My Promised Land, or was it something else? Anyway, I think we see something similar in Europe as well as in the U.S. Instead of the revolt of the public, we are seeing a million revolts.

Claremontism

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Thomas D. Klingenstein writes,

we are engaged in a contest between two understandings of justice, one built on the principle that all human beings are equal—the other on the principle that all “marginalized” identity groups are equal, and all are oppressed by white males.

This is from the Claremont Review of Books, and it may be behind a subscription wall. I am out of alignment with the Claremont folks, but this publication is still very fulfilling.

They are solidly behind President Trump. As Klingenstein puts it,

Nourished in our colleges and universities, multiculturalism is an insane exercise in self-flagellation. It sees America’s past as a series of crimes against humanity: genocide, racism, and all its co-morbidities. Multiculturalism’s worldview is enforced by a ruthless speech code (political correctness) which makes it virtually impossible for anyone in the mainstream of American life to challenge it. Trump, however, is the exception. He has shown that it is possible to stand up to multiculturalism.

My own thoughts.

1. I agree that the leftist intellectual outlook on elite campuses is poisonous. The poison then spreads to less-elite campuses, to schools of education, and to schools of journalism.

2. I disagree that the antidote is Donald Trump.

3. Think of the problem this way: Harvard and the New York Times are infected with bad ideas, such as hostility to capitalism. These bad ideas then spread. Our challenge is to ensure that better ideas have a chance to reach young people.

4. One approach is Samizdat. Soviet dissidents, excluded from mainstream media under Communism, resorted to secret copying to in order to disseminate their ideas. The IDW is our Samizdat.

5. A second approach is internal reform. Jonathan Haidt’s Heterodox Academy is an example.

6. A third approach is to try to disrupt higher education. Somehow make it possible for people to bypass the indoctrination centers and still have the same life opportunities.

Why does the Google News algorithm lean left?

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Nicholas Diakopoulos writes,

Our data shows that 62.4 percent of article impressions were from sources rated by that research as left-leaning, whereas 11.3 percent were from sources rated as right-leaning. 26.3 percent of impressions were from news sources that didn’t have ratings. But even if that last set of unknown impressions happened to be right-leaning, the trend would still be clear: A higher proportion of left-leaning sources appear in Top Stories [on Google].

This reinforces my own impression. But I don’t think that the Google News algorithm is constructed in a sinister way. Suppose that the algorithm is designed to put at the top the stories that users are most likely to click on. To the extent that Google’s users tend to prefer left-leaning news sources, this will lead the algorithm to highlight those sources.

Moreover, the news outlets themselves are driven to appeal to a progressive audience. Progressives want the WaPo to give them news with a slant that makes Trump’s impeachment seem imminent, an the WaPo obliges.

In short, I suspect that the reason Google News promotes so much left-leaning outrage porn is that a lot of people want it.

Feser on Hayek

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Edward Feser (Claremont Review, paywall) argues that Hayek has been widely misinterpreted. Feser says that Hayek thought that only comprehensive socialist central planning was the road to serfdom.

the planner has to dictate, rather than learn, what individual economic actors need and how they will behave. For the only sure way to know what they want and what they will do is to decide for them what they should want and what they should do. And the more closely the economic planner wants outcomes to conform to his plan, the more thorough this dictatorial control will have to be. This is the sense in which Hayek thought socialism entails “serfdom.” He was saying that centrally planning large-scale economic outcomes requires large-scale control of economic behavior. Planners will have to increase control, if they are intent on realizing the plan.

But of course, they could instead just give up large-scale central planning. That is exactly what happened in Western regulatory welfare states. They never ended up becoming dictatorships, precisely because they pulled back from going whole hog for socialism. Hayek was hardly surprised by this. On the contrary, it was exactly what he was trying to convince them to do. He wouldn’t have wasted time writing The Road to Serfdom if he thought the economic regulation that already existed made socialist dictatorship inevitable. Nor was he opposed in the first place to all regulatory and welfare measures. For example, in The Road to Serfdom itself he explicitly allows for regulations to ensure safe working conditions, and for a safety net for those unable to provide adequate food, shelter, and health care for themselves. The Hayek who thought that the smallest tax increase is but the first step toward the Gulag exists only in the imaginations of uncharitable critics and simpleminded admirers.

TLP watch

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Cass Sunstein writes,

We live in an era in which groups of people—on the Left, on the Right, in university departments, in religious institutions—often end up in a pitch of rage, seeing fellow members of the human species not as wrong but as enemies. Such groups may even embark on something like George Orwell’s Two Minutes Hate. When that happens, or when people go to extremes, there are many explanations. But group polarization unifies seemingly diverse phenomena. Extremism and mobbing are not so mysterious. On the contrary, they are predicable products of social interactions.

The essay goes into some of the social psychology involved. As my thinking evolves, I am putting more emphasis on what the three-axes model says about political psychology and less emphasis on what it says about ideology per se.