He writes,

But if the bulk of unpleasant, boring, unhealthy and dangerous work can be done by machines, most people will only work if they want to. In the past, that kind of leisurely life was confined largely to those born into wealth, such as aristocrats. Not all of them lived boring and vapid lives. Some of them wrote novels and music; many others read the novels and listened to the music. Some even were engaged in scientific research

I predict that within two decades, the big issue in this country will not be the distribution of income but the distribution of leisure. The Vickies will resent the Thetes for their leisure.

That is where I was for most of the latter part of May. A few notes:

1. Travel in the Internet age is amazing. An interesting question is which countries/regions/towns will benefit most as travel becomes easier and more affordable. We only stayed in one legitimate hotel, but all of our accommodations were clean, comfortable, friendly, and well-run. We put over 1000 miles on a car. I did not bring my computer, but Internet access was easier than it is when you travel in the U.S. Free WiFi seemed to be everywhere. We did not use any tour group or travel agent. We relied on friends. One friend was “Rick,” meaning the guidebook written by Rick Steves. Another friend was tripadvisor.com, which we used to double-check (and occasionally override) Rick. Another friend was “Bonnie,” our English-speaking navigation system in the rental car from British firm Sixt. Bonnie did not always choose the most obvious routes. Once, when we were trying to connect up with a major highway, she took us down a narrow lane through a vineyard that dumped us onto a road that indeed took us to the freeway entrance. Another time, however, she kept trying to get us to the highway using a route that simply was not operable, and we had to ask for directions.

2. Another interesting question is what happens if/when English loses its dominant role as everybody’s second language. In a place like Croatia or Slovenia, we see that Russians, Germans and Asians have to speak English in order to communicate with one another and with locals. But the presence of native-speaking English tourists is relatively low (more Brits than Americans). What if China becomes the largest source of tourist revenue? What if translation apps on cell phones become good enough to enable one to order a meal, register for a hotel, ask someone to take a picture, or ask for directions in any language?

3. Yet another question is what is the optimum currency area? I think that many economists nowadays doubt that the eurozone is an optimum currency area. But is Croatia? In any event, the dollar has lost its role as tourism’s medium of exchange or unit of account. Do not expect to get anywhere by offering to pay using greenbacks. In Bosnia, Montenegro, and Slovenia, you transact in euro. Croatia has its own currency, but prices for tourists are often quoted in euro. Given the importance of tourism, should all these countries simply adopt the euro?

4. On the European Union (Slovenia is in, and Croatia is in any day now), we had a very small sample of opinion (one person in each country) . Our sample thought that being in the European Union was more likely to inhibit trade than to help it. For example, Bosnian farm exports to Croatia will now be subject to costly regulation. Our sample also did not like the undemocratic nature of EU policy-making. Our sample complained of being “sold down the river by our politicians.”

5. It is very sobering to realize that this region was torn apart by war just two decades ago. What does the bitter post-Tito breakup of Yugoslavia tell us about, say, Mark Weiner’s thesis? Arguably, NATO replaced Tito as the hegemon required to keep the lid on ethnic hatreds.

6. Now that they are separate states, at least some of the countries are thriving, but I can imagine them doing better with more integration. If one could get the ethnic groups to remain peaceful with one another and at the same time avoid excessively statist economic policies, I imagine they would have to better off if they were federated in some way. If nothing else, it would get rid of a lot of wasteful border crossings. However, given the historical reality, perhaps the Balkans are better off…Balkanized. Continue reading →

Interviewed for the Smithsonian Magazine. Self-recommending, as Tyler would say. When he reads the article, Tyler will no doubt note Flynn’s prediction for Brazil, Turkey, and Kenya.

The ultimate cause is the Industrial Revolution. It affects our society in innumerable ways. The intermediate causes are things like smaller family size. If you have a better ratio of adults to children in the home, than an adult vocabulary predominates rather than a child vocabulary. Family size fell in the last century throughout the Western world. Formal schooling is terribly important; it helps you think in the way that IQ testers like. In 1910, schools were focused on kids memorizing things about the real world. Today, they are entirely about relationships. There is also the fact that so many more of us are pursuing cognitively demanding professions. Compared to even 1950, the number of people who are doing technical, managerial or professional jobs has risen enormously. The fact that our leisure has switched away from merely recovery from work towards cognitively taxing pleasures, like playing video games, has also been important.

This did not make me feel good:

The brighter you are, the quicker after the age of 65 you have a downward curve for your analytic abilities. For a bright person, you go downhill faster than an average person.

Given my age, either I am a bright person and about to lose my abilities rapidly, or I am not so bright to begin with.

Pointer from Jason Collins.

The paper is by Aghion, Akcigit, and Howitt. They see creative destruction as less important in economies that are catching up to the state of the art in technology. It is more important for what they call “frontier economies,” meaning economies that require innovation for growth.

the theory points to appropriate growth policies, i.e. policies that match the particular context of a country or region. Thus we saw that more intense competition (lower entry barriers), a higher degree of trade openness, more emphasis on research education, all of these are more growth-enhancing in more frontier countries.

Read the paper, and think about China.