John Maynard Keynes (1919): The Economic Consequences of the Peace: "After 1870 there was developed on a large scale an unprecedented situation, and the economic condition of Europe became during the next fifty years unstable and peculiar...
John Maynard Keynes (1919): The Economic Consequences of the Peace: "After 1870 there was developed on a large scale an unprecedented situation, and the economic condition of Europe became during the next fifty years unstable and peculiar...
Live from Nineteenth-Century London: John Stuart Mill (1848, 1871): Principles of Political Economy: "Hitherto it is questionable if all the mechanical inventions yet made have lightened the day's toil of any human being...
Q: Have BREXIT and Trump increased the probability of a breakup of the eurozone?
That Britain voted for BREXIT, even under the false pretense of an extra 350 million pounds a week for the health service, is a strong indication that the tide of globalization and integration is not irresistible. That Americans... well, Americans did not vote for Trump--they voted for Clinton. That the quirks of the electoral college have made Trump president-elect is a strong indication that the tide of globalization and integration is not irresistible.
Live from Lancashire: Pseudoerasmus: Random Thoughts on Critiques of Allen’s Theory of the Industrial Revolution: "I love the work of Robert Allen...
I must take exception to something said earlier today by the very sharp Neville Morley:
Neville Morley: When It Changed: "Unless you do assume that one strand of historical development...
...changes in productivity, or technology, or ideology--is determinative of all the others, then there’s no particular reason to assume that everything will change according to the same chronological pattern...
I think he has gone wrong here. In the past--even in the first half of the nineteenth century--the assumption that there was one principal engine driving the belts and powering the orreries of history was just that: an assumption, and a simplifying and probably badly chosen assumption.
But for the past hundred and fifty years things have been different.
In the "long" twentieth century the pace of economic transformation has been so great as to force nearly every other aspect of history to respond according to the same chronological pattern.
Thomas Allen Horne: Property Rights and Poverty: Political Argument in Britain, 1605-1834: "To appeal to laissez-faire on all occasions, [J.R. McCulloch wrote]...
savors more of the policy of a parrot than of a statesman or philosopher...
Quote Investigator: Teach a Parrot to Say ‘Supply and Demand’ and You Have an Economist: "Dear Quote Investigator: There is a humorous saying about parrots and economists that is often attributed to the philosopher and satirist Thomas Carlyle...
...Sometimes the joke is simply ascribed to Anonymous. Here are three versions:
Ah. I see that you have found the first draft of my opening lecture for Econ 115 next semester... https://twitter.com/BrankoMilan/status/804205835543019520 https://t.co/lK82RVQudb
I think whether it is more useful to do the tell of 20th century economic history as the "short" 1914-1989 (as Hobsbswm does) or the "long" 1870-2012 (as I want to) rests on two analytical judgments:
Good Riddance to Fidel Castro!: Fidel Castro has retired. Good riddance!!
That the Lenin-Trotsky-Stalin Authoritarian Project of which Fidel Castro was the next-to-last exemplar was not an advance toward but a retreat from a better world was obvious long, long ago. Quite early--Kronstadt?--it was clear to all save the dead-enders that the project was a mistake.
As Rosa Luxemburg wrote in "The Russian Revolution":
November 26, 2016 at 06:32 AM in Economics: Growth, Economics: History, Economics: Inequality, History, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (Tuesday) Hoisted from Archives, Streams: Cycle, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (6)
Ana Navarro: @ananavarro: "Why Miami celebrating? Ppl like my friend, Claudia Puig. Her dad killed by a Castro firing squad. Her uncle was a political prisoner 25 yrs."
Sean Carroll: @seanmcarroll: “'Universal health care' and 'other countries were worse' don’t make Castro worth celebrating. Repressive dictatorships are bad."
Adrian Monck: @amonck: "Channelling Public Enemy on Elvis:"
Stefan Leifert: @StefanLeifert: "Jean-Claude Juncker: 'With the death of Fidel Castro, the world has lost a man who was a hero for many'."
For all of our stooges searching for a Stalin, half-wits hailing a Hitler, morons marching for a Mussolini, and clowns craving a Castro this morning. A suitable epitaph for Fidel Castro, from Gabriel Garcia Marquez:
A vast bureaucratic incompetence affecting almost every realm of daily life, especially domestic happiness... has forced Fidel Castro himself, almost thirty years after victory, to involve himself personally in such extraordinary matters as how bread is made and the distribution of beer...
Jacobo Timmerman (1990): A Summer in the Revolution: 1987: "When I read one of Gabriel Carcia Marquez's essays on the Commandante [Fidel Castro], I was remind of paeans to Stalin...
November 26, 2016 at 06:02 AM in Economics: Growth, Economics: History, Economics: Inequality, Funny, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (Tuesday) Hoisted from Archives, Streams: Cycle, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (1)
For all of our stooges searching for a Stalin, half-wits hailing a Hitler, morons marching for a Mussolini, and clowns craving a Castro this morning:
Jaybird: Vladimir, Joseph, and Zedong:
Has anybody here seen my old friend Vladimir?
Can you tell me where he’s gone?
He freed a lot of people,
But it seems the good they die young.
You know, I just looked around and he’s gone.
AP: Fidel Castro Dead at 90: "HAVANA (AP) — Cuban President Raul Castro has announced the death of his brother Fidel Castro on Cuban state media. Fidel Castro was 90 years old..."
Some teabaggers like Augusto Pinochet. Some herbal teabagger liked Fidel Castro. Peas in a pod:
Filling: 2 cups pumpkin, 1 cup sugar, 2 cups heavy cream, 4 large eggs (2 oz. each: 1 cup total), 2 teaspoons cinnamon, 1 teaspoon ginger, 1/2 teaspoon nutmeg, 1 pinch clove...
Crust: 1 3/4 cups flour, 5 oz. butter, 2 oz. shortening, 1 egg yolk, 3 tablespoons sugar, 2 teaspoons orange zest, 2 teaspoons lemon zest...
Whipped Cream: to taste...
Hoisted from the Archives: 470 years ago, in 1543, King Henry VIII Tudor of England married his sixth and last wife, Katherine Parr. He also:
A busy king, for one so sick and mad.
The best thing I have seen on the mess that America has now gotten itself into:
Luigi Zingales: The Right Way to Resist Trump: Five years ago, I warned about the risk of a Donald J. Trump presidency. Most people laughed...
They thought it inconceivable. I was not particularly prescient; I come from Italy, and I had already seen this movie, starring Silvio Berlusconi, who led the Italian government as prime minister for a total of nine years between 1994 and 2011. I knew how it could unfold.
Diane Coyle: The Trade-Investment-Service-Intellectual Property Nexus: "I’ve managed to resist reviewing Richard Baldwin’s new book The Great Convergence: information technology, trade and the new globalization until now...
Neville Morley: Vicarious Virtue: "The seminar text for my Roman History course over the last fortnight has been the opening of the third book of Varro’s Rerum Rusticarum...
Let me distinguish between:
Supervulgar Trumpism: Donald Trump will return manufacturing employment to 24% of the nonfarm labor force.
Vulgar Trumpism: Donald Trump will renegotiate NAFTA and China's accession to the WTO. We will not get all or even most of the manufacturing jobs back, but the industries and the communities will be healthy.
Semi-intelligent Trumpism: The U.S. ought to be a high savings capital and manufactures exporting country, like Germany and Japan. Bad macro and trade policies--the Reagan and Bush 43 deficits, keeping the strong dollar policy long past its sell-by date, prioritizing finance over manufacturing--accelerated the decline of manufacturing employment well beyond its proper technology driven pace and eroded our valuable communities of engineering practice.
Ken Rogoff: "In nine years, nobody will be talking about 'secular stagnation'. I've been debating Larry on this for a year, and I started saying 'in ten years..., and so for consistency I now say 'in nine years...".
This is a wager that the full-employment long-run in which money and its associates are a veil that does not affect or disturb the Say's Law operation of the economy will come not more than 18 years after the shock of 2017--or at least that whatever remnants of the effects of that shock on the business cycle come 2025 will be dwarfed the effects of other business cycle shocks subsequent to now.
I do know from experience that one disagrees with Ken Rogoff at one's grave intellectual peril. But is he correct here? I really cannot follow him to the conclusion he wants me to reach...
Things to reread and chew over:
Whether Thomas Jefferson's vision of the future of America was coherent was unclear then and remains unclear now.
Jefferson, like most of his founding-father contemporaries, was steeped in one version of classical history: Roman history as a morality play. Jefferson and many, many of his revolutionary peers assumed that yeoman farmers--Cincinnati--were the only possible social class that could maintain a free republic. They all believed that Rome was a great, free Republic because of its fiercely-independent farmers who nevertheless loved their city and would--like Cincinnatus--drop their ploughs and instantly take up their swords to defend (and conquer), and then return to their ploughs after the war was over.
November 14, 2016 at 11:34 PM in Economics: Growth, Economics: History, History, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (Wednesday) Economic History, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (31)
Must-Read: I would add Mongkut and Chulalongkorn in Thailand, and Mohammed Ali in Egypt, to Pseudoerasmus's list here...
In a good world, this would be not a blogpost but a symposium. This would be a conference. Admittedly, since Pseudoerasmus is and probably must remain anonymous, he/she would have to teleconference in her/his disguised-voice avatar:
Pseudoerasmus: State Capacity & the Sino-Japanese Divergence: "Why China did not industrialise before Western Europe may be a tantalising and irresistible subject, but frankly it’s a parlour game...
...What remains underexplored, however, is the more tractable issue of why Japan managed, but China failed, to initiate an early transition to modern growth and convergence with the West. A recent paper argues that the gap in state capacity between Qing China and Tokugawa Japan was responsible for the divergence.
Please note, this blogpost disputes that argument:
Stephen Cohen and J. Bradford DeLong (2016): Concrete Economics: The Hamilton Approach to Economic Policy (Cambridge: Harvard University Press) http://amzn.to/2fJnSEe | Keynote
I'm going to call this debate--from six and four years ago--for me. I do think I was right then. But even were I to concede that I was not right then about what "economics" was in its essence, I believe I can convincingly make the case that I am correct now:
November 07, 2016 at 01:11 PM in Economics: History, History, Long Form, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: (Tuesday) Hoisted from Archives, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (3)
Here I believe Noah Smith is incomplete when he claims:
Everyone is born with an endowment of Asskickery. The state monopoly on the use of force is simply a government redistribution of Asskickery. Libertarians, of course, should realize this.
The state monopoly on the use of force is not just a redistribution of the endowment of Asskickery. It is also a revelation of who has how much of it. When the amount of Asskickery with which individuals are endowed is hidden, the requirements of the Coase Theorem are not met, and so bargaining costs keep the economy from attaining a Pareto optimum.
For example, in twelfth-century Ireland, the distribution of Asskickery among Richard "Strongbow" de Clare, Diarmait Mac Murchada, and Ruaidrí Ua Conchobair was uncertain. Richard and Diarmait could reduce their bargaining costs to zero by aligning their interests via the marriage of Diarmait's daughter Aoife to Richard (shown below). But there remained the bargaining costs between Richard and Diarmait on the one hand and Ruaidrí on the other (also shown below), which were very large and very dissipative indeed. Not a Pareto-optimal outcome in the least:
Curiously enough, if you websurf to the National Gallery of Ireland, its website focus on only a small portion of "The Marriage of Strongbow and Aoife":
Must-Read: Noah Smith: Cosma Shalizi Argues That Adam Smith Is Not a Real Economist Edition: "Everyone is born with an endowment of Asskickery...
...The state monopoly on the use of force is simply a government redistribution of Asskickery. Libertarians, of course, should realize this.
Matthew Yglesias: @mattyglesias: "I think one driver of different views on the "economic anxiety" meme is how much of this stuff you get on a daily basis:
October 30, 2016 at 10:01 AM in Economics: History, History, Long Form, Moral Responsibility, Obama Administration, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: (Tuesday) Hoisted from Archives, Streams: Across the Wide Missouri, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (12)
William H. Janeway and Raj Kushwaha: Enterprise Software: Death and Transfiguration: "Once upon a time — and it was a time that lasted some thirty years...
October 29, 2016 at 05:30 AM in Economics: History, Economics: Inequality, Economics: Macro, History, Long Form, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (9)
The roots of growth: Brad DeLong examines a study that places the origins of the Industrial Revolution in fifteenth-century Europe.
A Culture of Growth: The Origins of the Modern Economy
Joel Mokyr Princeton University Press: 2016.
What is modern economic growth? Going by the best available measure (it might be more honest to say 'guess'), today's average material living standards and economic productivity levels are some 20 times what they were in the agricultural era (about 6000 BC to AD 1500). And the efficiency with which humanity uses technology and organization to transform resources into useful commodities is currently growing at 2% per year — perhaps 100 times the rate common before the Industrial Revolution... Read MOAR at Nature
Mitt Romney and "Those People": Reading Ta-Nehisi Coates Weblogging: Ta-Nehisi Coates:
No One Left To Race-Bait To: Dave Weigel points out the difference between the covert racism of a young cagey Pat Buchanan in the days of the Southern strategy, and overt racism of the pariah Pat Buchanan banished to Fox News…. Calling the first black president a "drug dealer of welfare" is… Buchanan deploying symbolism. The problem is that the world has changed, and this is precisely the kind of rhetoric that would end a presidential candidacy today.
October 27, 2016 at 07:32 AM in Economics: History, Economics: Inequality, History, Moral Responsibility, Obama Administration, Political Economy, Politics, Streams: (Tuesday) Hoisted from Archives, Streams: Across the Wide Missouri, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (0)
The appearance of "Niall Ferguson" in my inbox stream as the posts from October 2012 flow across reminds me that I have a very serious point here that has not gotten sufficient attention.
To some degree this is my fault:
So let me try again. It is, I think, an important story.
It involves more than just a (flawed and failed) attempt by Niall Ferguson to feed tainted red bigotry meat to a California audience he did not understand.
It also involves bad-faith intellectual debate and intellectual history from von Hayek and Schumpeter, who thought it a good use of their time to misrepresent and slander a recently-dead man who was a greater economist than either of them could ever hope to be.
And it involves Gertrude Himmelfarb. I am not sure whether Gertrude Himmelfarb was simply misled here by trusting Schumpeter and his History of Economic Analysis as an authority on technical economic areas that she could not follow, or whether she is also a bad intellectual historian actor here. She certainly cuts off Keynes's "Puritan fallacy" quote at a very suspicious place if it is the first...
October 24, 2016 at 02:46 PM in Economics: History, Economics: Macro, History, Long Form, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (BiWeekly) Honest Broker, Streams: (Tuesday) Hoisted from Archives, Streams: Across the Wide Missouri, Streams: Cycle, Streams: Economics, Streams: Equitable Growth, Streams: Highlighted | Permalink | Comments (5)
Must-Read: Philip T. Hoffman: Why Was It Europeans Who Conquered the World?: "By the eighteenth century, Europeans dominated the military technology of gunpowder weapons...
...which had enormous advantages for fighting war at a distance and conquering other parts of the world. Their dominance, however, was surprising, because the technology had originated in China and been used with expertise in Asia and the Middle East. To account for their prowess with gunpowder weapons, historians have often invoked competition, but it cannot explain why they pushed this technology further than anyone else. The answer lies in the peculiar form that military competition took in western Europe: it was a winner take all tournament, and a simple model of the tournament shows why it led European rulers to spend heavily on the gunpowder technology, why the technology was advanced as a result, and why political incentives and military conditions made the rest of Eurasia fall behind.
William Muss-Arnolt, trans.: The Man Who Has Seen All Things:
Around the enclosed space that is Uruk he walks, mighty like the wild bull, head raised high. None with weapon might challenge him as rival.
His men stand at attention, longing for his orders; but the old men of Uruk grouse that Gilgamesh has left no son to his father, for his arrogance has grown boundless. He has taken all their children, for is Gilgamesh not the shepherd of his people?
Has the Longer Depression accelerated the trend of "losing" prime-age males, crowding what would have been a generation of the trend into a decade, as I suggested at the FRBB Conference and here in contradiction to what Alan Krueger and Gabriel Chodorow-Reich were saying? No. Or, rather, you could say it looked like that as of 2013 if you thought recovery was then substantially complete. You really cannot say that anymore.
The extremely sharp Gabriel Chodorow-Reich in Email:
Gabriel Chodorow-Reich: Prime age male by 5 year age bin: "Here is a figure and a table related to our back-and-forth...
The government should help people who are materially struggling. Globalization definitely left some segments of the population struggling, and they deserve help. White people, while still economically dominant over black and Latino Americans in basically every way possible, can suffer from poverty too. But there’s something striking about this line of commentary: It doesn’t take the stated concerns of Trump voters, and voters for similar far-right populists abroad, seriously in the slightest.
The press has gotten extremely comfortable with describing a Trump electorate that simply doesn’t exist.
Edward Luce: The Boy Who Escaped Trump Country:
Coaxing people in Buchanan County to open up to a stranger is not the easiest of tasks. “We’re leery of outsiders,” says Dana Oliver, a 22-year-old single mother who lives in a mobile home and works two part-time jobs--serving in a bar and managing stock in a dollar store:
They make us look stupid, as though everybody’s missing their teeth or high on Oxycontin [a prescription opioid]. Seems like we’re easy to stereotype.”
In exchange for Oliver’s insights, I agree to be e-introduced to her friend, Daniel Justus, who would show me another side of things. “Not everyone in Buchanan is going to hell,” she says. “Some people are making something of their lives.” I quickly forget about our deal as Oliver tells me about her travails. But that evening, an email arrives from Daniel. He calls himself “the boy who escaped”. It piques my interest. What, I wonder, was Daniel escaping from?
October 09, 2016 at 12:15 PM in Economics: Growth, Economics: History, Economics: Inequality, Moral Responsibility, Philosophy: Moral, Political Economy, Politics, Streams: (Weekend) Reading, Streams: Across the Wide Missouri, Streams: Cycle, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (0)
This, from the very sharp Martin Wolf, seems to me to go substantially awry when Martin writes the word "convincingly". Targeting inflation is not easy: you don't see what the effects of today's policies are on inflation until two years or more have passed. Targeting asset prices, by contrast, is very easy indeed: you buy and sell assets until their prices are what you want them to be.
Live from the Roasterie: Ask the Internet Edition: Who first said: "A federal government strong enough to build roads is a federal government strong enough to free your slaves"?
The extremely-sharp Miles Kimball quotes Randy Barnett, who is... not so:
Randy Barnett: Growing up, I was like most Americans in my reverence for the Constitution… Until I took Constitutional Law at Harvard Law School.
The experience was completely disillusioning, but not because of the professor, Laurence Tribe, who was an engaging and open-minded teacher. No, what disillusioned me was reading the opinions of the U.S. Supreme Court. Throughout the semester, as we covered one constitutional clause after another, passages that sounded great to me were drained by the Court of their obviously power-constraining meanings. First was the Necessary and Proper Clause in McCulloch v. Maryland (1819)..
John Maynard Keynes (1937): The General Theory of Employment:
I: I am much indebted to the Editors of the Quarterly Journal for the four contributions relating to my General Theory of Employment, Interest and Money which appeared in the issue for November, 1936. They contain detailed criticisms, much of which I accept and from which I hope to benefit. There is nothing in Professor Taussig's comment from which I disagree. Mr. Leontief is right, I think, in the distinction he draws between my attitude and that of the "orthodox" theory to what he calls the "homogeneity postulate." I should have thought, however, that there was abundant evidence from experience to contradict this postulate; and that, in any case, it is for those who make a highly special assumption to justify it, rather than for one who dispenses with it, to prove a general negative. I would also suggest that his idea might be applied more fruitfully and with greater theoretical precision in connection with the part played by the quantity of money in determining the rate of interest (Cf. my paper on "The Theory of the Rate of Interest" to appear in the volume of Essays in honor of Irving Fisher). For it is here, I think, that the homogeneity postulate primarily enters into the orthodox theoretical scheme.
Barry Eichengreen: Closing Remarks to Policy Challenges in a Diverging Global Economy:
It is one of the great pleasures of my association with the Federal Reserve Bank of San Francisco to give these closing remarks. Having done this twice before, in 2011 and 2013, this affords me the opportunity not just to highlight some insights from this year’s papers but also to look back at the conclusions of those earlier conferences and see how they stack up in light of recent events.
On September 9, 2016 the Initiative on Business and Public Policy and the Hutchins Center on Fiscal and Monetary Policy at Brookings hosted a forum on the policy implications of the growth slowdown.
Must-Read: Ernesto Dal Bo, Pablo Hernandez, and Sebastian Mazzuca: The Paradox of Civilization: Pre-Institutional Sources of Security and Prosperity:
The rise of civilizations involved the dual emergence of economies that could produce surplus (“prosperity”) and states that could protect surplus (“security”)...
The highly-esteemed Mark Thoma sends us to Paul Krugman. In praise of real science: "Some people... always ask, 'Is this the evidence talking, or my preconceptions?' And you want to be one of those people...".
Paul's most aggressive claim is that our economics profession in 2007 would have done a much better job of economic analysis and policy guidance in real time had it consisted solely of clones of Samuelson, Solow, Tobin--I would add Modigliani, Okun, and Kindleberger--as they were in 1970: that the vector of net changes in macroeconomics in the 1970s were of zero value, and that the vector of net changes in macroeconomics since have been of negative value as far as understanding the world in real time is concerned.
Musings on "Just Deserts" and the Opening of Plato's Republic:
Greg Mankiw Defending the 1% proposes what he calls the "just deserts" theory of social justice:
What you have gained and hold by playing by the economic rules is yours: social justice consists in not cheating or injuring people, and not being cheated or injured in turn.
This is an old theory: we see it first in the western intellectual tradition nearly 2400 years ago, in the opening of the dialogue that is Plato's Republic. It is advanced by Kephalos...
Live from the Brookings Institutions: In the United States today, the cost of 365 x 2000 = 730,000 calories of edible corn at the Burns Harbor Elevator in Portage, IN is $50. $50/year for staple calories...
UPDATE: Relatively happy now: Brookings Productivity Festival: DeLong Edited Transcript (September 9, 2016)
I am not happy with any of the presentations/notes I prepared for this conference. But, for what it's worth, here is the organizers' precis, and my three attempts at being informative and coherent:
"I now know it is a rising, not a setting, sun" --Benjamin Franklin, 1787