Interesting that Henry Fielding uses the phrase "King of Prussia" in 1749 in Tom Jones: the Kings in Prussia were not to claim the title King of Prussia until 1772. Indeed, the point of the Crown Treaty of 1700 was that the Prince-Elector of Brandenburg and Duke of Prussia Friedrich III Hohenzollern sought recognition that he was by the Treaty of Bromberg sovereign—i.e., not a vassal of the King of Poland—over those parts of Prussia he controlled, and definitely not freed from vassalage for his German-Imperial to the Emperor Leopold I Habsburg. "King of Prussia" introduces some ambiguity there. And in 1749 either Henry Fielding or Aunt Western is unaware of this distinction between "in" and "of", which was important enough for Leopold I Habsburg to have made it a red line in his negotiations with Friedrich III Hohenzollern to get the Margravate of Brandenburg's troops on his side in the War of the Spanish Succession:

Henry Fielding: The History of Tom Jones https://www.gutenberg.org/files/6593/6593-h/6593-h.htm#link2H_4_0003: '“Indeed, Miss Western,” cries the lady, “I shall not bear this usage; you have learnt of your father this manner of treating me; he hath taught you to give me the lie. He hath totally ruined you by this false system of education; and, please heaven, he shall have the comfort of its fruits; for once more I declare to you, that to-morrow morning I will carry you back. I will withdraw all my forces from the field, and remain henceforth, like the wise king of Prussia, in a state of perfect neutrality. You are both too wise to be regulated by my measures; so prepare yourself, for to-morrow morning you shall evacuate this house”...

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Benoît de Courson and Nicolas Baumard: Quantifying the Scientitic Revolution https://drive.google.com/file/d/14XXlDjyru9i05_SN3ybp-FGmbsZDhm5U/view: 'We leverage large datasets of individual biographies to build national estimates of scientific production during the early modern period.... Per capita estimates reveal striking differences across countries, with the two richest countries of the time (England and the United Provinces)... much more scientifically productive than the rest of Europe.... Scientific creativity is associated with other kinds of creative activities in philosophy, literature, music and the arts, suggesting a common underlying factor. Our results also challenge long-held hypotheses regarding the role of religion, universities, demography, and the printing press, and support the idea that economic development and rising living standards are key to explaining the rise of modern science...

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Very Briefly Noted 2019-12-06:

  1. Patrick Stewart: Galaxy Quest https://web.archive.org/web/20140113105956/http://www.bbc.co.uk/cult/st/interviews/stewart/page13.shtml: 'I had originally not wanted to see [Galaxy Quest] because I heard that it was making fun of Star Trek and then Jonathan Frakes rang me up and said "You must not miss this movie! See it on a Saturday night in a full theatre". And I did and of course I found it was brilliant. Brilliant. No one laughed louder or longer in the cinema than I did, but the idea that the ship was saved and all of our heroes in that movie were saved simply by the fact that there were fans who did understand the scientific principles on which the ship worked was absolutely wonderful. And it was both funny and also touching in that it paid tribute to the dedication of these fans...

  2. David Romer (2018): Economics 134: Macroeconomic Policy from the Great Depression to Today https://www.econ.berkeley.edu/sites/default/files/course-homepage/2018-01-14/syllabus/Economics%20134%20Syllabus.pdf...

  3. Wikipedia: The Return of Depression Economics and the Crisis of 2008 https://en.wikipedia.org/wiki/The_Return_of_Depression_Economics_and_the_Crisis_of_2008: 'Krugman suggests that policymakers "relearn the lessons our grandfathers were taught by the Great Depression" and prop up spending and enable broader access to credit...

  4. Youtube: Disney's Zorro https://www.youtube.com/watch?v=0icu-DbZr28&list=PL150C101BDB5788AE...

  5. George A. Akerlof (2019): What They Were Thinking Then: The Consequences for Macroeconomics during the Past 60 Years https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.33.4.171...

  6. Paul Krugman (2011): Mr. Keynes and the Moderns https://www.princeton.edu/~pkrugman/keynes_and_the_moderns.pdf...

  7. D. E. Moggridge and Susan Howso: Keynes on Monetary Policy, 1910-1946 https://www.jstor.org/stable/pdf/2662224.pdf?refreqid=excelsior%3A388ccc8f3ac7d38d097622a88e770b85...

  8. Moses Finley: The World of Odysseus https://delong.typepad.com/finleyodysseus.pdf...

  9. FRED: Four Components of Aggregate Demand https://fred.stlouisfed.org/graph/?graph_id=524363&rn=499...

  10. Timothy B. Lee: How Neural Networks Work—And Why They’ve Become A Big Business https://arstechnica.com/science/2019/12/how-neural-networks-work-and-why-theyve-become-a-big-business/: 'This is the first in a multi-part series on machine learning—in future weeks we'll take a closer look at the hardware powering machine learning, examine how neural networks have enabled the rise of deep fakes, and much more.... Making neural networks deeper didn't do much to improve performance if the training data set wasn't big. Conversely, expanding the size of the training set didn't improve performance very much for small neural networks. You needed both deep networks and large data sets—plus the vast computing power required to complete the training process in a reasonable amount of time—to see big performance gains. The AlexNet team was the first one to put all three elements together in one piece of software...

  11. FRED: Real Gross Private Domestic Investment/Real Potential Gross Domestic Product https://fred.stlouisfed.org/graph/?graph_id=516169&rn=403...

  12. Barry Naughton (2017): Is China Socialist? https://delong.typepad.com/files/naughton.pdf...

  13. Edward John Moreton Drax Plunkett Dunsany: Fifty-one Tales https://archive.org/details/fiftyonetales00dunsgoog/page/n4...

  14. King James Version: Ecclesiastes 9:11 https://www.biblegateway.com/passage/?search=Ecclesiastes+9%3A11&version=KJV: 'I returned, and saw under the sun, that the race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet riches to men of understanding, nor yet favour to men of skill; but time and chance happeneth to them all...

  15. Diego Velázquez: The Surrender of Breda https://en.wikipedia.org/wiki/The_Surrender_of_Breda...

  16. Wikipedia: Spanish Road https://en.wikipedia.org/wiki/Spanish_Road...

  17. Christopher Marlowe: The Jew of Malta https://www.gutenberg.org/files/901/901-h/901-h.htm...

  18. Friedrich Engels (1877) Anti-Duhring https://www.marxists.org/archive/marx/works/1877/anti-duhring/ch11.htm: 'Up to this point we have proceeded from the assumption that Herr Dühring's persistent habit of misquoting is done at least in good faith, and arises either from his total incapacity to understand things or from a habit of quoting from memory — a habit which seems to be peculiar to historical depiction in the grand style, but is usually described as slovenly. But we seem to have reached the point at which, even with Herr Dühring, quantity is transformed into quality...

  19. Michael Boskin &al. (2010): An Open Letter to Ben Bernanke https://economics21.org/html/open-letter-ben-bernanke-287.html: 'The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed's objective of promoting employment...

  20. *Tsinghua University *: School of Economics and Management http://www.sem.tsinghua.edu.cn/en/qianyy: 'Qian, Yingyi: Professor, Department of Economics; Distinguished Professor of Arts, Humanities and Social Sciences, Tsinghua University; The Fourth Dean (2006-18), School of Economics and Management, Tsinghua University...

  21. Robert Waldmann: Critique of the Golgotha Program https://delong.typepad.com/sdj/2009/07/robert-waldmann-has-an-interpretation-of-karl-marx-that-is-new-to-me.html...

  22. Barack Obama (January 27, 2010): Remarks by the President in State of the Union Address | whitehouse.gov https://obamawhitehouse.archives.gov/the-press-office/remarks-president-state-union-address: 'Remarks by the President in State of the Union Address...

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John Holbo: Ersatz Better Angels? http://crookedtimber.org/2019/12/04/ersatz-better-angels/: 'We tend to think of the relationship between ideal and non-ideal theory as aspirational and/or clarificatory. Ideal theory represents either 1) a distant point towards which you ought to move; 2) a pristine expression of your real values, unblemished by extraneous, pragmatic considerations. You could sort of roll 1) and 2) up together and say: ideal theory should be a polestar. A clear, fixed point by which you can steer somewhere better than where you are. But, in these Vavilovian/Steelwool cases... the point of dragging in ideal theory is, in effect, to footdrag, extenuate and obfuscate.... You are bad (see above), so pretending to be GOOD-good is hard. But you might be able to pull off semi-not-bad, from a middle-distance. So you invent a semi-not-bad aspirational self. Angel of my less-bad nature! But, really, this aspirational self is just there to provide plausible deniability. This ersatz angel lets you stay bad, rather than making you have to be even a little better...

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John Holbo: Vavilovian Philosophical Mimicry http://crookedtimber.org/2019/12/03/vavilovian-philosophical-mimicry/: 'Today I propose a new term in political theory. Vavilovian philosophical mimicry! It denotes a type of relation between ideal and non-ideal theories. It posits that the former evolves as protective concealment for the latter.... Weeds evolve, under selective pressure, to resemble crops.... Let’s take the white supremacy-libertarianism case.... You are proposing doing something that would keep African-Americans down. Why are you doing that? Because that’s what you want. But you can’t say that. But: you can plausibly pretend it’s a (merely temporarily uncomfortable) stage on the way to some sort of ideal libertarian night watchman end-state. The advantage of ideal theory is that it’s–well, not real. Yet. So it’s low commitment, in practical terms. Nominal commitment to some distant, ideally liberal end-state covers a variety of present, anti-liberal sins. So philosophical conservatism should be theorized in terms of the following four factors: 1) an element of aristocratic anti-liberalism (animus against the agency of the subordinate classes.) Cf. Robin. 2) an element of Vavilovian, pseudo-liberal mimicry. Anti-liberalisms that survive in a liberal environment will tend to look like each other because they are all, as it were, trying to look enough like liberalism to not get weeded out as too anti-liberal. But these resemblances, because they are protective mimicry, are actually misleading. At least superficial. 3) considerable liberal democratic DNA. It’s rare to run into a real, dyed-in-the-wool Joseph de Maistre-type. 4) 2 may result in 3, over time, via ‘fake it until you make it’, if you see what I mean...

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John Holbo: The Steelwool Scrub–A Fallacy http://crookedtimber.org/2019/05/07/the-steelwool-scrub-a-fallacy/: 'There’s a common "religious liberty" trope... an invalid variant on a Steelman-style argument.... The Steelwool Scrub is quite bad.... Take same-sex marriage (more recently, trans issues): you can always rustle up some Ryan T. Anderson-type to spin up some Thomistic-ish natural law (Christian anthropology etc.) argument. Even if this is weak ‘steel’ (I would judge), belated scholasticism, wandering the modern world, looks ornamental–harmless, innocent, unassuming. At worst, a curious mooncalf; at best, considerably more academically polished than old-school fag-bashing. Now comes the bait-and-switch (indulgence-by-proxy, steelman-to-absolve-all-sins.) If anyone now says ‘opposition to LGBTQ rights is bigotry and irrational animus’–the response comes quick. ‘Unfair! Will no one think of poor Ryan T. Anderson! Of his elaborate, perhaps failed yet earnestly-exposited, to-all-appearances sincere arguments! Is the world so unable to tolerate a little [insert squirrel gaze GIF] DIFFERENCE? Can all this be dismissed as mere, base homophobia! Mindless bigotry! Surely not! Surely, then, it is those who call it ‘bigotry’ who must be [squirrel GIF again] the REAL BIGOTS!’... Descriptively–sociologically–it’s absurd to steelman a socio-cultural order-or-group by conflating its practices and norms with unrepresentative, intellectual outliers. If you think the reason trans people struggle for respect, recognition, rights is that they are surrounded by well-meaning, rationally-convicted neo-Thomists, you’re nuts. Trans people struggle and suffer because they are members of a despised, oppressed minority group. SSM was a fight because gays face irrational animus, not a thicket of para-Aristotelian arguments. Spinning actually-existing bigotry as, ideally, the better angel of some natural law argument, is just a weird way to excuse what’s right there in front of you...

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Robert Barro appears unhappy that the economy possesses multiple expectational equilibria, and seeks for a model of inflation that does have this property. This is, frankly, a weird thing to do: models are supposed to represent the salient features of the world, not ignore them. And that economies often have multiple expectational equilibria and sometimes shift rapidly from one to another has been a live position now for... nearly two centuries, since John Stuart Mill and Jean-Baptiste Say analyzed the British financial crisis of 1825. And it was made hegemonic by... John Maynard Keynes more than 80 years ago in his General Theory. But unhappiness with a theory is not a reason to reject it: Robert J. Barro: Mysteries of Monetary Policy: "The puzzle is how the Fed can keep inflation steady at 1.5‑2% per year by relying on a policy tool that seems to have only weak and delayed effects.... [Perhaps] the credible threat of extreme responses from the Fed has meant that it does not actually have to repeat the Volcker-era policy.... Frankly, I am unhappy with this explanation. It is like saying that the inflation rate is subdued because it just is.... This suggests that the monetary policy behind today’s low and stable actual and expected inflation will keep working until, suddenly, it doesn’t. This makes me wish that I had a better understanding of monetary policy and inflation. It also makes me wish that the people responsible for monetary policy had a better understanding than I have. Many readers, no doubt, would say that my second wish has already been granted....

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This is absolutely fascinating. The rich in the American South are much poorer a generation after the Civil War then they had been before: sharecropping and Jim Crow are less effective at extracting wealth from African-Americans. But Phil Ager and company find no signs that those fractions of the elite who were direct slaveholders lost more than those members of the elite who were indirect slaveholders. I am going to have to think very hard about this: Philipp Ager, Leah Platt Boustan, and Katherine Eriksson: The Intergenerational Effects of a Large Wealth Shock: White Southerners After the Civil War: "The nullification of slave-based wealth after the US Civil War (1861-65) was one of the largest episodes of wealth compression in history. We document that white southern households with more slave assets lost substantially more wealth by 1870 relative to households with otherwise similar pre-War wealth levels. Yet, the sons of these slaveholders recovered in income and wealth proxies by 1880, in part by shifting into white collar positions and marrying into higher status families. Their pattern of recovery is most consistent with the importance of social networks in facilitating employment opportunities and access to credit...

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Plutarch: Life of Lysander http://penelope.uchicago.edu/Thayer/E/Roman/Texts/Plutarch/Lives/Lysander*.html: 'So then, after the Athenians had yielded in all points, Lysander sent for many flute-girls from the city, and assembled all those who were already in the camp, and then tore down the walls, and burned up the triremes, to the sound of the flute, while the allies crowned themselves with garlands and made merry together, counting that day as the beginning of their freedom. Then, without delay, he also made changes in the form of government, establishing thirty rulers in the city and ten in Piraeus. Further, he put a garrison into the acropolis, and made Callibius, a Spartan, its harmost. He it was who once lifted his staff to smite Autolycus, the athlete, whom Xenophon makes the chief character in his "Symposium"; and when Autolycus seized him by the legs and threw him down, Lysander did not side with Callibius in his vexation, but actually joined in censuring him, saying that he did not understand how to govern freemen. But the Thirty, to gratify Callibius, soon afterwards put Autolycus to death...

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Marx's Capital: Part VIII: Primitive Accumulation Proper

4.4) Part VIII: Primitive Accumulation: At the end of Part VII, Marx had completed his analysis of how the purpose of capitalism-as-a-system was simply capital accumulation, which produced ever more productivity, wealth, and misery, all three growing together, and all three growing together at an ever-increasing pace. The natural next step in Marx’s argument would be for him to lay out what he forecasts will bring this mad sorcerers-apprentice process to an end.

That, however is not what we get. We turn to the next page, and its title of “Part VIII: Primitive Accumulation” tells us that Marx is now jumping back to the historical beginnings of the process of capitalist capital accumulation.

He needed an editor.

Fortunately, this part is misnamed. “Primitive” accumulation is supposed to be about how the juggernaut of capitalism initially gets rolling. This part starts out being about that. But it then moves on, and is in its later stages also about much, much more.

4.4.1) “Primitive Accumulation” Proper: Part VIII does start out with its expressed topic. It hammers home the difference between the myth that the capitalist tell themselves and others, and the reality with which the system came into being. The myth is as follows, as Marx brings the snark:

Its origin is supposed to be.… In times long gone by there were two sorts of people; one, the diligent, intelligent, and, above all, frugal elite; the other, lazy rascals…. Thus it came to pass that the former sort accumulated wealth, and the latter sort had at last nothing to sell except their own skins. And from this original sin dates the poverty of the great majority that, despite all its labour, has up to now nothing to sell but itself, and the wealth of the few that increases constantly although they have long ceased to work. Such insipid childishness is every day preached to us in the defence of property…

The reality is very very different:

The process which creates the capital-relation can be nothing other than the process which divorces the worker from the ownership of the conditions of his own labour; it is a process which operates two transformations, whereby the social means of subsistence and production are turned into capital, and the immediate producers are turned into wage-labourers. So-called primitive accumulation, therefore, is nothing else than the historical process of divorcing the producer from the means of production. It appears as ‘primitive’ because it forms the pre-history of capital, and of the mode of production corresponding to capital…

And it is not just that history happened this way in some ethically neutral way. Great crimes were committed. And great was the role played by political corruption. Marx reviews British history starting in 1500, running from Henry VIII Tudor to William III Orange, and beyond:

The spoliation of the Church’s property, the fraudulent alienation of the state domains, the theft of the common lands, the usurpation of feudal and clan property and its transformation into modern private property under circumstances of ruthless terrorism, all these things were just so many idyllic methods of primitive accumulation. They conquered the field for capitalist agriculture, incorporated the soil into capital [a very interesting phrase], and created for the urban industries the necessary supplies of free and rightless proletarians…

The Glorious Revolution... brought into power, along with William of Orange, the landed and capitalist profit-grubbers. They inaugurated the new era by practising on a colossal scale the thefts of state lands which had hitherto been managed more modestly. These estates were given away, sold at ridiculous prices, or even annexed to private estates by direct seizure … The Crown lands thus fraudulently appropriated, together with the stolen Church estates, … form the basis of the present princely domains of the English oligarchy…

Employ the power of the state, the concentrated and organized force of society, to hasten, as in a hothouse, the process of transformation of the feudal mode of production into the capitalist mode, and to shorten the transition. Force is the midwife of every old society which is pregnant with a new one. It is itself an economic power…

Not just market buying-and-selling bring capitalism into being. Brutality and force are the “midwife” of every transformation from one kind of society to another—here the origins of society based on the capitalist mode of production born from the womb of the previous pattern of society based on the feudal mode of production:

Unleash[ing] the ‘eternal natural laws’ of the capitalist mode of production, to complete the process of separation between the workers and the conditions of their labour, to transform, at one pole, the social means of production and subsistence into capital, and at the opposite pole, the mass of the population into wage-labourers, into the free ‘labouring poor’, that artificial product of modern history.... [Feudalism] has to be annihilated; it is annihilated. Its annihilation, the transformation of the individualized and scattered means of production into socially concentrated means of production, the transformation, therefore, of the dwarf-like property of the many into the giant property of the few, and the expropriation of the great mass of the people from the soil, from the means of subsistence and from the instruments of labour, this terrible and arduously accomplished expropriation of the mass of the people forms the pre-history of capital…

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I have not yet gotten to Gabriel Zucman and Emmanuel Saez's The Triumph of Injustice, but Equitable Growth's Kate Bahn has: Kate Bahn: "'The Triumph of Injustice'... shows that the average tax rate is 28%, but for the very very rich, the tax rate is effectively 23%. https://twitter.com/LipstickEcon/status/1184477242765774848 This is due to the incomes of the richest not being subject to individual income taxes...

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Comment of the Day: Ray Vinmad: Ersatz Better Angels? http://crookedtimber.org/2019/12/04/ersatz-better-angels/: 'I love this more than I can say. I’m curious about the work done by the ‘Steelwool Scrub.’ There’s a related phenomenon where people believe that they aren’t scrubbing the beliefs so much as giving their origins. The idea is that there has to be some kind of bridge between a faith-based but bigoted belief schema and a liberal universalist belief schema–assuming that the faith-based-but-bigoted is really sort of due to the historical lag religious doctrine seems to force upon orthodox religious believers. (The less orthodox tend to catch up faster.) Eventually, the hope is that the religious doctrine and egalitarian principles will meet up once the believers cross over the bridge. You could call the religious origin stories of bigoted belief ‘believer breadcrumbs.’ Genealogies have a way of lessening the grip on people over time of certain belief systems. Or perhaps people doing this also aren’t working in good faith but are doing something more like ‘Steelman Airbag’ where they are creating a soft landing for the bigoted. We’re supposed to be less angry at their bigotry because these origins are mitigating factors. A problem of course is that a lot of people leading these orthodox believers see the bigotry as an attraction rather than a liability–and that’s likely true. There are surely some people who flock to orthodox belief systems because of the free steelwool...

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Worthy Reads from December 6, 2018

Worthy Reads from Equitable Growth:

  1. "Laboratories of Democracy". Heather Boushey attempts to make sense of the relative economic disaster that has been Kansas under governor Sam Brownback. It is turning out to be rather hard to find convincing channels through which Brownback's policies could plausibly and easily have had such disastrous relative effects on employment that we see suffered by the Kansas economy over the past eight years. I find myself wondering about whether it might have been the effect of Brownback's waging an aggressive rhetorical culture war against many in and many who might have moved to Kansas: telling lots of people in and out of Kansas that the governor and the power structure does not want people who think well of places like California and New York—would rather that they stayed in or moved to Colorado or Iowa or Missouri—is not something that is in our standard economic models. But perhaps it shoul be: Heather Boushey: Failed Tax-Cut Experiment in Kansas Should Guide National Leaders: “Sam Brownback’s failed “red state experiment” has truly come to an end.... In 2012 and 2013, Republican Gov. Sam Brownback signed into law the largest tax cuts in Kansas history. The top state income tax rate fell by nearly one-third and passthrough taxes that affected mainly relatively wealthy individuals were eliminated. With the decline in revenues came significant spending cuts...

  2. Another in what is now a large series of papers finding long-run impacts from state-run pre-kindergarten programs. Once again, it is difficult to attribute such large effects to the the standard channels. Yet effects of this size are likely to turn out to be robust, rather than due to chance variation or minor details of econometric specification. Thus we are likely to have to reach for more sociological explanations. They may, perhaps, involve huge peer and cultural effects—that policies did not just change the lives of those directly affected, but also changed hearts and minds in the broader community: Mariana Zerpa: Short and Medium Run Impacts of Preschool Education: Evidence from State Pre-K Programs: “I also provide a discussion of two local average treatment effects under different counterfactual child care arrangements. I find implied effects that are very large, although not very different from the estimates found in the literature on Head Start. This finding highlights the relevance of estimating intention- to-treat effects on the full affected cohorts of children, which do not rely on any assumptions regarding who are the affected children, and particularly on whether there are any externalities on children that do not attend the programs. The relevance of externalities and peer effects in early childhood experience is an open question that is part of a promising research agenda...

  3. As David Card once said to me when we were both standing side-by-side looking at the wall, there really is no empirical reason to justify economists' strong belief in the competitive model—in the law of one wage–for the labor market. Suresh Naidu appears to be reading every single paper by the about-to-be-newly-minted labor-economists-to-be. He is picking up those that challenge that assumption: Suresh Naidu: Imperfect Labor Markets Are a Hot Topic: “We are a long way from “concentration affects wages” and onto the much more precise “outside options affect wages” and it is awesome. Sydnee [Caldwell]... looks at variation in outside options given by hiring at firms that employ your ex-coworkers...

  4. In what sense is the Federal Reserve's decision-making currently “data dependent“? Equitable Growth exile Nick Bunker provides an excellent thumbnail assessment: The Federal Reserve is uncertain not about the state of the economy, but about what level of interest rates is most likely to keep economy near the sweet spot over the next five years: Nick Bunker: On the Federal Reserve: “Twitter: “To use the language of Clarida’s speech yesterday, Powell seems to be signaling they being data dependent by updating estimate of r-star, not the current health of economy...

  5. An excellent paper from Fukui, Nakamura, and Steinsso: How the American feminist revolution supported rapid business-cycle recoveries in rather 1970s and 1980s. Back then there was a huge reservoir of women who would take jobs but had not preciously held jobs only because of the lagging of social structure behind economic and cultural change. Thus increases in demand in recovery that were focused on this industrial reserve army could very easily and rapidly find good matches between unfilled jobs and unemployed workers: Masao Fukui, Emi Nakamura, and Jon Steinsson: Women, Wealth Effects, and Slow Recoveries: "A female-biased shock generating a 1% increase in female employment leads to only a 0.15% decline in male employment (and this estimate is statistically insignificant). In other words, our estimates imply very little crowding out of men by women in the labor market.... 70% of the slowdown in recent business cycle recoveries can be explained by female convergence...

 

Worthy Reads Elsewhere:

  1. Trump's policies are not boosting economic growth. So the Trumpists—paid, and those who hope to cash in—are preparing the battlespace by arguing that economic growth isn't a good thing anyway—just as we have shifted from "no collusion!" to "collusion isn't illegal!" To his honor, Michael Strain pushes back: Michael Strain: Right-Wing Populists Are Wrong About Economic Growth: "Oren Cass... the Manhattan Institute... argues that the results from decades of policies designed to encourage GDP growth are 'embarrassing' and have 'steered the nation off course'. Michael Anton... Claremont... questioning the presumption that technological and economic progress is desirable and that innovation is 'per se good.... [But] growth doesn’t just help low-income and working-class households in the short term. Over longer periods, seemingly small changes in the growth rate have large consequences.... A rising tide does not lift all boats equally, and it doesn’t lift them instantaneously. But over time, all boats do rise considerably...

  2. Very much worth reading: Henry Farrell and Bruce Schneier: Common-Knowledge Attacks on Democracy: "Democracies draw upon the disagreements within their population to solve problems.... In a well-functioning democracy, each such group vies for political influence by persuading voters that its way of understanding problems and associated solutions is the best one. This is to the democracy’s benefit. It provides a mechanism through which a polity can harness the diversity of perspectives within it, the better to solve complex problems. This requires contestation over who the rulers should be, and what broad social goals they will seek to implement. Political parties and other collective actors hope that they (or their allies) will be in control for a given period, and each vies against others to win public support to that end.... Autocracies adopt a very different approach to common and contested knowledge...

  3. Aline Bütikofer, Sissel Jensen, and Kjell G. Salvanes: The Role of Parenthood on the Gender Gap Among Top Earners: "A recent literature argues that a ‘motherhood penalty’ is a main contributor to the persistent gender wage gap in the upper part of the earnings distribution. Using Norwegian registry data, this column studies the effect of parenthood on the careers of high-achieving women relative to high-achieving men in a set of high-earning professions. It finds that the child earnings penalty is substantially larger for mothers with an MBA or law degree than for mothers with a STEM or medical degree...

  4. Sam Bell: "Curiosly, the Wall Street Journal editorial page no longer so enthusiastic about running down the balance sheet or hiking interest rates... and is suddenly interested in prime age epop... https://www.wsj.com/articles/the-feds-welcome-rethink-1543450104 #WelcomeToThePartyYouAreADecadeLate>...

  5. Nathaniel Rakich: What The Heck Is Happening In That North Carolina House Race?: "Affidavits... in which voters said that people came to their doors to collect their unsealed absentee ballots. One voter alleged that her ballot was incomplete at the time and that the collector said 'she would finish it herself'. Another claimed to have received an absentee ballot that she did not request.... Something unusual happened in absentee-by-mail voting in Bladen County.... In six of the district’s eight counties, fewer than 3 percent of total votes were absentee-by-mail ballots. But in Bladen County, that number was 7.3.... Absentee-by-mail ballots tended to be much better for McCready than other ballots—except in Bladen County... [where] absentee-by-mail ballots were more Republican-leaning than the rest of Bladen’s votes by 8 percentage points. But if we look at the whole district, absentee-by-mail ballots were 24 points more Democratic-leaning...

  6. Antonio Fatas: Global Rebalancing: "Prior to the Global Financial Crisis the world economy experienced a period of increasing global imbalances.... Today the world displays smaller imbalances than at the peak of 2008 but what it was more interesting is the extent to which rebalancing had happened between different country groups...

  7. Barry Ritholtz: How to Use Behavioral Finance in Asset Management, Part I: "Annual Mea Culpas: I learned this from Ray Dalio about a decade ago: every year I make a list of what I got wrong and what I learned from the experience.... Acknowledging your mistakes...

  8. Andreas Beerli, Jan Ruffner, Michael Siegenthaler, and Giovanni Peri: The Abolition of Immigration Restrictions and the Performance of Firms and Workers: Evidence from Switzerland: "We study a reform that granted European cross-border workers free access to the Swiss labor market.... Regions close to the border were affected more intensely and earlier. The greater availability of cross-border workers increased their employment but also wages and possibly employment of highly educated native workers although the new cross-border workers were also highly educated... the reform increased the size, productivity, innovation performance of some incumbent firms, attracted new firms, and created opportunities for natives to pursue managerial jobs...

  9. Tom Nichols: "Counter-Intuitive Though It May Seem, Trump winning was a political disaster for the white working class, especially older whites. They were once pandered to in elections; now it's no longer possible to indulge the pretense that their concerns are economic-or fixable. That's because there's no ground for a policy fix or a compromise with people whose basic position is that they want America to be white, sorta Christian, and frozen in 1963-except with 2018's drugs, sexual liberty, government transfer payments, ESPN channels, and internet porn...

  10. Ramesh Ponnuru: Recession Is a Far Larger Threat Than Inflation: "We should use this moment of relative monetary calm to consider deeper questions, such as whether that target is the right one.... The real failing of the current monetary regime is not that it generates too much inflation. We haven’t had ruinous levels of inflation since the early 1980s (something for which Volcker’s own chairmanship deserves great credit)...

  11. Niskanen Center (December 11, 2018): Starting Over: The Center-Right After Trump: "Donald Trump has had a hurricane-like effect on the Republican Party. The 2018 midterm elections have forced center-right Americans to reconsider their relationship to the Trump-driven conservative populism that has come to dominate the GOP. The Niskanen Center will present an important public analysis of this new political reality...

  12. Olivier Blanchard: The French "Yellow Vest" Movement and the (Current) Failure of Representative Democracy: "Go back to the end of communism and the failure of central planning as an alternative to the market economy.... With the end of communism, it became clear that there was no alternative, only a muddle between market intervention and free markets. So long as growth was strong, and all boats were indeed lifted, the problem was manageable. Then growth slowed down, and inequality and insecurity became more salient...

  13. Lina Glick: "Excellent new paper by economist Mark Glick arguing that the consumer welfare standard has "unduly circumscribed how advances in our understanding of the economy can be translated into competition policy https://www.scribd.com/document/392624312/The-Unsound-Theory-Behind-the-Consumer-and-Total-Welfare-Goal-in-Antitrust...

  14. Noah Smith: Trump's Embrace of Tariffs Hurts U.S. Consumers More Than China: "Trump’s goal of making the U.S. more competitive isn’t bad, but he needs to stop using bad tools. Tariffs... raise costs for American manufacturers and prices for American consumers. Tariff Man needs to cool his jets...

  15. Paul Krugman (January 26, 2010): Obama Liquidates Himself: "A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback? It’s appalling on every level... bad economics, depressing demand when the economy is still suffering from mass unemployment... bad long-run fiscal policy... a betrayal of everything Obama’s supporters thought they were working for. Just like that, Obama has embraced and validated the Republican world-view.... This looks like pure disaster...


#noted #weblogs #2018-12-06

Marx's Capital: The Capitalist System Worsens Over Time

4.3.3) The Capitalist System Worsens Over Time: Remember, always, to Marx, capitalism is a system. It works, in the sense that it carries itself forward into the future:

Therefore, the worker himself constantly produces objective wealth, in the form of capital, an alien power that dominates and exploits him; and the capitalist just as constantly produces labour-power, in the form of a subjective source of wealth which is abstract, exists merely in the physical body of the worker, and is separated from its own means of objectification and realization; in short, the capitalist produces the worker as a wage-labourer. This incessant reproduction, this perpetuation of the worker, is the absolutely necessary condition for capitalist production…. The capitalist process of production, therefore, seen as a total, connected process, i.e. a process of reproduction, produces not only commodities, not only surplus-value, but it also produces and reproduces the capital-relation itself; on the one hand the capitalist, on the other the wage-labourer...

As the system carries itself forward into the future, it changes. It, Marx argues, becomes even worse and more destructive. The gap between what society could be given the magical productivity of human labor augmented by science and technology and what society is grows beyond measure.

Accumulation of capital leads to innovation and the invention of new kinds of more productive machines. The capital intensity of production rises. And as the capital intensity of production rises, downward pressure on workers’ wages rises as well.

Marx thinks he has an airtight argument that this will be so:

Since the demand for labour is determined not by the extent of the total capital but by its variable constituent alone, that demand falls progressively with the growth of the total capital, instead of rising in proportion to it, as was previously assumed. It falls relatively to the magnitude of the total capital, and at an accelerated rate, as this magnitude increases. With the growth of the total capital, its variable constituent, the labour incorporated in it, does admittedly increase, but in a constantly diminishing proportion... constantly produces, and produces indeed in direct relation with its own energy and extent, a relatively redundant working population, i.e. a population which is superfluous to capital’s average requirements for its own valorization, and is therefore a surplus population…

Marx believes that machinery is not a complement to but a substitute for labor. Here, once again, Marx has been betrayed by the labor theory of value. The century and a half after his writing of Capital has seen wages rise fifteen fold. It has seen inequality rise, fall, and more recently rise again. But even now, at our current inequality peak, it is only back to the level it was in mid-nineteenth century Britain here in the United States, and is lower elsewhere in the global north.

Not a Human Logic, But Its Own Mad Logic: Why does the system work as it carries itself into the future—as it “reproduces itself”, as Marx likes to say? The rapid advances of science and technology on the one hand in the scope of the collective social division of labor mediated by the market on the other greatly increase the productive power of humanity. Why are these increased productive powers turned not to the greater good but to making greater evils? Marx has an answer: His answer is that the wishes and wills of humans have no purchase once the capitalist machine has started rolling. People must fit into their slots, and do what their slot in the system requires that they do. Workers who do not sacrifice their essential humanity to a hard, dehumanizing, and low-paying job find themselves and their families at deaths door. Capitalists who do not devote every moment to raising productivity, pushing down wages, and reinvesting their larger profits to increase their scale of operations faster find themselves outcompeted. They wind up going bankrupt–and then their children join the working class proletariat. Thus, according to the principle that the purpose of a system is what it does, the purpose of the capitalist system is maximum investment and capital accumulation:

Accumulation for the sake of accumulation, production for the sake of production: this was the formula in which classical economics expressed the historical mission of the bourgeoisie in the period of its domination. Not for one instant did it deceive itself over the nature of wealth’s birth-pangs. But what use is it to lament a historical necessity? If, in the eyes of classical economics, the proletarian is merely a machine for the production of surplus-value, the capitalist too is merely a machine for the transformation of this surplus-value into surplus capital…

Mark thinks he has an iron and water-tight argument that this process of investment in capital accumulation greatly raises the stock of instruments of production that workers use—no, in capitalist factories as Marx sees them workers do not utilize machines, instead, machines use up workers—while reducing the funds available to be spent paying the wages of the workers:

The law of the progressive growth of the constant part of capital in comparison with the variable part is confirmed at every step … by the comparative analysis of the prices of commodities, whether we compare different economic epochs or different nations in the same epoch. The relative magnitude of the part of the price which represents the value of the means of production, or the constant part of the capital, is in direct proportion to the progress of accumulation, whereas the relative magnitude of the other part of the price, which represents the variable part of the capital, or the payment made for labour, is in inverse proportion to the progress of accumulation…

Thus, for Marx, it is inconceivable that there might be a permanent, durable increase in the average wage level as the process of capital accumulation proceeds and as capitalism-the-sytem carries itself forward into the future. Supply-and-demand could not, and marks his analysis, lead to such an outcome, for supply-and-demand work in the context of a ever-growing surplus population that makes up an industrial reserve army of unemployed and hungry-for-jobs workers:

The industrial reserve army, during the periods of stagnation and average prosperity, weighs down the active army of workers; during the periods of over-production and feverish activity, it puts a curb on their pretensions. The relative surplus population is therefore the background against which the law of the demand and supply of labour does its work. It confines the field of action of this law to the limits absolutely convenient to capital’s drive to exploit and dominate the workers…

In fact, for Marx, it is inconceivable the average wage level will manage to stay above bare subsistence:

The most diverse machines are now applied to the manufacture of the machines themselves…. The labourers employed in machine factories can but play the role of very stupid machines alongside of the highly ingenious machines…. To sum up: the more productive capital grows, the more it extends the division of labour and the application of machinery; the more the division of labour and the application of machinery extend, the more does competition extend among the workers, the more do their wages shrink together…. A mass of small business men and of people living upon the interest of their capitals is precipitated into the ranks of the working class…. Thus the forest of outstretched arms, begging for work, grows ever thicker, while the arms themselves grow every leaner…

Thus, as Mark sees it, the more powerful and productive new workers become, the more dominated and exploited workers become. :Workers become not men but fragments of men: hands, no more than appendages to the machine. And working to make things becomes not a source of joy at accomplishment but into an alienated torment:

We saw in Part IV, when analysing the production of relative surplus-value, that within the capitalist system all methods for raising the social productivity of labour are put into effect at the cost of the individual worker; that all means for the development of production undergo a dialectical inversion so that they become means of domination and exploitation of the producers; they distort the worker into a fragment of a man, they degrade him to the level of an appendage of a machine, they destroy the actual content of his labour by turning it into a torment; they alienate…

In Marx’s analytical framework, wealth, productivity, and misery all grow together. Greater productivity produces greater wealth. And then greater wealth produces greater misery, because under capitalism wealth is used to dominate and, if the capitalist is going to survive, he must use his power to dominate to push down wages and worsen working conditions so that he can not consume but invest his profits to produce an even greater scale of production and even greater productivity:

In proportion as capital accumulates, the situation of the worker, be his payment high or low, must grow worse. Finally, the law which always holds the relative surplus population or industrial reserve army in equilibrium with the extent and energy of accumulation rivets the worker to capital more firmly than the wedges of Hephaestus held Prometheus to the rock. It makes an accumulation of misery a necessary condition, corresponding to the accumulation of wealth. Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, the torment of labour, slavery, ignorance, brutalization and moral degradation at the opposite pole, i.e. on the side of the class that produces its own product as capital...

What is going to bring an end to this mad process?

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Five years ago our steering committee member here at Equitable Growth Janet Yellen gave a very good talk on building blocks of opportunity in America: Janet Yellen: Perspectives on Inequality and Opportunity from the Survey of Consumer Finances https://www.federalreserve.gov/newsevents/speech/yellen20141017a.htm: "[I] identify and discuss four sources of economic opportunity in America--think of them as "building blocks" for the gains in income and wealth that most Americans hope are within reach of those who strive for them. The first two are widely recognized as important sources of opportunity: resources available for children and affordable higher education. The second two may come as more of a surprise: business ownership and inheritances. Like most sources of wealth, family ownership of businesses and inheritances are concentrated among households at the top of the distribution. But both of these are less concentrated and more broadly distributed than other forms of wealth, and there is some basis for thinking that they may also play a role in providing economic opportunities to a considerable number of families below the top...

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There are many proposals to revamp education in economics, and to get economists to their right place in the public sphere—whatever that "right place" might turn out to be. The highly estimable Martin Wolf is here on the side of those who think that economics ought to focus on basic principles, arresting stories, and big data as a way of figuring out which store are in fact representative of broader trends. He is critic of over-mathematization and, more so, of over-theorization—I, at least, am reminded of Larry Meyer's take on Robert Lucas's brand of economics: "In our firm, we always thanked Robert Lucas for giving us a virtual monopoly. Because of Lucas and others, for two decades no graduate students are trained who were capable of competing with us by building econometric models that had a hope of explaining short-run output and price dynamics. [Academic economics Ph.D. programs] educated a lot of macroeconomists who were trained to do only two things--teach macroeconomics to graduate students, and publish in the journals...":

Martin Wolf: Expertise: "Michael Gove was wrong, in my view, about expertise applied in the Brexit debate. But he was not altogether wrong about the expertise of economists. If we were more humble and more honest, we might be better recognized as experts able to contribute to public debate.... At bottom, economics is a field of inquiry and a way of thinking. Among its valuable core concepts are: opportunity cost, marginal cost, rent, sunk costs, externalities, and effective demand. Economics also allows people to make at least some sense of debates on growth, taxation, monetary policy, economic development, inequality, and so forth. It is unnecessary to possess a vast technical apparatus to understand these ideas. Indeed the technical apparatus can get in the way.... The teaching of economics to undergraduates must focus on core ideas, essential questions, and actual realities. Such a curriculum might not be the best way to produce candidates for PhD programs. So be it. The study of economics at university must not be seen through so narrow a lens. Its purpose is to produce people with a broad economic enlightenment. That is what the public debate needs. It is what education has to provide...

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Joseph Stiglitz, Martine Durand, and Jean-Paul Fitoussi: Who Are You Going to Believe, Me or the Evidence of Your Own Eyes?: "We need to develop datasets and tools to examine the factors that determine what matters for people and the places in which they live. Having the right set of indicators, and anchoring them in policy, will help close the gap between experts and ordinary people that are at the root of today’s political crisis.... The Stiglitz-Sen-Fitoussi Commission... final report was published in 2009.... The production of goods and services in the market economy–something which GDP does try to capture–is of course a major influence, but even in the limited domain of the market, GDP doesn’t reflect much that is important.  The most used economic indicators concentrate on averages, and give little or no information on well-being at a more detailed level, for instance how income is distributed.... Economic insecurity today is only one of the risks individuals face.... The Group considered how to better measure the resources needed to ensure economic, environmental and social sustainability...

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Liz Hipple: Public Policy Implications of the Millennial Wealth Gap https://equitablegrowth.org/public-policy-implications-of-the-millennial-wealth-gap/: 'Wealth may shape the behavioral choices of the next generation, thereby shaping opportunity by providing some with a soft cushion for a slip down the economic ladder and others with no cushion at all.... The ability to live with one’s parents allows young people to search longer for jobs that have better prospects for future earnings growth, increasing their chances of upward mobility and of successfully beginning to build wealth of their own. Another roadblock to Millennials’ ability to fully deploy their human potential is the structural changes in the labor market over the past 30 years, which have depressed wages and thereby delayed wealth building. For example, young adults who replicate their parents’ educational and occupational backgrounds and end up in the same type of work and in the same relative place in the economic distribution earn less in inflation-adjusted terms than their parents did a generation ago...

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Worthy Reads from November 29, 2018

Worthy Reads from Equitable Growth:

  1. An excellent paper: On the key role of the minimum-wage extensions of the 1960s in reducing inequality, and doing so along a pronounced racial as well as class dimension, as a result of the racial skew of employment categories. It was not just that African-Americans were in predominately low-wage jobs, but that the categories of jobs they were in had previously been exempt from the minimum-wage. From two of our Equitable Growth grant recipients: Claire Montialoux and Ellora Derenoncourt: Minimum Wages and Racial Inequality: “The earnings difference between black and white workers fell dramatically in the United States in the late 1960s and early 1970s... the extension of the minimum wage played a critical role...

  2. American do want inheritances to be taxed. They are much more ambivalent about taxing savings—perhaps because savings are seen as uniquely virtuous sources of income. A working paper that Equitable Growth issued last year, but that did not get the attention and resonance that I think it deserves: Raymond Fisma, Keith Gladstone, Ilyana Kuziemko, and Suresh Naidu (2017): Do Americans Want to Tax Capital? Evidence from Online Surveys: "Via a survey on Amazon’s Mechanical Turk... provide subjects with a set of hypothetical individuals’ incomes and wealth and elicit subjects’ preferred (absolute) tax billl... unobtrusively map[ping] both income earned and accumulated wealth into desired tax levels. Our regression results yield roughly linear desired tax rates on income of about 14 percent... positive desired wealth taxation... three percent when the source of wealth is inheritance, far higher than the 0.8 percent rate when wealth is from savings...

  3. Another of our Equitable Growth working papers from last year that, I think, did not get the exposure in notice it deserved. Even though the unemployment rate is gratifyingly low and even the employment the population ratio is not that distressingly port right now, it is still the case that the Great Recession of 2008 2010 cast a huge shadow, reducing the economy ' potential output. We can still see its affects today, and they are powerful. And we cannot confidently look forward to a time when does affect will have dissipated. The failure to make rapid employment recovery job one in 2009-2010 was a catastrophe. Danny Yagan (2017): Employment Hysteresis from The Great Recession: “This paper uses U.S. local areas as a laboratory to test whether the Great Recession depressed 2015 employment... exposure to a 1-percentage-point-larger 2007-2009 local unemployment shock caused working-age individuals to be 0.4 percentage points less likely to be employed at all in 2015, likely via labor force exit. These shocks also increased 2015 income inequality...

  4. Another piece from the past that, I think, did not get the notice and exposure it deserved. Equitable Growth's Jesse Rothstein with a different interpretation than Chetty et al. of the great American sociological deserts out of which upward mobility is nearly unthinkable. Chetty et al. focus on school—perhaps because pouring at resources into schools is something we can do and would in all likelihood be somewhat effective. But how effective? Our schools the key link, or just one of many factors? Jesse Rothstein believes the second, and I think he is right: Jesse Rothstein (2017): Inequality of Educational Ppportunity? Schools as Mediators of the Intergenerational Transmission of Income: “I use data from several national surveys to investigate whether children’s educational outcomes (educational attainment, test scores, and non-cognitive skills) mediate the relationship between parental and child income.... There is... little evidence that differences in the quality of K-12 schooling are a key mechanism driving variation in intergenerational mobility...

  5. And another piece from grant recipient Ellora Derenoncourt. This is, I think, the best piece I have read in the past week. It is also the most horrifyingly depressing case I have read in the past week. Derenoncourt'a thesis is that the Great Migration of African-Americans from the south to the urban north set in motion political-economic and sociological changes in local power structures that made those migration destinations poor places, and dangerous places, to raise young black men: Ellora Derenoncourt: Can You Move to Opportunity? Evidence from the Great Migration: “The northern United States long served as a land of opportunity for black Americans, but today the region’s racial gap in intergenerational mobility rivals that of the South. I show that racial composition changes during the peak of the Great Migration (1940-1970) reduced upward mobility in northern cities in the long run, with the largest effects on black men...

 

Worthy Reads Elsewhere:

  1. I do not understand why there are people claiming US economy is at full employment. Full employment is defined as that level at which nominal and real wage growth visibly accelerates. They have not yet started to do so. Maybe the US economy will be at full employment next year. But the real and nominal wage series would look different if the US economy were at full employment right now: Ernie Tedeschi: Unemployment Looks Like 2000 Again. But Wage Growth Doesn’t: “Trying to solve an economic mystery: This is, to put it mildly, a mystery. If workers are as scarce as the unemployment rate and many other measures suggest, employers should be raising wages to compete for them...

  2. Like wood fires and nuclear fusion, ideology is a very bad master. But also, like wood fire in nuclear fusion, it is a most excellent servant. Therefore I cannot sign-on for Jerry Taylor‘s decision to abandon “ideology“. The task, I think, is to make ideologies useful by making them self reflective. After all, if a libertarian founder like John Stuart Mill can say that Positive Liberty is essential—that the British working class of his day was "imprisoned" in spite of all their negative liberty by Malthusian poverty, there is ample space for a libertarianism that keeps its good focus on human choice, potential, and opportunity without blinding itselftop a grear deal of reality: Jerry Taylor: The Alternative to Ideology: “When we launched the Niskanen Center in January 2015, we happily identified ourselves as libertarians... heterodox libertarians... left-libertarianism concerned with social justice (a libertarian perspective that I’ve defended in debates with more orthodox libertarians here and here)...

  3. And another piece from the Niskanen Center. Brink Lindsey on the importance of the vote: Brink Lindsey: "Another election, another round of libertarians' dumping on the right to vote. I used to just find this inane and self-defeating, but now I think it's bad citizenship and affirmatively harmful...

  4. The world is becoming richer, and dire poverty is becoming rarer, but is the world becoming more equal? Smart thoughts from Houston: Dietz Vollrath: New Evidence on Convergence: "Dev Patel, Justin Sandefur, and Arvind Subramanian posted the other day some new evidence on cross-country convergence... poor countries grow faster than rich ones, on average...

  5. America in the 1980s and 1990s suffered from a crime wave, yes, but it was primarily a concentrated urban crime wave. Thus I think that even back then racial fear ought to have been a harder sell to the American electorate than it was: Paul Krugman (November 1, 2018): A Party Defined by Its Lies: "Selling racial fear was easier in the 1980s and early 1990s, when America really was suffering from high levels of inner-city crime. Since then, violent crime has plunged. What’s a fearmonger to do? The answer is: lie. The lies have come nonstop since Trump’s inauguration address, which conveyed a false vision of 'American carnage'...

  6. Is it correct to view the symbolic right-wing success that was the passage of Proposition 187 in 1994 as the key link in the decline of the California Republican Party? Perhaps: Jane Coaston: How California Conservatives Became the Intellectual Engine of Trumpism: "The California GOP got wiped out in the midterms. But the heart of California-style conservatism is stronger than ever.... 'They keep coming': The story of conservative fears over demographic change in California began long before Trump. Take Proposition 187, a ballot initiative passed by voters in November 1994 that would have cut off undocumented Californians from public education and health care services and require teachers and health care providers to turn over the names of undocumented people to authorities (it was known as the “Save Our State” initiative), and to efforts to end bilingual education and establish “three strikes” laws. (A court ultimately found the initiative un-Constitutional.)...

  7. A piece heading more over into political sociology than I am comfortable assessing, but I trust Sandy Darity as a very thoughtful economist: Sandy Darity (2016): The Latino Flight to Whiteness: "Hispanics collectively are unlikely to share common cause with Black Americans over a common racial identity.... If a coalition ever forms... it will not be on the basis of linked fate or fictive kinship anchored on race..

  8. The argument that things like the Donald Trump administration are freak events rooted in American pecularities runs up against the problem that similar things are happening in Teresa May's administration in Britain: Rafael Behr: The Brexit wreckers Are Slinking Away from the Rancid Mess They’ve Made: "Dominic Raab and Esther McVey have resigned because they know Brexit is intrinsically dysfunctional.... There is now no Brexit true believer prepared to take an author’s credit on the deal that is about to come before parliament.... The whole leave prospectus... was a fantasy.... It is easier to be on the team that accuses the prime minister of failing to deliver majestic herds of unicorns than it is to be stuck with a portfolio that requires expertise in unicorn-breeding...

  9. I would find the wise and public-spirited Ricardo Haussmann more convincing here if he'd had an explanation for why mandated wage compression by John Dunlop in the U.S. during World War II was not a huge success: Ricardo Hausmann: How Not to Fight Income Inequality: "Trying to combat income inequality through mandated wage compression is not just an odd preference. It is a mistake, as Mexico's president-elect, Andrés Manuel López Obrador, will find out in a few years, after much damage has been done...

  10. I have never understood this argument—that raising and then lowering interest rate does more good to fight recession than does not raising them in the first place. And—to my knowledge—there is no underlying model behind it at all. What is the mechanism by which raising interest rates now so you can lower them later beats keeping interest rates the same now and then lowering them later if both ultimately wind up at the same place?: Martin Feldstein: Raise Rates Today to Fight a Recession Tomorrow: "As I have argued in these pages since 2013, the Fed should have begun raising the fed-funds rate several years earlier. Doing so would have prevented the recent sharp increases in the prices of equities and other assets, which will collapse when long-term interest rates rise...


Why invite people onto the TV just so that they can tell lies? I do not understand American journalism today: Zachary Basu: Trump Trade Adviser Peter Navarro: Tariffs Aren't Hurting Anyone in the U.S.: "White House trade adviser Peter Navarro said on CNN's 'State of the Union' Sunday that tariffs on Chinese goods are not hurting consumers in the United States, despite reports to the contrary from researchers at Harvard, the University of Chicago, the International Monetary Fund, the Federal Reserve of Boston and more...

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I confess that I have never understood why Bayesian statisticians would ever report just a single set of "results". One of the key insights of the Reverend Thomas Bayes was that the data gives you a map between what you thought before and what you should think now. Thus I would think that the Bayesian tradition would be to report this map—not just what the posterior mean is for one set of prior beliefs, but other things as well, like how different your prior beliefs would have to have been in order to support a posterior mean that hits some target for economic significance, and so forth. But they do not:

Andrew Gelman: Here’s an Idea for Not Getting Tripped Up with Default Priors: "Here’s an idea for not getting tripped up with default priors: For each parameter (or other qoi), compare the posterior sd to the prior sd. If the posterior sd for any parameter (or qoi) is more than 0.1 times the prior sd, then print out a note: “The prior distribution for this parameter is informative.” Then the user can go back and check that the default prior makes sense for this particular example...

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UC Hastings Professor, Academic Leaders Call for Support of AB5: "A letter calling on the U.S. Senate to support AB5, a law that would force the gig economy giants like Uber and Lyft to classify its workers as employees instead of independent contractors.... 'We write as academics (including law professors, labor economists, political scientists, sociologists, and historians) from across the country who have studied the intersections of law, regulation, misclassification, the platform economy, and/or precarious work. As a legal matter, we unequivocally support the California Supreme Court’s decision in Dynamex v. Superior Court of Los Angeles (2018) and AB5, the legislative effort to make employee-status the default under state law and to codify the ABC test…We oppose attempts to carve gig workers out', the letter reads...

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Note to Self: Property rights. Doug North made a career out of talking about how parliamentary government and independent courts established secure property rights in Britain, and arbitrary royal government and dependent intendents created insecure property rights in France, hence the English economy boomed while the French economy stagnated in the century and a half before the coming of the Industrial Revolution.

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