Comment of the Day; Neville Morley: A Note on the Jeffersonian Road Not Taken: "A Jeffersonian United States, founded on Cincinnatus-like citizen farmers...
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)
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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)
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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)
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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)
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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)
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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)
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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)
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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:
First, I need to stop flashing to the dystopian future which Bronwyn here has made me imagine. It is one in which drones overfly my house with chemical sensors constantly sniffing to see if I am cooking Kung Pao Pastrami--without having bought the required intellectual property license from Mission Chinese...
Three big things have been going on with respect to productivity growth here in the United States over the past half century:
The subject for the day is the domestication of the horse--where and when and how and why, as recounted by David W. Anthony in his fascinating and absorbing new book, The Horse, the Wheel, and Language (2008)--and also a salute to the luckiest horse in the Fifth Millennium BCE. Per Anthony, the date is about 4800 BCE; the place is in what he chooses to call ‘the Pontic-Caspian steppes,’ just above the Caspian Sea. The ‘why’ is interesting: apparently not for riding, but for food—horses were big and meaty and could live over the winter in cold climates (riding came later).
As to ‘how,’ the flip answer is ‘it wasn’t easy,’ which is not surprising when you stop to think of it: horses—or, more precisely, stallions—are a notoriously tricky lot and they wouldn’t take kindly to being stabled or hobbled or slapped into harness. But as to precisely how, the DNA evidence provides a remarkable clue. Per Anthony:
September 14, 2016 at 08:06 AM in Books, Economics: Growth, Economics: History, History, Philosophy: Moral, Political Economy, Politics, Streams: (Tuesday) Hoisted from Archives, Streams: (Wednesday) Economic History, Streams: Cycle, Streams: Economics, Streams: Equitable Growth | Permalink | Comments (7)
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Must-Read: The mysterious Pseudoerasmus says--I believe correctly--that Cuba's very real accomplishments in raising human development index values since 1959 are not nearly enough to offset the other major manifest flaws of the Castro brothers' regime in the scales of history.
I would add that had Cuba been a normal North Atlantic country since 1957, then starting from where it was then--as not a poor but a middle-income country--and following the standard North Atlantic historical trajectory would have delivered equivalent improvements in human development index, plus lots more in the way f material plenty, plus a free press, plus real elections, plus a whole host of other bourgeois virtues and comforts:
Pseudoerasmus: Ideology & Human Development:
My overall point can be summarised thus....
The "Institutional" Puzzle
Cf: Greg Mankiw (2015): Defending the 1%
The Opening of Plato's Republic Sokrates:
I went down yesterday to the Piraeus with Glaukon the son of Ariston, that I might offer up my prayers to the goddess; and also because I wanted to see in what manner they would celebrate the festival, which was a new thing. I was delighted with the procession of the inhabitants; but that of the Thrakians was equally, if not more, beautiful.
William Freehling: Secessionists Triumphant http://amzn.to/1U15syi:
Paul Krugman (2011): Mr Keynes and the Moderns:
It’s a great honour to be asked to give this talk, especially because I’m arguably not qualified to do so.1 I am, after all, not a Keynes scholar, nor any kind of serious intellectual historian. Nor have I spent most of my career doing macroeconomics. Until the late 1990s my contributions to that field were limited to international issues; although I kept up with macro research, I avoided getting into the frontline theoretical and empirical disputes.
Must-Read: My late friend Susan Rasky was, in general, annoyed at William Grieder.
You see, she was covering Stockman and the budget in the New York Times in 1981. She was trying to tell as it happened the same story about David Stockman and his budget that William Grieder was going to tell in the Atlantic Monthly piece he published at the very end of the year.
But, she told me once, she got substantial pushback from her New York Times editors, which hobbled her. Why? In part because the Washington Post reporters--being supervised by Grieder--were telling a very different story. And her editors said that if she were right the Post would be on board as well. Grieder, she thought, might not only have been keeping his own material from the reporters he supervised, but also may have been steering the reporters he supervised away from the real story--he certainly wasn't dropping them any hints, and wasn't doing them any favors as they tried to cover a complex situation--the real story that Grieder was saving for the Atlantic, and that Rasky was trying to tell as it was happening:
William Grieder (1981): The Education of David Stockman:
As budget director, [Stockman] intended to proceed against many of the programs...
Live from Trumpland: David Atkins: David Brooks’ Realignment Won’t Happen:
Reading David Brooks.... You can tell that unlike most of his conservative colleagues he genuinely means well... [but] a special kind of insufferable worldview that evades common sense.
J. Bradford DeLong :: U.C. Berkeley, NBER, and WCEG :: 2016-09-09 :: http://tinyurl.com/dl20160909b | https://www.brookings.edu/events/the-productivity-puzzle-how-can-we-speed-up-the-growth-of-the-economy/
J. Bradford DeLong :: U.C. Berkeley, NBER, and WCEG :: 2016-09-09 :: http://tinyurl.com/dl20160909a
Musings on Productivity (Triggered by (but not to be presented at) the September 8-9, 2016 Hutchins Center Brookings Institution Productivity Festival)
J. Bradford DeLong :: U.C. Berkeley, NBER, and WCEG :: 2016-09-07 http://tinyurl.com/dl20160907a | https://www.brookings.edu/events/the-productivity-puzzle-how-can-we-speed-up-the-growth-of-the-economy/
Hoisted from the Archives: Daniel Kuehn: Yes, Acemoglu and Robinson's Piketty Review Is Strange:
I just happened to get to one of the parts in Piketty that Acemoglu and Robinson quote to show that Piketty doesn't think institutions matter (from page 365):
Over at Project Syndicate: The Economic Trend is Our Friend: These are days of grave disillusionment with the state of the world. Sinister forces of fanatical, faith-based killing – something that we in the West, at least, thought had largely ended by 1750 – are back. And they have been joined by and are reinforcing forces of nationalism, bigotry, and racism that we thought had been largely left in the ruins of Berlin in 1945. In addition, economic growth since 2008 has been profoundly disappointing. There is no reasoned case for optimistically expecting a turn for the better in the next five years or so. And the failure of global institutions to deliver ever-increasing prosperity has undermined the trust and confidence which in better times would serve to suppress the murderous demons of our age. Pessimism thus understandably comes easy these days – perhaps too easy... Read MOAR Over at Project Syndicate
Dean Acheson: On that Triangulating Bastard Grover Cleveland: From Dean G. Acheson: A Democrat Looks at His Party:
At the end of the [nineteenth] century there was a lesser, but serious, missed opportunity for Democratic leadership in President Cleveleand's failure to grasp the significance of the Populist and labor unrest... and in his cautious and unimaginative approach to economic depression. The unrest... did not spring from a radical movement directed against the established order... or the constitutional system. It grew out of conditions increasingly distressing... on the farms and in the factories.
Once again, not somebody who I see as underrated in the world at large. But the community in which he is well-known seems, once again, to have less overlap with it should with the community that reads here...
Must-Read: I don't know if I dare show this to Joachim Voth, lest he be thereby driven into shrill unholy madness, and have to abandon his cushy chair at Zürich for one at Miskatonic University in haunted Arkham, MA...
There were a great many people who firmly believed and there was a very widespread sentiment that it was very important to keep the profit motive out of or to limit its influence over the grain trade. See, for example:
And, of course:
The view that when the stakes become high--matters of life and death--then market solutions can no longer be justified by the claim that they maximize a weighted sum of individual utilities, because the weight they then place on some people's utilities is zero. That's a very powerful argument. People should not pretend it doesn't exist:
Megan McArdle: Health Care Is a Business, Not a Right:
People need a lot of things. You’ll die without food long before you’ll die without health care, and yet few people say we need to “take the profit motive out of farming”. There are some, to be sure, but this was never a widespread sentiment even when food was a lot scarcer and more expensive). Why is health care special?...
Must-Read: Patrick Wallis et al.: Puncturing the Malthus Delusion: Structural change in the British economy before the industrial revolution, 1500-1800:
Accounts of structural change in the pre-modern British economy vary substantially...
No Longer Fresh at Project Syndicate: A Brief History of (In)equality: Here we have a very nice set of slides http://tinyurl.com/dl20160725a. It comes from a talk in Lisbon given by Barry Eichengreen, my sixth-floor office neighbor here at the Berkeley Economics Department. The slides have one of the great virtues of economic history: We, unlike other economists, are allowed to at least gesture at and even glory at the complexities of a situation. We are not forced, as other economists are, into ruthless oversimplification in pursuit of conceptual clarity—to be followed by the intellectually-faulty imperialism overloading more of an explanation of the world on a simple model then it can rightfully bear. Read MOAR at Project Syndicate
"I now know it is a rising, not a setting, sun" --Benjamin Franklin, 1787