On Nassim Taleb’s recent book, I write,
Taleb believes that individuals require a great deal of autonomy in order to be truly free. In this view, working in large corporations or other hierarchical environments is antithetical to freedom.
That is apropos some recent discussion on this blog.
Those who like their own party least, often loath the opposition most. I will refer to this as the defensiveness hypothesis.
Tyler Cowen’s post put me on the trail that ended with this paper.
Suppose you identify with one party, but you find that increasingly you do not like what the party is doing. You might think that your response would be to tone down your partisanship. But instead, you dial up your opposition to the other party. This approach avoids the cognitive dissonance that otherwise would result from supporting a party that is not doing what you like.
Whose blog do you want to believe?
1. Mark Thoma points to a NYT story with the headline Investment Boom From Trump’s Tax Cut Has Yet to Appear. It says,
Data on the gross domestic product, released Friday, showed that business investment grew at a 6.1 percent annual clip during the first three months of 2018, down from 7.2 percent during the first quarter last year. Excluding oil and gas investment, which is particularly volatile, the investment pace grew slightly over the past year.
2. Tyler Cowen points to a Bloomberg column by Lu Wang with the headline Trump Tax Windfall Going to Capex Way Faster Than Stock Buybacks.
Among the 130 companies in the S&P 500 that have reported results in this earnings season, capital spending increased by 39 percent, the fastest rate in seven years, data compiled by UBS AG show. Meanwhile, returns to shareholders are growing at a much slower pace, with net buybacks rising 16 percent. Dividends saw an 11 percent boost.
I like both bloggers, but in this case I fault each for showing only his preferred side of the story.
I think that this also shows that it is difficult to trust economic analysis on politically salient topics.
The essay is a very concise reply to the often-made criticism of economics and markets that human beings are social.
At a large scale, tribal solidarity does not suffice. We do not know how to coordinate to deliver the goods and services that we enjoy without using market prices. We do not know how to motivate people to choose occupations that serve the needs of the larger community except through self-interest.
Because the essay is concise, read the whole thing.
Tobias Berg and others have an abstract that says,
We analyze the information content of the digital footprint – information that people leave online simply by accessing or registering on a website – for predicting consumer default. Using more than 250,000 observations, we show that even simple, easily accessible variables from the digital footprint equal or exceed the information content of credit bureau (FICO) scores. Furthermore, the discriminatory power for unscorable customers is very similar to that of scorable customers. Our results have potentially wide implications for financial intermediaries’ business models, for access to credit for the unbanked, and for the behavior of consumers, firms, and regulators in the digital sphere.
This is interesting for many reasons.
1. Gilles Duranton and Anthony J. Venables survey the literature on “place-based policies.”
2. Benjamin Austin, Edward Glaeser, and Lawrence Summers make the case for such policies in America’s heartland.
3. James Fallows says that some of these depressed areas are successfully reinventing themselves.
They are not all good, as I point out in an essay about the bad old days of un-targeted advertising.
Twenty-two years ago, there weren’t large Internet companies tracking your every move and serving targeted advertising. But that does not mean that life was perfect for Internet users. Those were also the days when we were deluged with emails with the subject line Enhance Your Penis!. The emails were sent indiscriminately. There was no interest in penis-enhancement products on the part of the vast majority of recipients, quite a number of whom did not even have penises.
As a libertarian, I find large corporations a fascinating, and sobering counter-argument to my libertarian ideas. Here is an example of central planning evidently working better than distributed self-coordination. The question is why is this true, and at what scale does it stop being true (as it evidently does, at the scale of entire countries).
To my mind, a country is essentially a large, heavily armed not-for-profit corporation. If you dislike big corporations, you should dislike big government. And, if you are a libertarian who thinks big government exists only because it is heavily armed, then how do you explain the existence of (unarmed) large corporations? (And don’t tell me they exist because they’ve captured the armed government – they may do that, but that’s not why they exist.)
Also, as a libertarian, I find I have a distaste for large corporations (if you dislike big government, you should dislike big corporations), which gives me a starting point for finding common ground with my leftist friends (who generally dislike large – not all – corporations, but think government – a large, armed corporation is the solution).
As you know, the common ground with the Left is rather limited in this regard. The Left thinks of the government as a countervailing power. It represents “us” against the power of corporations. Libertarians do not think of the government as representing “us,” or certainly not doing a very good job of it. In that regard, the libertarian perspective does not strike me as obviously right or obviously wrong a priori. I would say that as a matter of empirical observation, I think that the libertarian perspective works better. That is, I think that market competition tends to work better than government at curbing abuse by large corporations. As I like to put it: “Markets fail. Use markets.”
I’ve been thinking a lot lately about how you’d launch rival social networks. My sense is that unless you can find something that lets you stay in touch with your friends that are already on Twitter and Facebook, you sort of have no prayer of launching anything new. And so my analogy for this is to say, imagine that you had a web browser that could only look at Facebook. It couldn’t look at any other website. Well, that’s what we had more or less in the days of AOL and CompuServe. They finally had to open up, otherwise they would die. But that was that walled-garden model.
In many ways, that’s now what we’re all dealing with on our phones, you know? My Facebook app won’t let me look at Twitter, and it won’t let me look at Mastodon, and it won’t let me look at anything else. I would really like to get back to the moment where I could have a single application that could let me look at existing social networks and new social networks. And that seems like the sort of direction we’d need to go in if we actually wanted more competition and more creativity than we’re getting right now.
Thanks to commenter Handle for the pointer to a whole set of articles on the theme of “what went wrong on the Internet.” The entire interview has a lot of thoughts that are similar to mine. But not the last two paragraphs.
He suggests giving users information about why they are being fed certain content and certain ads. I would say that most users would do nothing with that information. By the way, that is also a valid argument against my idea for a competitor to Facebook where users give more indications of what they would like to see, rather than having it fed to them by algorithm. That is, users are too lazy to create metadata.
Which leads me to think that we need to pay attention to the problems that emerge when a service caters to users who aren’t very savvy and aren’t very pro-active. The folks who need to be regulated are not the service providers–it’s the users.
As a thought-experiment, perhaps we should imagine requiring a license to use the Internet, or some parts of it. The analogy would be with a driver’s license. There are different licenses with different restrictions. I cannot drive a bus, for example. So maybe certain apps on our phone would not be available until you got the necessary license, which might require you to pass a test of some sort.
The question is not whether you would want this implemented–I am pretty sure that I would not. But come up with ideas as if you were going to implement this, just to see how the problem looks from that perspective.
Paul Krugman recently made a splash in a New York Times column by suggesting there are no “serious, honest, conservative intellectuals with real influence,” referring to the “unicorns of the intellectual right.” I largely agree with his criticisms, but I would like to offer a very different perspective. This column is my corresponding warning to the left
I think that for an intellectual to be worthy of respect, he or she must be able to recognize, understand, and confront the best arguments of the other side. This aligns closely with what Bryan Caplan calls the “ideological Turing test.” By that standard, Krugman himself is a dismal failure. The vast majority of his columns are comprised of nothing but asymmetric insight, the self-deceptive belief that you understand your opponents better than they understand themselves.
Cowen says,
the right is extremely familiar with the doctrines of the left and center-left, but the converse is somewhat less true.
That’s putting it mildly. Krugman’s credentials are imposing, and Kevin Williamson’s are not. But in a one-on-one debate between them, I would bet on Williamson.