David M. Glantz, Endgame at Stalingrad
David M. Glantz, Endgame at Stalingrad
[Spoilers]. In Vernor Vinge (1999), A Deepness in the Sky (New York: Tor: 0812536355). On pp. 699-700, a brief paragraph completely reverses your understanding of the progress of the book's main plot:
Sherkaner Underhill didn't seem to notice. He moved his head back and forth under the [game] helmet's light show. 'There has to be reconnect. There has to be.' His hands twitched at the game controls. Seconds passed. 'It's all messed up now,' he sobbed."
When you finish that paragraph, your picture of what is going on in the story is turned upside down.
Please join the Economic Policy Institute and the Washington Center for Equitable Growth: "for a presentation by Thomas Piketty...
...economist from the Paris School of Economics and ground-breaking researcher on income inequality—of the findings in his new book, Capital in the Twenty-First Century.
His presentation will be followed by a panel discussion moderated by Heather Boushey, Executive Director and Chief Economist of the Washington Center for Equitable Growth, with Josh Bivens, Research and Policy Director of the Economic Policy Institute, Robert M. Solow, Professor Emeritus at the Massachusetts Institute of Technology and Betsey Stevenson, Member of the White House Council of Economic Advisers, serving as discussants.
When: Tuesday, April 15, 2014 from 9:30 AM to 11:00 AM (EDT)
Where: 1333 H St NW; Suite 300, East Tower; Washington, DC 20005...
Brad DeLong (2008) This Is Brad DeLong's Grasping Reality...: Do the Cossacks Work for the Czar?: There is an awful lot in this post by Timothy Burke: John Lewis Gaddis, The Cold War: A New History. But let me, for now, focus on one issue and one issue only. Tim writes:
Easily Distracted » Blog Archive » One-A-Day: John Lewis Gaddis, The Cold War: A New History: [I]n Zimbabwe... there is first a disconnect between what imperial leaders did and what actors on the colonial periphery did, and that the actions of the latter sometimes drove the former, and that decisions made at either (or both) levels often were internally contradictory, improvisational as well as pre-determined, based on fragmentary or patchwork kinds of knowledge, and frequently opaque to the actors themselves....
Economics 101 usually paints a highly stylized, unrealistic view of the world in which free markets always produce optimal outcomes.... Most people in the world who have taken any economics have only taken first-year economics, and so they never learned that, from a practical perspective, just about everything in Economics 101 is wrong. (Complete information? Rational actors? Perfectly competitive markets?) This produces a nation of people like Paul Ryan... journalists who repeat what Paul Ryan says, and ordinary people who nod their heads.... The problem is... the way it is taught to first-year students....
In Alfred Hitchcock's (1938) The Lady Vanishes], the moment when the train is stopped in the countryside by armed fascists is the moment of revelation and clarity: all becomes clear, the adversaries reveal themselves, and the proper action heroics can begin.
In Wes Anderson's (2014) The Grand Budapest Hotel, the first moment when the train is stopped in the countryside by armed authoritarians is one of suspense broken by comic-opera comedy. Just as the militia have determined that the young Zero Moustafa's papers are not in order are going to pull him off of the train and take him away to an unknown fate, it turns out that their leader--Captain Albert Henckels-Bergersdorfer--is the same Little Albert to whom Zero's patron M. Gustave was "very kind" when as a lonely little boy he stayed with his parents at the Grand Budapest Hotel in Nebelsbad, Zubrowka: READ MOAR
Dirk Hanson: Drowning in Light: "William D. Nordhaus calculated that the average citizen of Babylon would have had to work a total of 41 hours to buy enough lamp oil to equal a 75-watt light bulb burning for one hour.
At the time of the American Revolution, a colonial would have been able to purchase the same amount of light, in the form of candles, for about five hour’s worth of work. And by 1992, the average American, using compact fluorescents, could earn the same amount of light in less than one second. That sounds like a great deal.
who for the past few years has been working on a book about the origins of modern Russian corruption, focussing particularly on the links between the ex-KGB, business and organised crime in St Petersburg in the early 1990s. I’ve read the manuscript (provisionally sub-titled: "How, why and when did Putin decide to build a Kleptocratic and Authoritarian Regime in Russia and what is its Future?" Without giving away the specific sizzling scoops it contains, I can say I found it admirable: lucid, incisive and devastating. In the light of the news from Ukraine, and the resulting sanctions recently imposed on some of what America now officially calls Vladimir Putin's "cronies" (details here), it could hardly be more timely and important.
But Mrs Dawisha’s publisher has got cold feet. She has just received this letter (posted in full below) from Cambridge University Press, saying that the legal risk of publishing the book is too great:
: Letter from Niccolo Machiavelli to Francesco Vettori: "10 December 1513: Magnificent Ambassador: 'Never late were favors divine.'
I say this because I seemed to have lost--no, rather mislaid--your good will; you had not written to me for a long time, and I was wondering what the reason could be. And of all those that came into my mind I took little account, except of one only, when I feared that you had stopped writing because somebody had written to you that I was not a good guardian of your letters, and I knew that, except Filippo and Pagolo, nobody by my doing had seen them. I have found it again through your last letter of the twenty-third of the past month, from which I learn with pleasure how regularly and quietly you carry on this public office, and I encourage you to continue so, because he who gives up his own convenience for the convenience of others, only loses his own and from them gets no gratitude.
January 2, 2008: Did Bob Reich Assassinate Tony Judt's Cat?: I was surprised to read:
'Supercapitalism': An Exchange: Tony Judt: I am surprised that Robert Reich resents my "use" of his book for the expression of some general thoughts on its topic. Taken for itself, after all, Supercapitalism would have merited at best a short notice. However, Reich's letter is welcome all the same. It helpfully reasserts the book's argument; and by its resort to invective—"jeremiad," "screeds," "emotionally gratifying," "capitalist hobgoblins," etc.—-his letter offers an instructive insight into Reich's own thought processes... his critics (me, on this occasion) are dismissed as "denigrators" of economic growth, enemies of capitalist globalization who pave the way for nativism: in short, prole-worshipping nostalgics.... If the Professor of Public Policy at UC Berkeley really thinks that we can improve upon the "cacophony" that passes for public debate with talk of "citizen values" and "leaders who inspire us" and that anything else is "brainless neo-Ludditism," then he is himself a depressing illustration of the problem he purports to address.
This visual evidence of derangement surprised me, because I remembered Tony Judt's Postwar as being rather good--and his books on the post-WWII French intellectuals, Sartre and his circle, as being excellent. And I, at least, quite liked Supercapitalism. Clearly I am going to have to go back and read Judt's review of Reich...
George Orwell: 1984: Chapter 29: "Winston was gelatinous with fatigue.
Gelatinous was the right word. It had come into his head spontaneously. His body seemed to have not only the weakness of a jelly, but its translucency. He felt that if he held up his hand he would be able to see the light through it. All the blood and lymph had been drained out of him by an enormous debauch of work, leaving only a frail structure of nerves, bones, and skin. All sensations seemed to be magnified. His overalls fretted his shoulders, the pavement tickled his feet, even the opening and closing of a hand was an effort that made his joints ache.
The beginning of the teaching which the man of Tjel named Dua-Khety made for his son named Pepy, while he sailed southwards to the Residence to place him in the school of writings among the children of the magistrates, the most eminent men of the Residence.
Brad DeLong : A Review of Keynes's Tract on Monetary Reform: Hoisted from the Archives: A REVIEW OF KEYNES'S TRACT ON MONETARY REFORM: HOISTED FROM THE ARCHIVES
I wrote this eleven years ago. I still like it:
John Maynard Keynes, A Tract on Monetary Reform (London: Macmillan, 1924)
This may well be Keynes's best book. It is certainly the best monetarist economics book ever written.
What do I mean by monetarist? Consider the book's preface, where Keynes writes:
[The economy] cannot work properly if the money... assume[d] as a stable measuring rod, is undependable. Unemployment, the precarious life of the worker, the disappointment of expectation, the sudden loss of savings, the excessive windfalls to individuals, the speculator, the profiteer--all proceed, in large measure, from the instability of the standard of value.
It is often supposed that the costs of production are threefold... labor, enterprise, and accumulation. But there is a fourth cost, namely, risk; and the reward of risk-bearing is one of the heaviest, and perhaps the most avoidable, burden on production....[T]he adoption by this country and the world at large of sound monetary principles, would diminish the wastes of Risk, which consume at present too much of our estate.
The belief that monetary instability--inflation and deflation--is the principal, or at least a principal, cause of other economic evils; the hope that sound monetary principles can be identified and, when identified, would greatly diminish uncertainty and risk; the focus on the job of the public sector being to provide the private economy with a stable measuring-rod and a stable environment--all these are core ideas of whatever we choose to call monetarism. Keynes believed these ideas very, very strongly in the mid-1920s. And his Tract on Monetary Reform is a review of economic theory and a look at the economic problems of post-WWI Europe through this set of monetarist spectacles.
The first chapter--"The Consequences to Society of Changes in the Value of Money"--may still be the best summary of the many and varied effects of deflation and inflation--on the distribution of income, on economic activity, on attitudes toward risk and reward--ever written. From our present-day standpoint, it could use a little more focus on the differing effects of "anticipated" and "unanticipated" inflation and deflation. But a great deal is packed into a short space.
The second chapter--"Public Finance and Changes in the Value of Money"--may also be the best of its class. It provides an extremely lucid introduction to the idea of the "inflation tax"--that inflation is most importantly seen as a way for governments to levy a hidden tax on holdings of real money balances, and that governments almost inevitably find themselves resorting to this tax, whether by accident or by design.
The third chapter--"The Theory of Money and the Foreign Exchanges" is in its firsts part a rapid introduction to the so-called "Quantity Theory of Money". It contains what must be Keynes's most famous line--in the long run we are all dead--which is embedded in the following discussion:
It would follow... that an arbitrary doubling of [the money stock], since this in itself is assumed not to affect [the velocity of money or the real volume of transactions] ... must have the effect of raising [the price level] to double what it would have been otherwise. The Quantity Theory is often stated in this, or a similar, form.
Now "in the long run" this is probably true. If, after the American Civil War, the American dollar had been stabilized... ten per cent below its present value ... [the money stock] and [the price level] would now be just ten per cent greater than they actually are.... But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the strom is long past the ocean is flat again.
In actual experience, a change in [the money stock] is liable to have a reaction both on [the velocity of money] and on [the real volume of transactions]...
The second part of the chapter is a rapid introduction to exchange-rate determination--the purchasing-power-parity theory of exchange rate movements, and why there might be substantial and persistent deviations from what purchasing-power-parity would suggest.
Chapter four--"Alternative Aims in Monetary Policy"--sees Keynes shift from analyst to advocate: he comes down, in the context of Western Europe in the 1920s, on the side of devaluation to bring official currency values in line with relative national price levels rather than of deflation to force national price levels into consistency with pre-WWI exchange rate parities. He argues that when you are forced to choose between maintaining a stable exchange rate and maintaining a stable internal price level, choose the second. For avoiding fluctuations in your internal price level avoids a host of evils:
We see, therefore, that rising prices and falling prices each have their characteristic disadvantage.... Inflation is unjust and Deflation is inexpedient.... [I]t is not necessary that we should weigh one evil against the other. It is easier to agree that both are evisl to be shunned. The Individualistic Capitalism of today, precisely because it entrusts saving to the individual investor and production to the individual employer, presumes a stable measuring-rod of value, and cannot be efficient--perhaps cannot survive--without one...
He argues against return to the gold standard, on the grounds that modern central banks run by clever people like him can do a better job of maintaining price stability if they are not tied to gold. Keynes's arguments in chapter four look very good: current opinion among economic historians, exemplified by Barry Eichengreen's Golden Fetters: The Gold Standard and the Great Depression, is that attachment to gold did a large part of the work in preventing central banks from stemming the Great Depression of the 1930s.
The last chapter contains Keynes's "Positive Suggestions for the Future Regulation of Money". Keynes's suggested policies are the same as Irving Fisher, or indeed as Milton Friedman: spend money to construct a good price index, and then tune monetary policy so as to stabilize internal prices. As Keynes wrote in his preface:
We leave Saving to the private investor.... We leave the responsibility for setting Production in motion to the business man.... [T]hese arrangements, being in accord with human nature, have great advantages. But they cannot work properly if the [value of] money, which the assume as a stable measuring-rod, is undependable...
The implicit point of view is that if the value of money is dependable then leaving saving to the private investors and investment to business will work well. The magnitude of the Great Depression of the 1930s would destroy Keynes's faith in the proposition that stable internal prices implied a well-functioning macroeconomy and small business cycles. But from our perspective today--in which the Great Depression is seen as a unique disaster brought on by an unprecedented collapse in financial intermediation and in world trade, rather than as the largest species of the genus of business cycles--it is far from clear that Keynes of 1936 is to be preferred to Keynes of 1924.
Besides, Keynes of 1924 writes better: his prose is clearer, less academic, less formal; his argument is more straightforward, linear, easier to follow; his style is as witty.
Over at the Washington Center for Equitable Growth: How Key Was the Seventeenth-Eighteenth Century Commercial Revolution to the Eighteenth-Nineteenth Century Constitutional-Government Revolution?:
I have been thinking about Mauricio Drelichman and Hans-Joachim Voth’s Lending to the Borrower from Hell: Debt, Taxes, and Default in the Age of Philip II. And I just finished ranting about all this over breakfast at Rick and Ann’s to the patient, good-humored, and extremely intelligent Joachim Voth.
So it is only fair that I inflict on the rest of the world what I inflicted on him:
John Holbo:& Occam’s Phaser?:
I’m rereading Nozick’s Anarchy, State and Utopia because I got to thinking: what’s wrong with good old fashioned ‘force and fraud’ anyway? Isn’t the Night Watchman state just creeping Soft Tyranny, in Tocqueville’s sense? Plus it’s obviously a moral hazard and generally destructive to private virtue. So Nozick seemed like relevant reading. Some unsystematic liveblogging:
First, Nozick is amusingly harsh, in passing, to fellow libertarians.
Since many of the people who take a similar position are narrow and rigid, and filled, paradoxically, with resentment at other freer ways of being, my now having natural responses which fit the theory puts me in some bad company.
The next time someone tells you that Corey Robin is paranoid, just explain to them that actually you are an orthodox Nozickian about these things.
Next, this classic bit:
One form of philosophical activity feels like pushing and shoving things to fit into some fixed perimeter of specified shape. All those things are lying out there, and they must be fit in. You push and shove the material into the rigid area getting it into the boundary on one side, and it bulges out on another. You run around and press in the protruding bulge, producing yet another in another place. So you push and shove and clip off corners from the things so they’ll fit and you press in until finally almost everything sits unstably more or less in there; what doesn’t gets heaved far away so that it won’t be noticed.
This is true!
Next, he spends a great deal of time answering my question. 150 pages.... His answer is... really quite complicated and ultimately not altogether clear.... I’m not convinced Nozick really has any right, by his lights, to a full-fledged Night Watchman state. Something more minimal would be more respectful of the individual rights that we are, supposedly, respecting at all costs, seems to me...
And misleadingly titled--it's not five, but more like forty:
Joel Suss: Your new book is titled “The Great Escape: Health, Wealth and the Origins of Inequality”. What is the great escape? What are the origins of inequality?
Angus Deaton: The great escape is two things: First, it is one of the basic movies that everybody knew and everybody watched in which some people break out of a German prisoner of war camp in World War II and, you know, they are very sophisticated and they dig tunnels and they make passports and fake documents and all this. And then more than 200 people get out through these tunnels and head for home. Not very many of them make it, which is something we might come back to but it was the great escape. So I use that as a sort of running analogy for the real great escape of the book which is people escaping from a sort of prison of early death, destitution, having very little – living as slaves, no democracy, no education. All the things we take for granted today, at least in some of the world, people didn’t have and so they’re escaping to freedom from the sort of “unfreedoms” of those things.
Joel Suss: The fact that some have escaped necessarily creates inequality, you point out. So the fact that there’s inequality shows that progress is happening for some. You also discuss the ‘dark side’ of inequality.
Angus Deaton: It’s complicated, right? Because it’s not, in the first instance, just bad. I mean, you don’t think that the people who got out of the prisoner of war camp made it that much worse for the people that were in. But let me give you an analogy which I think shows the ambiguity of the problem. In 1964 there was a very famous report in the United States by this surgeon general which was the first to many Americans definite evidence that smoking was really bad for your health. And, you know, that saved a lot of lives because people, they made their escape from addiction to cigarettes because they knew this new information. But one story I tell in this book is that this surgeon general, who’s a gentleman called Luther Terry, was chain smoking on his way to the press conference where he was going to introduce the surgeon general’s report. His aide was sitting next to him in the car and said “Dr Terry, I should prepare you for this, you’re not going to like it but the first question you will be asked is ‘do you smoke’?” and Luther Terry says “that’s ridiculous! That’s a private question, that’s nothing to do with public health”, you know, how dare they? And the aide said “Well, you know, I’m just telling you” and the first question was “Do you smoke” and Luther Terry said “No, I do not smoke” and they said “When did you quit?” and he said “20 minutes ago!”
Turning that story on its head; here’s the surgeon general, he’s a physician and quit within 20 minutes of his own report. Most physicians quit pretty quickly after that too. Most educated people followed. Most wealthy people followed. So then what you had was the people left behind. Now you don’t think that’s bad because you know, OK a lot of people did better, no one’s worse off that they were before, why is the world a worse place? But 50 years later when those inequalities are still there does that seem such a good thing? There’s some structural inequality there which is very – seems very hard to erase and it seems morally very ambiguous. So that’s one sort of inequality that seems really problematic. There are many others.
Joel Suss: In your book you say that inequality perpetuates itself, especially when the very rich have no stake in public health or public education. Can you elaborate on that a bit more?
Angus Deaton: So that’s the dark side of inequality. On the bright side, if the returns for going to school go up then there’s a big incentive to go to school and that brings you up and that seems terrific. On the other hand if you don’t have the talent to go to school you get left behind and there’s nothing you can do about it. And that sort of inequality doesn’t seem like such a good inequality and the people who don’t have that talent are relatively worse off than they were before. But the really dark side is what you just talked about, which is this issue when you get extreme income inequality and these people that are very very wealthy. They’re so wealthy they hardly need any government. They don’t need government education, they don’t need healthcare, they may not even need the police or the law courts because they can buy lawyers and policemen or whatever. They’re relatively independent of these things that the rest of us really need and so they have no interest in paying taxes. So it’s very much in their interests to undermine the provision of public goods.
You know the government shutdown that recently ended in the United States? The fact that it was fought over the healthcare extension, and the fact that that strategy was developed wealthiest people in the United States is a very good illustration of the sort of themes I’m talking about.
Joel Suss: You are concerned about the future of democracy because of this growing inequality. Can you elaborate on this?
Angus Deaton: I think it’s worse in the United States that it is in the United Kingdom because of the pervasive importance of money in politics. But the lobbying that’s become very important in the United States is not just the buying of politics, you can do that anywhere. I think it’s much less important in the UK still, but, before Brits get too complacent about “this would never arise here”, it didn’t use to be very important in the United States either. There’s been an enormous increase in it. In fact the real problem from an economist’s point of view is why isn’t there more of it? Because the rewards for lobbying can be ginormous and the cost of lobbying is way smaller than the rewards so why isn’t there a lot more? I think Gordon Tullock was the first to raise that question of why isn’t there more money in politics? That’s the real puzzle. Basically if the rich can write the rules then we have a real problem.
A couple colleagues of mine have recently written books in which they studied voting patterns in the US Congress and matched them up with the preferences of the constituents of those Congressmen. And they’re very closely aligned with the preference of their wealthy constituents and not at all aligned with the preference of the poor constituents. So there’s a real movement of democracy in the direction of plutocracy and that is something to worry about. On the other hand I don’t think the game is over yet. We may or may not already be at half time or something. If you think about the last election in the United States, one of my favourite stories is that, you know the plutocrats really thought they’d won and they had bought enough polls in pleasing direction to believe themselves that Romney was going to win. Apparently you could not park your private jet in Boston because every fat cat in the country who contributed to the Romney campaign had parked there for the victory party, which of course never took place. So that’s a case where the money did not overcome democracy in that way. And so, the more recent crisis is some attempt to come back at that and so there’s an endless battle over those issues going on but I don’t think we’re done yet.
Joel Suss: The book focuses on two aspects which are important for “the good life” which you say are material well-being and health – why do you look at these together?
Angus Deaton: Because I think you make a terrible mistake if you don’t. My regret is that I don’t know enough or couldn’t write a big enough book to bring other aspects of freedom in there like democracy, education, the ability to migrate, for instance, which is something I don’t really talk about at all and I think is very important. We’ve become very specialised, so economists are left to think about income, doctors left to think about health, and political scientists to think about politics. “That’s your business, this is my business” sort of idea. But if people get richer but they’re totally disenfranchised, that doesn’t seem like such a good deal. If people get richer and their health gets worse, or someone else’s health gets worse as a consequence of them getting richer, it doesn’t seem like such a great idea either.
Even in just the most mundane policy planning, health is becoming more and more expensive, so people are developing cures for cancer but they involve drugs that cost the earth. Are we going to give those to people? If you’re in Britain that would be paid for collectively. But there’s a real cost, so do you really want to, you know, give up people’s pensions for example in exchange for a few months extra life from leukemia for instance? There are some real hard choices there to be made there and you can’t think of them as, you know, “we should just do everything we can to extend people’s lives” or “we should keep people as rich as possible”.
Joel Suss: Now that the top 1% or top .1% continue to amass an ever greater share of society’s wealth – where are we headed? Are you pessimistic or optimistic?
Angus Deaton: The future is enormously hard to predict, as you know! I think there’s a lot of danger and some days I’m pessimistic and other days it seems like…there are forces on both sides of this and you know, people don’t really like being messed around with. One thing we haven’t talked about is the slow down in economic growth in the United States and other rich countries too, and I think that makes all of this that much more poisonous because if the pie’s growing you can give people extra slices without hurting what you have. But when the pies not growing, the only way I’m gonna get something is by taking away from you guys.
Joel Suss: In your new book you write that “foreign aid is doing more harm than good and it is undermining countries’ chance to grow”. Can you explain your argument?
Angus Deaton: The dominant fact for me about most poor countries is that the social contract, the contract between the government and the governed, is not there. It’s very weak and it’s very unsatisfactory and you know in many cases the government is preying on the people, not helping them. It’s what you call an extractive regime rather than a sort of helping, promoting regime. The problem is that if you’re in a country, say in Africa, where there are pretty weak institutions to begin with and you bring in a lot of foreign aid so that the leaders can run the country without ever consulting the voters or the public.
We have also got ourselves into the situation where the donors have to give money even more than the guys have to receive it. Because guys at the World Bank don’t get paid if they don’t shift the money! I think it’s much the same in the UK’s Department for International Development (DFID). I think they have very strong incentives to keep the aid flowing. Of course the people receiving it know that very well and they can behave badly and with impunity. I think that really does make this contract very fragile.
Let me clarify just a little bit though, the real point in my argument is that that mechanism is always there if you’re taking money into the country. It doesn’t mean that you wouldn’t necessarily want to do it if other things are strong enough. The strongest case is possibly that there’s millions of people alive today because of anti-retrovirals who’d otherwise be dead, and those are paid for by foreign aid essentially. Saving those lives counts for a lot, and maybe undermining the government in those circumstances is OK – but your still undermining the government so that’s really what I want to pay attention to.
And finally, “aid”, it’s become clear to me, is used in very different senses. So for instance, if we were in the United States or you here were to develop a new pharmaceutical that made it much easier to deal malaria. Some people would count that as foreign aid. But it doesn’t fall into my definition. My argument is to do with giving money to the country and undermining the government. You don’t do that when you invent a cure for malaria or a vaccine for HIV/AIDS.
Joel Suss: Could you create conditions for the aid money that goes in? Ensure that it is focused in a way that improves upon or establishes institutions that aren’t there?
Angus Deaton: Well that’s the counter argument, I was at DFID recently and they were actually much more receptive than I thought they would be. Many of these arguments are fully familiar to them, which tells me that it’s a very good aid agency. They’re people who don’t have their heads buried in the sand.
People say, ”we’re working really hard to improve institutions”. I’m a little bit sceptical that people from the outside can improve the institutions that a country should have. I give an example in the book of how would Americans react if the Swedish government came and said “we’ll pay for medicare for the next 50 years but you’ve got to legalise gay marriage and let all black people out of jail”. Of course when I was at Princeton I said that and everybody in the room said “I’ll go for that”. But the majority of Americans really would not be so keen on that.
There really is an issue about undermining sovereignty, especially in situations where the country may not have all that much choice. But on conditionality, I would love it, I think that conditionality would be great if you could make it stick but it’s just not credible because the inconstancy problems: once they misbehave you don’t actually want to do it. And secondly because there’s not just one aid agency, there’s thousands of them and if you don’t get it from the US you can get in from Germany or from Britain or from Australia – or in the end you can get it from China.
Joel Suss: In your book’s introduction, you say: “Those of us who were lucky enough to be born in the right countries have a moral obligation to reduce poverty and ill health in the world”.
Angus Deaton: The moral obligation is important because I don’t want it to sound like I’m a heartless bastard who has no interest in this partly because there’s just this: these people are hurting and if you can help them you ought to help them. Secondly, some of their hurt is to do with us, you know the colonial programme was not a great success. It might have been a great success for the Brits, it was not a great success for what happened in India. So we owe them big.
I have students I meet at Princeton who come to me and say “I want to devote my life to making the world a better place” and “I want to dedicate my self to reducing global poverty” and I say there are two ways: one is impossibly hard but I know at least one person who did that, some other people have done it. You go to Sierra Leone, you go to India or wherever. You become a citizen, you use your skills to help local groups agitate. You don’t take any money from outside, you just become like them and you use the skills and knowledge you’ve learnt here to help them. My friend Jean Drèze is an activist in India who’s been incredibly successful in doing this. He had to renounce his Belgian citizenship, it was very hard for him to even get that done. He lives without money because he’s frightened of being compromised by that and he’s been enormously successful. But it’s like the camel going through the eye of the needle right? It’s hard.
The other thing I tell my students to do is go to Washington and tell them to stop selling arms to poor countries. These are very very articulate smart kids who are going to be national leaders and god knows what else. You may not think you have much power now but you really do – go and get high positions, go and put pressure on these bastards to stop doing this. There’s a lot of stuff about aid but not that much publicity for debt relief. What about publicity about Britain selling arms? Fighting on those causes is something that people in our, rich countries have the legitimacy and standing to do because they’re citizens of those countries.
Joel Suss: Will the ‘Great Escape’, the recent exiting of many people in the world from the scourges of poverty and ill health, have a happier ending than the movie that inspired the metaphor?
Angus Deaton: I hope so! I think that I say that there are real threats there, global warming being the most obvious. But there are lots of political threats, from China, from the US. Things could go badly wrong. Bad politics has a long record of destroying human progress for long periods of time. So you want to worry about that. If you were a clear-eyed, reasonable but sceptical person you might easily think that this 250 years of progress could be just a flash in the pan, like what happened in China in the 11th century.
However, I think people always want to make the great escape and even if you have terrible setbacks, you can fill in all the tunnels but you can’t stop people knowing how to dig tunnels. Maybe you can eventually, maybe if you went back into the Stone Age people would forget how to forge documents or whatever you need to do to get out. But there’s an asymmetry there, which if you build some project and you don’t tend it the roads get all weeded up and you can’t use it after a while. But the knowledge that boiled water is safer than not boiled water is not going to evaporate in five minutes. Even if the world came to an end and we were all wandering around my mother would still be telling me to wash my hands!
Readings are available either on the web or, where there exists no web-based copy, at Graduate Services (http://www.lib.berkeley.edu/doemoff/grad/index.html) at 208 Doe Library. Access to readings available through JSTOR and other proprietary sources may require you to log on through a university-recognized computer and enter your Calnet ID. There can be high demand for the readings on reserve at peak times, and the library can make available only limited numbers of copies. In past years some students have found it useful to purchase some of the books from which material is assigned through their favorite online book seller and to assemble the materials for reproduction at a local copy shop.
Winter Break Reading: Before you show up here in the spring for Econ 2, please:
Yes, there will be a quiz…
And then, before your first section meeting:
Angus Deaton: US inequality and the Pareto Criterion:
There is much to be said for equality of opportunity, and for not penalizing people for the success that comes from their own hard work. Yet, compared with other rich countries, and in spite of the popular belief in the American dream that anyone can succeed, the United States is in fact not particularly good at actually delivering equal opportunities.
Donna Minkowitz: My favorite author, my worst interview:
It was the most unpleasant interview I’ve ever done. And one of the most instructive. Science-fiction writer Orson Scott Card wrote one of my favorite books of all time. So when he came out with a sequel, I was delirious with the desire to interview him. “Ender’s Game,” which won the Hugo and Nebula awards in 1985, is the best book I have ever read about violence. Who would have thought it would result in an interview in which I wanted to throttle the author? “Ender’s Game” is also about loving your enemies, a goal so important to me that I wrote a book about it myself. How could I guess that interviewing the author would make me question that entire project? A strangely empathic novel about 6-year-olds forced to be military commanders, “Ender’s Game” brought together a fan base that might reasonably be expected to be at one another’s throats (in some cases literally): progressives, children and soldiers....
I’d somehow failed to ascertain that Card was a disgustingly outspoken homophobe. And given his book’s brilliant, humane examination of the ethics of violence, I couldn’t have predicted he’d be someone who thought it was dandy to bomb and massacre civilians. Now, I’m someone who loves contradictions, especially in writers.... But it’s one thing to admire a bigot on the page, and another to endure a two-hour conversation with one. And my love and admiration for Card only made it worse. Talking to Klansmen was nothing compared to talking to the author of the most ethical book I’ve ever read...
Reread Walter Jon Williams's Implied Spaces on the plane yesterday. I had forgotten how good it was...
Now I find myself looking for someone who has written an essay about the Zelazny hero--the Competent Man whose problem is existential despair, and whose hero's journey is his reconnection with people, thus purpose.
The point is not saving the universe (though that happens too. The point is becoming who he is, or perhaps or rather who he once was.
But I cannot find such essay anywhere in the usual places.
Has anybody written it?
Matt Taibi: GrifTopia: from chapter 7:
My contribution to this was to launch a debate over whether or not it was appropriate for a reputable mainstream media organization to publicly call Lloyd Blankfein a motherf---er. This was really what most of the "vampire squid" uproar boiled down to. The substance of most of the freak-outs by mainstream financial reporters and the bank itself over the Rolling Stone piece was oddly nonspecific. Goldman spokesman Lucas van Praag called the piece "vaguely entertaining" and "an hysterical compilation of conspiracy theories." Van Praag even made an attempt at humor, saying, "Notable ones missing are Goldman Sachs as the third shooter [in John F. Kennedy's assassination] and faking the first lunar landing."
But at no time did the bank ever deny any of the information in the piece. Their only real factual quibble was with the assertion that they were a major player in the mortgage market-the bank somewhat gleefully noted that its "former competitors," like the since-vaporized Bear Stearns, were much bigger players.
Brad DeLong: Bequests: An Historical Perspective:
So I've finally put to bed a sketch of how the relative economic importance of bequests has changed over the past five centuries. The more I think about it, the more I think that the central points--the stunning decline in the relative importance of inherited wealth with the coming of modern economic growth, and the way in which America initially defined itself as hostile to inheritance for equality of opportunity's sake--are very important. Thus I find myself frustrated: I think I have important things to say, but I don't think I've said them as well as they deserve.
Practically every major aspect of our system of inheritance today is less than two hundred and fifty years old. Two hundred and fifty years ago, inheritance proceeded through primogeniture--as if those leaving bequests cared not for the well-being of their descendants but only for the wealth and power of the lineage head. Before the industrial revolution, inheritance played an overwhelming and crucial role in wealth accumulation and wealth distribution that it does not play today.
Migration to the New World was accompanied by a rapid shift in the perception of the purpose of inheritance as the old patterns failed to flourish in a land-rich, rapidly-growing frontier-settler economy. By the start of the twentieth century inherited wealth was regarded with suspicion in America, with even some of the richest calling for estate taxes to keep the rich from diverting the public trust of their fortunes into the pockets of their descendants. Thus the coming of social democracy to America brought with it high statutory rates of tax on large estates, which nevertheless did not raise a great deal of revenue.
Now we may be seeing another turn of the wheel, for if history teaches anything it is that even those elements of inheritance that we think of as most deeply embedded in fundamental human desires and economic laws are remarkably mutable over the centuries.
Anil Dash: What Medium Is:
First, some disclaimers: I’m writing this as I sit a few feet away from Medium’s NYC team. (I even asked them for tech support while writing this!) Ev Williams, founder of Medium, is an old friend of mine, whom I became a fan of as I was the first public user of Blogger, which he cofounded. And Ev explained the idea of Medium to me before he’d even decided on the name. So, in addition to offering the falsely-humble way of bragging that such disclosures always provide, it should be pretty clear that I’m far from objective about Medium. I like it, because I like blogging, and I want it to succeed. This piece originally appeared on Medium.
Attention Conservation Notice: tl;dr. 9000 words trying to work my way through and in the process provide a reader's guide to the techno-growth stagnation arguments of Robert Gordon, Tyler Cowen, and Brink Lindsey. The arguments are powerful. The authors are very serious economists. I wind up skeptical, and optimistic--partly because I am a techno-optimist by nature, partly because I am a politico-optimist and I think the literature confuses the past generation's failures in distribution and demand-management due to political dysfunction with failures in accumulation and innovation, and partly because I have a different more micro-incremental conception of the process of economic growth than does Robert Gordon.
I. Once and Future Ages of Diminished Expectations
Back in 1990 Paul Krugman wrote a little book--a very nice little book--called The Age of Diminished Expectations. The central point was that the long era of more than a century during which Americans could expect 2%/year growth on average in their real per capita incomes and standards of living was over. This era stretched back to the immediate aftermath of the Civil War. This era saw each generation attain a level of material wealth and well-being twice that of its predecessors: 2%/year growth for 35 years is a doubling. And, Krugman wrote, the slow growth from 1973-1990--during which real GDP per worker had been a mere 1%/year--was a harbinger of a new, more pessimistic future: an age in which Americans' formerly-great expectations of the future would have to be diminished.
Marley was dead: to begin with. There is no doubt whatever about that. The register of his burial was signed by the clergyman, the clerk, the undertaker, and the chief mourner. Scrooge signed it. And Scrooge's name was good upon 'Change, for anything he chose to put his hand to. Old Marley was as dead as a door-nail.
Attention Conservation Notice: Harley Shaiken at the Berkeley Center for Latin American Studies asked me if I could write a short comment on a piece he was running by Javier Couso about Chilean politics, "neoliberalismo", once-and-future President Michelle Bachelet, and the electoral victory of her New Majority Coalition--Couso being one of the co-authors of the currently highly influential El Otro Modelo: Del Orden Neoliberal al Regimen de lo Publico. The piece got out of control, and is not a success...
But if you are interested in my not-very-well-connected thoughts on Chilean politics, "neoliberalismo", once-and-future President Michelle Bachelet, Seeing Like a *State the really-existing socialist and neoliberal projects of the twentieth century, and the electoral victory of her New Majority Coalition, they are below the fold...
Jacopo Jacobo Timmerman writes about Gabriel Garcia Marquez writing about Fidel Castro. Marquez is amazed and transfixed as he worshipfully writes about how Castro works so late into the night, telling how many people what they should do in so many different disciplines of life--orthopedics, the baking of bread, and the distribution of beer. Timmerman n writes about how only an insane social system would require a single dictator to be the omniscient expert and authority on everything. And Timmerman n wonders why it is that Marquez responds to this situation with awe rather than with horror.
Where did I read this? When did I read this? Why can't I find it again? Why is my Google-Fu failing me?
From the annals of Great-Great-Uncle (in-Law) Ernest:
Writing as “Your Correspondent,” abbreviated to “Y.C.,” Hemingway addresses the archetypal aspiring author, nicknamed “Mice,” and offers this characteristically wise-in-a-no-bullshit-way advice on becoming a writer:
MICE: How can a writer train himself?
Y.C.: Watch what happens today. If we get into a fish see exactly what it is that everyone does. If you get a kick out of it while he is jumping remember back until you see exactly what the action was that gave you the emotion. Whether it was the rising of the line from the water and the way it tightened like a fiddle string until drops started from it, or the way he smashed and threw water when he jumped. Remember what the noises were and what was said. Find what gave you the emotion; what the action was that gave you the excitement. Then write it down making it clear so the reader will see it too and have the same feeling that you had. That’s a five finger exercise.
MICE: All right.
We should begin by translating the Communist Manifesto's phrase:
Das stehende und das ständische verdampft...
Society's order and the orders of society are steamed away...
with "orders of society" referring to the legal and cultural distinctions that make one noble, peasant, bourgeois, guild member, et cetera. We should not translate it as: >All that is solid melts into air...
How American delicacy turned Belgium into a dirty word: Because all the Americans I know tend to think that we're in a progressive, modern country, it sometimes surprises us to learn that other nations consider us big ol' prudes. And it's not just France! Our delicate sensibilities have been catered to by the English in a maneuver that gave us one of the better dirty words out there.
Alan Blinder is the latest economist out of the gate with an analytical account of the recent economic downturn. His 2013 After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead (New York: Penguin) is, I think, the best of accounts--at least the best for those without the substantial background and experience in finance needed to successfully crack the works of Gary Gorton. It is the best for four reasons:
Per Jim Henley's request:
India, a long-time bastion of Fabian socialism, instituted significant reform in 1991...
Capitalism and socialism are specific about the conditions they deem necessary for the creation of wealth and rising standards of living. Populism is not. It is a shout of pain...
Fortunately, modern societies have finally abandoned as unworkable the various economic models of socialism that were so popular a century or more ago. But we need to recognize that welfare states, unless contained, have proven similarly trouble prone. Even the long-vaunted welfare model of Sweden has felt the need for a significant overhaul...
Economists--my own tribe--hink that people are better off if they have more money--which is fine as far as it goes. So if a few people get a lot more money and most people get little or nothing, but do not lose out, economists will usually argue that the world is a better place. And indeed there is enormous appeal to the idea that, as long as no one gets hurt, better off is better; it is called the Pareto criterion. Yet this idea is completely undermined if wellbeing is defined too narrowly; people have to be better off, or no worse off, in wellbeing, not just in material living standards. If those who get rich get favorable political treatment, or undermine the public health or education systems, so that those who do less well lose out in politics, health, or education, then those who have done less well may have gained money but they are not better off. One cannot assess society, or justice, using living standards alone. Yet economists routinely and incorrectly apply the Pareto argument to income, ignoring other aspects of wellbeing...
Yep. The word "Bush" does not seem to appear at all. I guess if you can't say something nice...
I find the word "Reagan" appearing seven times; "Eisenhower" four; "Ford" twelve; "Gore" not at all; "Obama" once.
Economic growth that creates new job openings does assuage the pain of job loss, but only up to a point. Through much of the twentieth century, we sought ways to contain the pain of the capitalist process. The most universally advocated was job retraining for job losers. In 1992, President Bill Clinton, however, described such government initiatives at the time as a “confusing array of publicly funded training programs.”21 Regrettably, my experience is that the political issue is not the outcomes of job training programs but whether the politician who advocates them gains electoral popularity as a result. This is the reason why there have been so many different overlapping job training programs on the books that lost their relevance years ago and should have been discarded. Community colleges appear to be doing a much better job...
Since 1969, during the Republican administrations, social benefit spending rose by 10.4 percent annually (Reagan’s mark was 7.3 percent). Meanwhile, “spendthrift” Democrats since 1965 oversaw a “mere” 8.1 percent annual increase (Clinton’s was 4.5 percent). Of the overall rise, 40 percent occurred during the twenty years of Democratic administrations and 60 percent during the twenty-eight years of Republican administrations. This seeming political anomaly was explained to me by President Richard Nixon (who introduced automatic indexing of Social Security benefits in 1972): “If we (Republicans) don’t preempt the Democrats and get the political credit, they (the Democrats) will.” Much to my retrospective distress, neither presidents Ford nor Reagan, for whom I worked, could or would effectively constrain... benefits...
Three and only three passages containing the word:
Parenthetically, I do not consider addressing fraud to be regulation. Rampant fraud can significantly diminish the effectiveness of market competition, but fraud is theft and an issue of law enforcement…
Much, though not all, of what advocates of broadened oversight of finance are combating falls under the scope of fraud. Again, this is not the province of regulation but of enhanced law enforcement. Misrepresentation, the major source of consumer complaints, is fraud and should be readily addressed in more widespread enforcement of existing law…
The dot-com and housing bubbles bred much fraud, much of which, I suspect, to date, has gone undetected. We will never be able to fully prevent such wrongdoing. Its malignant roots are too deeply embedded in our nature. So is our inbred sense of justice in seeking to punish wrongdoers. But regulatory punishment of bubble malfeasance, beyond proven criminal fraud, which of course should be vigorously prosecuted, does little to restore our economy to where we would like it to be. Revenge may be soul satisfying, but it is rarely economically efficient…
The true size of the American subprime problem was hidden for years by the defective bookkeeping of the GSEs…. Not until the summer of 2007 did the full magnitude of the subprime problem begin to become apparent…. Had Fannie and Freddie not existed, a housing bubble could still have taken hold. But had such a bubble developed, it is likely that in and of itself, it would not have wreaked such devastation in late 2008…. Even given the excess[ive MBS holdings] of the GSEs, had the share of financial assets funded by equity been significantly higher in September 2008, arguably the deflation of asset prices would not have fostered a default contagion, if at all, much beyond that of the dot-com boom…"
Six years ago, I wrote a highly complimentary review of Alan Greenspan's The Age of Turbulence:
Brad DeLong (September 2007): Review of Alan Greenspan's "The Age of Turbulence": For nearly 20 years Alan Greenspan… was the most powerful economic central planner the world has ever seen…. Why should a central planner be setting interest rates? The only reason is that this system appears to work less badly than the alternatives we have tried…. Greenspan is world famous because he was very good and very lucky…. He made roughly 36 substantive decisions about the direction interest rates should go. Six times I disagreed with him. Five of those six times, he was right…. That is an amazing record….
I still think most of the review still holds up well. But the very end is now very questionable:
Brad DeLong (September 2007): My Review of Alan Greenspan's The Age of Turbulence
Brad DeLong (October 2008): The Republic of the Central Banker
Alan Greenspan's publisher did not send me a copy of his new The Map and the Territory. So at the moment I am running on the two different books read by Larry Summers and Steve Pearlstein:
Larry Summers: The Map and the Territory:
It was my privilege to work closely with Alan Greenspan for the eight years I served at the Treasury during the Clinton administration. His new book, The Map and the Territory, brings me back to fond memories of our conversations over the years. I haven’t always agreed with my friend but he has always left me wiser and with something to ponder. I have been struck… by the way… his approach… draws both on commitments to an individualist, libertarian philosophy and on extensive and deep immersion in economic statistics…. The range of topics and arguments makes this book a very important statement, whether one ultimately agrees or disagrees with the author. I found myself doing plenty of both. Greenspan’s range, vision and boldness is especially important at a time like the present, when Washington is preoccupied with the political and petty….
Steve Pearlstein: Alan Greenspan still thinks he’s right:
[Greenspan's] latest book, oddly named “The Map and the Territory,” is meant to be an account of his intellectual journey to discover why, as the nation’s top bank regulator and its most famous economic prognosticator, he failed to see it all coming. Why had the markets, which for centuries had been so adept at self-correction, failed this time? Why had bank executives, with every incentive to protect their fortunes and reputations, knowingly gambled it all away?
What we find, however, is that Greenspan’s journey of discovery brings him right back to… an unshakable faith in free markets, an antipathy toward market regulation, and a conviction that progressive taxes and social spending are to blame….