Podcasts of the year, 2018

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This year, I probably listened to more podcasts (usually on a computer, often with video) than I have any other year. The podcast browser is a useful recommender. Podcasts emerged as the medium of choice for the Intellectual Dark Web. If you search YouTube for Jordan Peterson, Eric Weinstein, Jonathan Haidt, or Steven Pinker, you can find dozens of hours of material. For the most part, I still believe that the printed word is a superior medium. But sometimes the podcasts rise to a high level, particularly when they are conversations. My top list:

1. Tyler Cowen and Paul Krugman.

2. Ezra Klein and Jonathan Haidt.

3. Russ Roberts and Yoram Hazony.

4. Russ Roberts and Bryan Caplan.

5. Ezra Klein and Lilliana Mason.

6. Russ Roberts and Bill James.

7. Ted Seides and Annie Duke.

8. Sean Illing and Eric Weinstein.

9. Dave Rubin, Bret Weinstein, and Eric Weinstein.

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.

Mike Munger’s latest book

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I have written a review. The book, Tomorrow 3.0, speculates that we could become a society where individuals own few goods and instead rent. I conclude

Up until now, it seems to me that we have managed to become increasingly interdependent without a loss of liberty. That is, we have developed norms and institutions that facilitate interdependence while maintaining our ability to make individual choices freely. Many of the important institutions that provide this governance are in the private sector, and the norms that they develop evolve over time (think of the evolution of payment from cash to checks to credit cards to smart phone apps). Going forward, I would be optimistic that although a society of renters may require more governance and more rules, these will evolve primarily from competition and cooperation among private entities, and we need not see an increase in centralized coercion.

Defense economics

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Question from a reader:

I was wondering if you could comment on the fact that you’ll never see papers or courses in defense economics, but there’s no lack of academic interest in other areas of gov’t involvement such as healthcare, education, agriculture, finance, etc.?

1. It is possible that fifty years ago you would have not made this observation. RAND was a defense contractor, and I believe so were some lesser-known economics outfits. Dorfman, Samuelson and Solow, which was still a major textbook when I was in graduate school, is arguably motivated by military resource allocation problems. And of course Schelling’s Nobel relates to the defense problem posed by nuclear weapons.

2. Then you have the Vietnam War, and from then on anything defense-related has a negative stigma. Still, arguably a lot of work on principal-agent problems in contracting has applications for procurement.

3. In recent years, the most talked-about defense problem is terrorism. There has been a bit of work on economic connections to terrorism, including who becomes a terrorist. But there does not seem to be much for economists to say, apart from noting the obvious discrepancy between the cost of anti-terrorism measures and the actual incidence of terrorism.

4. Research follows money. If the Federal departments that oversee health care, education, and so on are handing out more grants than DOD for economic analysis, then there you are.

5. It may be more difficult to have credibility without domain experience. The fact that Jonathan Gruber and David Cutler are not health insurance executives or doctors did not keep Congress from turning Gruber loose to redesign health insurance or trying to implement Cutler’s ideas for telling doctors how to practice medicine. But on defense, Congress probably would rather defer to a general or an admiral than to an economist.

6. An economist in the field of defense may need to work with classified information to be useful. This could limit opportunities for publication.

7. My guess is that a the career path for a defense-focused economist is less likely to involve an academic position writing papers for the same journals as other economists. Instead, it is more likely to involve employment at a defense contractor or in government. Research is more likely to flow up through a hierarchy than out through economics journals. One’s reputation is more likely to depend on how one is received by bureaucratic superiors than by academic peers.

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.

TLP watch

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1. Art Carden writes,

how do we understand the political rhetoric and division regarding the migrant caravan? I think Kling’s framework provides a very useful way to understand.

Indeed. The applications of oppressor/oppressed, civilization/barbarism, and liberty/coercion are obvious.

Another application of the three-axes model is that news stories that get “excess play” are ones that produce the sharpest divisions along the axes. I mean, considering the short-attention-span news cycle and the caravan story’s intrinsic (lack of) importance, its prominence and staying power is hard to explain, except that it provides outrage fodder for everybody’s axis.

2. When you have two hours, listen to Ezra Klein and Jonathan Haidt. Terrific throughout. They fight, but instead of a rude street brawl you get a gentleman’s boxing match. Some of Klein’s jabs are repetitious, but overall I would give them both a lot of points.

I also would note that at one hour, forty-six minutes or so Haidt insists he is not on the right, but then immediately he proceeds to say that human nature is tribal and violent and it’s amazing that we have escaped that thanks to institutions like the rule of law. Spoken like a true civilization-vs.-barbarism conservative. It contrasts so clearly with Klein’s repeated insistence that there is a lot more social injustice in society than we are willing to admit.

I usually try to be modest about the three-axes model and say that it describes rhetorical tools, not fundamental beliefs. But I am tempted in this case to make a stronger claim, which is that Haidt is really deeply attuned to civilization-barbarism and Klein is deeply attuned to oppressor-oppressed.

Participatory vs. Broadcast

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Education realist comments,

Twitter is having much more fuss about the governance issue (typical participatory), Youtube and Facebook much more with censorship charges (typical broadcast).

The point is that a participatory medium operates on the basis of norms, but otherwise on individual controls the content. With a broadcast medium, there is a definite owner who can control the content. (The comment credits this distinction to Clay Shirky.)

participatory discourse is really what online technology created. Online forums have moderators, but aren’t “owned” in the same way. The owner can’t control what is published and have only a binary control over who can participate.

So something like the old Usenet news groups were not under an individual’s control. But when I put something on YouTube or on a blog, it is under my control.

This is a valid distinction, but only up to a point. If you look at the blogosphere as a whole, it is participatory. I can censor my blog, but I can’t censor yours. Especially in its heyday, blogging meant participating in a conversation. The trackback feature contributed to that, until it was spammed to death. I still think of blogging as more closely resembling newsgroups, not cable TV.

Will speed bankruptcy finally become policy?

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Thomas H. Jackson writes,

a “section 1405 transfer”(as defined in our section- by- section proposal that forms an appendix to this chapter) within the first forty- eight hours of a bankruptcy case. If the court approves such a section 1405 transfer, then the covered financial corporation’s operations (and ownership of subsidiaries) shift to a new bridge company that is not in bankruptcy, in exchange for all its stock.

Pointer from John Taylor, who is optimistic about the prospects for enacting legislation along these lines.

This sounds like Garett Jones’ idea for speed bankruptcy. The point is to make it possible for financial institutions to fail quickly and gracefully, without threatening catastrophic spillovers. The idea starts with a bank that is financed in part by subordinated debt. The bankruptcy process consists of changing the debt into equity in the remainder of the firm, which is now solvent because it does not have the debt on its books.

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.