## June 2007

Paul Krugman writes about the link between expanding trade--especially between the U.S. and China--and rising income and wealth inequality within the United States. I find myself skeptical. Yes, China is exporting a lot of goods that it produces using low-skill labor. But if those goods were to be produced here in the United States, they would be produced with higher-skil labor and with lots of capital. The key question is how has the shift in economic activity created by expanding trade affected the demand for different kinds of labor and capital here in the United States. We have had:

• A shrinkage in export and import-competing manufacturing.
• A tremendous expansion in construction.
• An expansion in consumer services.

I don't see how those shifts significantly reduce the demand for factor of production "labor" and enhance the demand for factor of production "capital." Construction employs lots of capital--but so does tradeable manufacturing. I want to see Leontief input-output matrices for the U.S. before I upweight trade and downweight education, collapsing unions, migration, changing norms, monetary policy, and other factors as more likely to be responsible for the lion's share of the increase in U.S. inequality over the past generation and a half.

And "outsourcing": outsourcing seems at least as likely to me to equalize the U.S. income distribution as to give it a further inequality boost. Consider what kinds of jobs are likely to be outsourced.

But here's Paul Krugman:

Trade and inequality, revisited | vox (beta) - Research-based policy analysis and commentary from Europe's leading economists: It’s no longer safe to assert that trade’s impact on the income distribution in wealthy countries is fairly minor. There’s a good case that it is big, and getting bigger. I’m not endorsing protectionism, but free-traders need better answers to the anxieties of globalisation’s losers.

During the 1980s and 1990s, there was considerable concern about the possible role of globalisation in contributing to rising income inequality, especially in the United States. This concern was based on standard economic theory: since the 1941 Stolper-Samuelson paper, we’ve known that growing trade can have large effects on income distribution, and can easily leave broad groups, such as less-skilled workers, worse off.

After economists looked hard at the numbers, however, the consensus was that the effect of trade on inequality was probably modest. Recently, Ben Bernanke cited these results – but he recognised a problem: “Unfortunately, much of the available empirical research on the influence of trade on earnings inequality dates from the 1980s and 1990s and thus does not address later developments. Whether studies of the more recent period will reveal effects of trade on the distribution of earnings that differ from those observed earlier is to some degree an open question.”

But the question isn’t really that open. It’s clear that applying the same models to current data that, for example, led William Cline of the Peterson Institute to conclude in 1997 that trade was responsible for a 6% widening in the college-high school gap would lead to a much larger estimate today. Furthermore, some of the considerations that once seemed to set limits on the possible inequality-promoting effects of trade now seem much less constraining.

There are really two key points here: the rise of China, and the growing fragmentation of production. First, thanks to the rise of China, OECD imports of manufactured goods from developing countries have continued to rise rapidly since the early 1990s. Cline’s estimate of income distribution effects was based on data from 1993, when US imports of manufactures from developing countries were approximately 2% of GDP; now that number is close to 5%, and rising rapidly.

At the same time, the rise of China has prevented, for the time being, a development that I and others expected to mitigate the effects of trade on income distribution: up-skilling by the developing country exporters. “As newly industrializing countries grow,” I wrote in 1995, “their comparative advantage may shift away from products of very low skill intensity.” And that’s exactly what happened – for the countries that were the major exporters of manufactured goods to the OECD then. As John Romalis has shown, the exports of the original group of Asian newly-industrialising economies have shifted dramatically away from labour-intensive toward skill-intensive products.

But along has come China, which is far more labour-abundant now than the NIEs were then. A simple indicator is relative wage rates: in 1990, according to the US Bureau of Labor Statistics, the original four Asian NIEs had hourly compensation costs that were 25% of the US level. Now the BLS estimates that China’s labour costs are only 3% of US levels.

In 1995 I also believed that the effects of trade on inequality would eventually hit a limit, because at a certain point advanced economies would run out of labour-intensive industries to lose – more formally, that we’d reach a point of complete specialisation, beyond which further growth in trade would have no further effects on wages. What has happened instead is that the limit keeps being pushed out, as trade creates “new” labour-intensive industries through the fragmentation of production.

For example, the manufacture of microprocessors for personal computers is clearly a highly sensitive, skill-intensive process. Intel’s microprocessor production, however, now takes place in two stages: the “fabs,” which print the circuits on disks of silicon, are all located in high-wage advanced countries, but the assembly and testing, in which those disks are cut into individual chips and tested to be sure that they work, is conducted in China, Malaysia, and the Philippines.

Outsourcing of services, in both directions, adds to the possibilities of unequalising trade. The skill-intensive pieces of production processes that mainly take place in the third world are often now located in the OECD – for example, Lenovo, the Chinese computer company, has its executive headquarters in North Carolina.

What all this comes down to is that it’s no longer safe to assert, as we could a dozen years ago, that the effects of trade on income distribution in wealthy countries are fairly minor. There’s now a good case that they are quite big, and getting bigger.

This doesn’t mean that I’m endorsing protectionism. It does mean that free-traders need better answers to the anxieties of those who are likely to end up on the losing side from globalisation.

## Impeach George W. Bush Now

Scott Horton:

"Defending Enhanced Interrogation Techniques": Before there were “enhanced interrogation techniques,” there was verschärfte Vernehmung, (which means “enhanced interrogation techniques”) developed by the Gestapo and the Sicherheitsdienst in 1937 and subject to a series of stringent rules. Now, as we have seen previously, there were extremely important differences between the Gestapo’s interrogation rules and those approved by the Bush Administration. That’s right-—the Bush Administration rules are generally more severe, and include a number of practices that the Gestapo expressly forbade.

Today Andrew Sullivan takes a look at the criminal prosecutions that followed the war in which Gestapo officers who used enhanced interrogation techniques were prosecuted for war crimes as a result. What arguments did they advance? Well, Dick Cheney and Rudy Giuliani will be pleased to know that they haven’t missed any major points.

the ticking time-bomb exception, and the need for better intelligence about an insurgency-—the same defense as the GOP establishment has used for exactly the same techniques-—hypothermia, stress positions, sensory deprivation, etc.—-in the US and Iraq. The terms and specific methods used are the same for the Gestapo’s “verschärfte Vernehmung,” “Third Degree,” and Bush’s “enhanced interrogation.”

HEYDRICH told him that he reserved for himself the final approval of such measures in Germany and he would see to it that they were applied only in the most urgent cases.

## Indian Mangoes

Anil Dash issues a globalization alert:

Anil Dash: Indian Mango Alert Level: Orangish-Green: Indian mangoes have arrived in the U.S. for the first time, and for me, my family, and my friends, this is a big freaking deal. I've got a lot to say about the subject, but if you weren't familiar with the fact that this is the first time in history that we in the United States are able to eat mangoes that are actually from the place that mangoes were born, it's time to get acquainted.Some good recent news coverage:

From the Boston Globe, Indian Mangoes Arrive At Long Last: Last March, President George W. Bush signed two landmark pacts with India: one on nuclear technology, the other lifting a 17-year restriction on the import of Indian mangoes. The world's news media paid attention to the nuclear accord. But in the Indian community here and throughout the country, the magic word was "mango."

One of the purposes of weblogging software is to be a lightweight content-management system for lazy people like me. But Typepad doesn't scale:

Economics: 2,107 entries categorized "Economics"

## Honest Conservatives Should Shut the F*** Up: Hoisted from Comments on "A Proposed Pecking Order for Honest Conservatives"

As a good Millian liberal, I turn the mike over to John Emerson:

Honest Conservatives Should Shut the F--- Up: I think that when the "honest conservatives" reject Bush they're just setting up their assault on the Democratic president they expect to see elected next year. Their way of digging themselves out from under the Bush disaster (and obscuring their own massive role in that disaster) will be to swear that "Never again can an American President be allowed that kind of free hand!" This will justify their fighting the new Democratic President tooth and nail for every inch of ground.

For example, Bush's politicization of the career staff in Justice and elsewhere was a very bad thing, no? And certainly this kind of thing has to stop, no? So we will forbid the new Democratic President to interfere with career personnel, with the result that all of the political hacks Bush put in civil service positions will be untouchable. (When that happens, can we expect the media to understand what's going on? No, of course not. Can we expect the Democrats to understand? Not really, but this is one area where I'd trust Rahm Emmanuel. Send a hack to catch a hack.)

Now that they've stolen the horse, they're going to lock the barn door. It's just like January 2001: once Bush was inaugurated, the media and the Republicans decided that sabotage by impeachment and Gingrichian nastiness are really very bad things after all. So now the same people who worked so hard trying to impeach Clinton for almost nothing are telling us that it's unthinkable to do anything serious about Bush's much graver crimes.

In the long run we need a two-party [or multi-party] system, so ultimately we want the Republican Party to be rebuilt on sane, civilized principles [or replaced by a different, non-insane party]. But let's not rush into this. For the moment our task is to boot the Republicans out of office and start repairing the damage they've done.

The role of the sane conservatives in this will be to sit in the back of the room with paper bags over their heads and their hands folded quietly on their laps.

## A Proposed Pecking Order for Honest Conservatives

As good Millian liberals, we want to promote authentic, articulate, and intelligent advocates of other points of view. Who should we liberals respect--and give a boost to, in terms of reading them, arguing with them rather than mocking them, debating them, and suggesting that others read them?

As far as honest conservatives are concerned, it's a difficult question. Those I usually suggest--economists like Bruce Bartlett and Andrew Samwick and Bill Niskanen, strategists like Richard Clarke and Tom Barnett and Brent Scowcroft, social policy types like Rod Dreher and John DiIulio, unclassifiables like Andrew Sullivan and Ross Douthat--I find dismissed as "not typical conservatives. We want a representative of the conservative point of view. Someone like Larry Kudlow or Ramesh Ponnuru."

It strikes me that those who reject my advice are (as is almost always true) making a mistake. They are going about it the wrong way. We want an "honest conservative"--a conservative intellectual adversary we can respect, who is also intelligent. But their first move is to define a "conservative" as a public supporter of the Bush regime and its deeds. That means, I think, that they are searching the empty set.

Slavoj Zizek applied this to the puppet regimes of Eastern Europe under the iron curtain:

The Trilemma: Of the three features—-personal honesty, sincere support of the regime, and intelligence—-it was possible to combine only two, never all three. If one was honest and supportive, one was not very bright; if one was bright and supportive, one was not honest; if one was honest and bright, one was not supportive...

But it applies just as well to the Bush regime. Sincere conservative supporters are not bright. Bright conservative supporters are not honest. Bright and honest conservatives are not supporters--and so are ruled out, and we are left with Larry Kudlow and Ramesh Ponnuru.

I think we should recognize that the intelligent, honest conservatives out there are not Bush supporters, and turn that to our advantage in selecting honorable intellectual adversaries.

What I would like is a list of "honest conservatives" who fit into the following categories--and let me try to give an example of a person whose existence is recognized by the mainstream media for each class:

• Class of 2000: People who in 2000 said, "George W. Bush is not qualified to be president, and we should be really worried about this."

• Class of 2001: People who in 2001 said, "I supported Bush in 2000, but George W. Bush is not listening to his honest conservative policy advisers, and we should be really worried about this." John DiIulio

• Class of 2002: People who in 2002 said, "I supported Bush in 2000 and 2001, but 911 has unhinged the administration; it's detention and other policies are counterproductive; it needs to be opposed." Richard Clarke

• Class of 2003: People who in 2003 said, "I supported Bush over 2000-2002, but enough is enough. That's it. I supported the invasion of Iraq because I was certain there was evidence of an advanced nuclear weapons program--otherwise invading Iraq was just stupid. Well, there was no advanced nuclear weapons program. Invading Iraq was just stupid. Plus there's the Medicare drug benefit. These people need to be evicted from power." Tim Barnett, Bill Niskanen

• Class of 2004: People who in 2004 said, "I've been a Bush supporter. I'm a Republican and a conservative, but I've had enough: I'm voting for Kerry." Andrew Sullivan, Bruce Bartlett, Brent Scowcroft

• Class of 2005: People who in 2005 said, "I voted for Bush in 2004. But I made a mistake. A big mistake."

• Class of 2006: People who in 2006 said, "I know I supported Bush up to last year, but that shows I'm not the brightest light on the clued-in tree." Rod Dreher, Andrew Samwick

The class of 2007--people who are now opposed to Bush only because they think Bush will drag the Republicans down in 2008--doesn't count. Dead-enders who are still claiming that Bush is Teddy Roosevelt don't count. They aren't honest conservatives. They are only worth scorn, and fit objects for nothing but mockery. One just doesn't joust with them in honorable intellectual combat. It's not done.

I say divide "honest conservatives" into the classes of 2000 to 2006, rank them by seniority according to the date of their public honesty, and use that as a ranking for who to read, who to respect, and who to promote as worthy intellectual adversaries. Refer to them using this citation form:

Brent Scowcroft, Honest Conservative Class of 2004...

Who else falls where in this classification?

The original AskJeeves concept of trying to figure out what questions users might eventually ask, and preparing answers for them, had some obvious limitations. (Same ones that are evident in the typical FAQ file.) But over the last year or two Ask’s search system has introduced enough features and tweaks to be worth visiting along with Google. For instance, I’ve found that its image search gets more quickly to what I’m looking for than most alternatives.

Recently Ask rolled out the new search page it has been working on for quite a while. Early this year I saw some of the features in embryonic form, during a visit to my friend Yumin Liang and his research team in Hangzhou, China. (Subject for another time: the shift of some “real” research work by international firms, not just “localization” work for the Chinese-language audience, to sites in China.)

These features, and more, are now available on the revamped Ask.com site. The crucial concept here is presenting a lot of different kinds of information on one screen. You search for, say, the Atlantic Monthly on Ask, and you get pretty quickly a central column of normal search results. But over the next few seconds the rest of the page fills in. On the right side of the page, images, blog links, encyclopedia entries. On the left, ways to narrow or expand your search — narrow it by asking about the magazine’s history, expand it by also learning about, say, the New Yorker. It’s worth giving a try.

## Michael O'Hare Praises Robert Frank's Economic Naturalist

Michael O'Hare writes:

The Reality-Based Community: Serve fewer courses to nourish more; let the diners in the kitchen and give them aprons.: Bob Frank exhibits the factor most highly correlated with student evaluations of teaching, which is manifest enthusiasm for his subject matter.... Modern psychology has boiled down being really smart to a couple of core traits. One is knowing a lot about a lot of different things; the other is being wired up so these different things jump out of their usual cognitive boxes and connect in unusual ways. Frank is smart in this way, so his exploration connected his experience with learning languages and his general education knowledge of why male and female albatrosses look alike while bull and cow seals don't.

The result is three very solid insights, consistent with a lot of what others are discovering about how people learn. The first is the difference between (i) recall and repetition of a recipe, formula or fact on cue and (ii) really knowing something. The second is the principle articulated by Bob Behn thus: "If you're teaching someone to use a computer, you should never touch the computer." The third is the difference between the few important basic principles that experts use all the time without realizing it, and the many abstruse and frontier-pushing results they get with them.

Put these together and you get a teaching model with:

1. A few big ideas, looked at from many directions and dressed up (but not hidden) in many guises.
2. Students getting their hands dirty using these ideas to solve problems they know they have (this is always better than letting the ideas look like new problems they didn't want).
3. Displacement of the concept of being right by the concept of being useful (Nelson Goodman explains this in Ways of Worldmaking).

The central exercise of such a course is to assign the students the role of naturalist (this is where the birds and seals come in): Find a situation that surprises you, that you can understand better (or even explain completely) using the core concepts of economics. Your explanation doesn't have to be complete, or even right, but it has to be interesting and reasonable. Five hundred words, once in the middle of the semester and again at the end.

I have generalized his exercise this spring in my introduction to public policy course to a "policy naturalist" assignment with excellent results (though I'm not sure I did such a good job of distilling the course down to fewer big ideas and less showoffy arcana), and I intend to do the same next fall in an introductory probability and statistics course. This model really has legs.

The result of Bob's experiment is, obviously, a drawer full of these exercises, which he has assembled into a book... The Economic Naturalist, and if you're not putting on your coat to repair immediately to your local physical bookstore, or mousing over to your favorite online merchant to buy it, you are reading the wrong blog.

## Mark Thoma on Progressive Taxation

Mark Thoma writes, on progressive taxation:

Economist's View: Progressive Taxation as a Political Shield for Globalization: First, when there is change such that makes one group better off at the expense of another as has happened recently with globalization, and when redistribution can leave everyone better off, then redistribution is justified.

Second, I think everyone should have equal opportunity to be a CEO or a hedge fund manager, or whatever they want to be. However, the playing field is far from level and there is a lot more we could do on this side of the equation. Not everyone will be a CEO of course, or achieve their dream job whatever it might be, but everyone should have an equal chance to be one of the winners. In the meantime, until more has been done to level the playing field, progressive taxation is a means of making up for inequality in opportunity.

Third, for me at least, progressive taxation is justified by the equal marginal sacrifice principle (the last dollar paid should cause the same amount of disutility for everyone). Thus, even if opportunity is equal, and even if there were no winners and losers to worry about, justification for progressive taxation would remain. I think a more progressive tax structure than we currently have is needed to equalize the disutility of paying taxes.

We could list "preventing a political backlash" as a fourth reason for redistribution. But I'm not sure we need to invoke the political economy argument. If we use progressive taxation in accordance with the three principles above, then income will be more equally distributed and a backlash against globalization is less likely to occur.

## Progressive Taxation as a Political Shield for Globalization

Mark Thoma sends us to David Wessel:

Economist's View: Progressive Taxation as a Political Shield for Globalization: David Wessel of the Wall Street Journal says there is increasing support for income redistribution policies to compensate the losers from globalization and prevent a backlash against trade liberalization:

The Case for Taxing Globalization's Big Winners, by David Wessel, Commentary, WSJ (free): A new argument is emerging among the pro-globalization crowd in the U.S...: Tax the rich more heavily to thwart an economically crippling political backlash against trade prompted by workers who see themselves -- with some justification -- as losers from globalization.

The sharpest articulation of this view comes not from one of the Democratic presidential campaigns, but from economist Matthew Slaughter, who recently left President Bush's Council of Economic Advisers to return to Dartmouth's Tuck School of Business.

"Policy has become more protectionist because the public is becoming more protectionist," Mr. Slaughter and ... Yale political scientist Kenneth Scheve, write in the new issue of Foreign Affairs magazine. "And the public is becoming more protectionist because incomes are stagnating or falling."

Globalization, the two academics argue with unswerving conviction, is good for the U.S. ... But the benefits ... have been distributed unevenly. ... The conventional response from fans of globalization, including the Bush administration, is rhetorical support for more aid for workers hurt by imports ... and better education to equip the next generation of Americans with skills needed to command high wages in a global economy. Both are crucial. Progress on both is painfully inadequate.

But trade-adjustment assistance is traditionally targeted narrowly at workers hurt by imports. Today's angst about globalization is far more pervasive. ... And education takes generations to pay off.

What to do? ... "It is best not to address increasingly salient concerns about inequality by interfering with trade," Mr. Summers argued [recently]... His solution: use progressive taxation to offset some, but not all, of the increase in inequality. For starters, return tax rates for couples with incomes above $200,000 to the levels they were under President Clinton. "Truly expanding the political support for open borders requires making a radical change in fiscal policy," Messrs. Slaughter and Scheve argue. Their particular proposal: eliminate the Social Security-Medicare payroll tax on the bottom half of workers -- roughly those earning less than$33,000 a year -- and make up the lost revenue by raising the payroll tax on others.

This, obviously, would be a sea change in fiscal policy. ... But all this talk is likely to influence any Democrat who takes the White House in 2008. He or she will almost surely move to raise taxes on the best-off Americans -- both to raise revenue to pay the bills and to resist the three-decade-old inequality trend...

## Hoisted from Comments: Life Is Not Perfect

Hoisted from comments: Maynard Handley says life is not perfect:

Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal: Not Your Father's Microcomputer: But life is not perfect yet.

Safari fragments memory in an ungodly fashion, meaning that after it's been open and used aggressively for a few weeks, you really want to restart it --- either than or accept that massive paging that occurs every time a page is loaded or closed. (And it occasionally crashes.) Obviously the ideal would be a Safari that did not fragment memory in this way. Second best would be a Safari that, on quit or crash, could restart with the same set of open pages. Unfortunately the existing Safari gives us neither. Rumors differ on the Safari 3 of the future. No beta report I've seen mentions long term memory behavior, and while one report implies you can restart everything after a quit, I've seen no confirmations, and no indication of how well it works after a crash.

What we really need, longer term is

• the ability to restore state after a quit or crash as part of every program and
• the ability to restore all programs after those occasional necessary reboots (OS upgrades, hardware installation)

I'd like to see Apple or MS get to work on these since they both seem to be reduced to pretty pathetic OS-wide improvements, given their most recent offerings. And honestly, both of these really should not be that hard. Opening all apps on reboot is trivial, as is providing some UI guidance and example in all the Apple apps of what is expected in terms of saving state when an app reopens.

(There do remain the occasional weird things that can crash OS X. The last one I found was making some fctl() calls on a file of length zero. That one is definitely fixed in Leopard, and probably fixed in a recent Tiger update.

The more serious one is the software RAID support which is so crappy, even in Tiger, as to be useless. Mirrored RAID, at least over FW400, if one of the drives goes bad, will hang the machine --- which kinda makes you wonder what the point of the RAID was. I have seen this happen on two different machines with two different collections of drives.

This is specially galling as a paper from Usenix 2000 or 2001 discusses problems with software RAID, describes a method for injecting faults into the system, tests across a variety of OSs, and concludes that SW RAID for Windows is pretty damn solid, while for Linux [at that time] it's pretty damn flaky; OS X did not offer SW RAID at the time. It would be nice if someone at Apple read that paper and followed its methodology.)

## The Trilemma

Slavoj Zizek:

The Dreams of Others -- In These Times: Of the three features—-personal honesty, sincere support of the regime, and intelligence—-it was possible to combine only two, never all three. If one was honest and supportive, one was not very bright; if one was bright and supportive, one was not honest; if one was honest and bright, one was not supportive...

## "Connecticut for Lieberman" Party Demands Lieberman's Resignation

Via Oliver Willis:

Joe Lieberman Asked To Resign By His Own Party [Oliver Willis: Like Kryptonite To Stupid]: The Connecticut for Lieberman Party is calling on Senator Joseph Lieberman to resign from the U.S. Senate following his remarks made Sunday on CBS' Face the Nation regarding military action against Iran.

Lieberman said on the national television program that, "we've got to be prepared to take aggressive military action against the Iranians."

The Connecticut for Lieberman Chair, Dr. John Orman, called for Lieberman's resignation saying that he "crossed the line" and "no longer represents the views of the citizens of Connecticut"...

## Free or Common or Shared Speech

Aaron Swartz is a national treasure:

On The Internet, No One Knows You're Defunct - Christopher Hayes’ blog: In digging around for some more reading on Richard Rorty, I happened to discover a full archive of the late, great Lingua Franca magazine. Thanks to Aaron Swarz, you can spend hours reading profiles of quirky and esoteric intellectual figures and movements you might have missed if, like me, you were in college during LF’s heyday and not disposed to spending your free time reading more about American academia.

http://linguafranca.mirror.theinfo.org/

Damn! Apples are getting reliable!

11:05 up 48 days 18:10, 2 users...

## Inflation in China?

An overvalued currency can come back to earth in two ways. The value of the currency vis-a-vis other currencies can decline, or the value of the currency vis-a-vis goods can decline: nominal depreciation or inflation. We understand that China's State Council has told the People's Bank of China not to let the nominal value of the RMB rise. But why hasn't there been substantial domestic inflation in China? It is an offense against the Gods of Monetarism for the PBoC to be able to target both the nominal exchange rate and the nominal price level--to keep the value of the currency low on foreign exchanges and the value of the currency high vis-a-vis goods as well.

RGE - Inflationary real adjustment in China?: Chinese inflation seems to be picking up.   That is a good thing.  If China insists on holding the value of the RMB down -- and if the RMB's pace of appreciation against the dollar is slow, so the RMB in practice is depreciating against a host of currencies that are appreciating faster than the RMB is against the dollar -- the only way China's real exchange rate can adjust is through a rise in inflation.... Indeed, the biggest surprise coming out of China -- and there have been many -- is that rapid money growth hasn't, at least until now, generated much inflation.

A DBS report (See Chart 1 on p. 2) shows that China has had Philippine style money growth over the past ten years without experiencing Philippine-style inflation.  Indeed, the average inflation rate in China over the past ten years looks substantially lower than the average inflation rate in the US. Even with inflation above 3%, China isn't appreciating all that rapidly in real terms.  US and European inflation isn't that much lower.... I would rather see more nominal appreciation across the emerging world. But in countries whose real exchange rate is undervalued, rapid inflation is a logical consequence of resisting nominal appreciation.

## FoucaultAlthusserDerridaJameson

In comments and elsewhere, those with a sharp distaste for cultural studies "theory" in moral philosophy see it as one undifferentiated reactionary mass: FoucaultAlthusserDerridaJameson.

I want to draw some distinctions:

• Fredric Jameson: A number of very interesting hypotheses about the relationship between material life, culture, and ideology in the age after the age of mass communication--hypotheses that may be true and may be false, but that are certainly worth investigating.

• Jacques Derrida: I'm not sure there's anyting there: he traps himself into a nihilistic philosophical box, which he gets out of only by declaring his arguments immune to the destabilizations he performs on the arguments of others.

• Louis Althusser: There's something there, but (a) it's reductionist, simplistic, and largely wrong; and (b) the violation of discourse ethics in calling it an interpretation of Marx is so gross and grotesque to compel the conclusion that he was either always a con man or always a madman.

• Michel Foucault: The bill of indictment against Foucault is:

1. He was a naive enthusiast for a bunch of nasty Iranian terrorists and thugs.
2. He was French.
3. He trusted sources he shouldn't have trusted.
4. There's nothing useful you can get out of Foucault that you can't get out of John Grenville Agard Pocock, Quentin Skinner, and a creative misreading of Thomas Kuhn's Structure of Scientific Revolutions.

I agree with criticisms 1, 2, and 3. 4 may be true as well, but I came to these ideas not through Pocock and Skinner but through Foucault and Keith Tribe (1). Therefore I openly avow myself the pupil of that mighty thinker Michel Foucault, and even here and there coquette with the modes of expression peculiar to him. But at least for my purposes his useful ideas suffer a certain mystification in his hands: he presents them upside-down, as it were. They must be turned right side up again, if you would discover the rational kernel within the mystical shell.

(1) J. Bradford DeLong (forthcoming 2008), "Two Months Before the Mast of Post-Modernism," in John Holbo, ed., Framing Theory's Empire (West Lafayette, IN: Parlor Press for Glassbead Books) http://delong.typepad.com/sdj/2005/07/two_months_befo.html. J. Bradford DeLong (1986), "Senior's `Last Hour': A Suggested Resolution of a Famous Blunder," History of Political Economy 18: 2 (Summer), pp. 325-333 http://www.j-bradford-delong.net/movable_type/archives/000585.htm.

## Battling Apocalypses Department: Mitt the Apostate...

Wonkette directs us to the International Herald Tribune:

Romney puts Mormons in spotlight - International Herald Tribune: Tom Grover, 26, a Mormon who is the host of a weekday talk show on politics on radio station KVNU here, said that while he thinks Romney has handled the scrutiny admirably, some of his callers were incensed about Romney's repudiation of his own ancestors' polygamy. The church outlawed the practice a century ago, but members are taught to understand that polygamy had a theological and historical context in the church, which Romney's remark ignored. "That really left a bad taste in people's mouths," Grover said. "That's a tough thing for people to hear when their ancestors sacrificed a lot to live that life. They probably wouldn't bring polygamy back, but they honor the place of it in church history."

Audrey Godfrey, a historian who has written books with her husband, Kenneth, said of Romney, "If I were one of his relatives, I would be upset with him."

Another case arose when George Stephanopoulos of ABC News asked Romney about a Mormon teaching that Jesus will come to the United States when he returns to reign on earth. Romney responded that the Messiah will return to the Mount of Olives in Jerusalem, "the same as the other Christian tradition."

Grover said some of his radio listeners were astounded. "They were just in disbelief, saying, 'That's not true; Jesus is coming back to Missouri,'" Grover said. "It's the LDS Church's 10th article of faith that Zion will be built upon the American continent"...

So vote for Romney if you want Jesus close at hand in Missouri, rather than far off in the Levant.

Or you could go further. Vote for Ahmednijad. If you vote for Ahmednijad, then:

Apocalypse: [W]hen the world has fallen into chaos, and civil war emerges between the human race for no reason... half of the true believers will ride from Yemen carrying white flags to Mecca, while the other half will ride from Karbala... carrying black flags to Mecca.... [Jesus] will reappear carrying a cross of gold and a crown of thorns...

But Jesus will not command this Host of the Lord. The commander will be his good friend and boss: Muhammad ibn Hasan ibn Ali al Mahdi, the Twelfth Imam of the Party of Muhammed's son-in-law Ali:

At this time, Muhammad ibn Hasan ibn Ali al Mahdi will descend from the heavens wielding God's Sword, the Blade of Evil's Bane, Zoulfikar, the Double-Bladed Sword...

## The Simple Analytics of Progressive Redistribution

Some of us were lucky to have Robert Waldmann http://rjwaldmann.blogspot.com/2007/06/possible-efficiency-gains-due-to-taxes.html in an adjoining room on the third floor of Weld Hall our freshman year. Others of us went to Yale.

Michael Froomkin writes:

Discourse.net: I Wish Robert Waldmann Had Been My Freshman Economics Teacher: What do you think the world would look like if freshman micro-economics students were routinely taught by Robert Waldmann? Instead of carrying around an Austrian model in their heads in which we assume total selfishness, zero transactions costs, and conclude that transfer payments are suspect, they’d be hearing about Possible efficiency gains due to taxes and transfers,

A little bit of altruism changes everything. If people care about their own physical well being (pleasure minus pain) plus that of those they love plus 0.00001 times the well being of strangers redistribution can be Pareto improving. Non poor agent A doesn’t need taxes and transfers to give his money to the poor. However, after he has chosen my level of private giving, he doesn’t want to give any more via taxes. However he wants to give rich agent B’s money to the poor. He cares a tiny bit about the small cost (in pleasure minus pain) to B and the same tiny bit about the large benefit to the poor. Increasing taxes and transfers from zero will make everyone happier if the population is large enough so that taxing one me is more than balanced by taxing lots of you

I’m pretty sure I had to wait until sophomore year to hear this stuff, and even then it was said with much less enthusiasm, as an embarrassing exception to an otherwise tidy result. (Or course, Robert couldn’t have been my freshman economics teacher, we graduated the same year from different universities, but you know what I mean.)

## Daniel W. Drezner: Regarding Norman Finkelstein

Daniel Drezner thinks that DePaul has denied Norman Finkelstein tenure for invalid reasons:

danieldrezner.com :: Daniel W. Drezner :: Regarding Norman Finkelstein: I've never met Norman Finkelstein, I've never read any of Finkelstein's work, and based on the reviews, I suspect I'm none the poorer for it. I also suspect I wouldn't like him very much. There might well be valid reasons for have denied him tenure. But reading the paper trail on this case, it's hard not to conclude that DePaul did not use a valid reason. Indeed, it's hard not to conclude that Finkelstein got a raw deal.

## Bush's Watch Stolen in Albanian Crowd?

Faisal Jawdat emails that Bruce Schneier thinks some Albanian pickpocket stole Bush's watch:

Schneier on Security: Bush's Watch Stolen?: Watch this video very carefully; it's President Bush working the crowds in Albania. 0.50 seconds into the clip, Bush has a watch. 1.04 seconds into the clip, he had a watch. The U.S. is denying that his watch was stolen: "Photographs showed Bush, surrounded by five bodyguards, putting his hands behind his back so one of the bodyguards could remove his watch." I simply don't see that in the video. Bush's arm is out in front of him during the entire nine seconds between those stills.

Look between 0:50 and 1:04:

## Does a Financial Institution Have a Fiduciary Duty to Someone Else's Shareholders?

From the Washington Wire:

Washington Wire - WSJ.com : A Litmus Test for Bush's Business Policies: Our colleagues at Law Blog report on case before the Supreme Court that exposes the disagreement within the government over how the court should rule in a matter that may have implications for investors. The question before the court is whether third parties — vendors, bankers, lawyers, accountants — can be sued under federal securities laws for allegedly playing a role in another company’s accounting fraud. Called “scheme liability,” the issue has become a litmus test for the Bush administration’s business policies. Securities-law practitioners have called it the most important case in a generation. The SEC commissioners voted 3-2 to weigh in on behalf of investors, and urged the DOJ to follow its recommendation. But U.S. Solicitor General Paul Clement refrained from filing an amicus brief by a midnight deadline even though he had been asked to do so by the SEC.

If you discover that a potential counterparty is undertaking a deal in order to deceive its shareholders, what is your proper response? One response is to say that the other party's shareholders should be looking out for themselves, and that because the counterparty is sleazy and desperate you can really take them to the cleaners and press hard. The other response is that you need to turn down the deal and inform the other side's shareholders: that you have a duty of fair dealing and public honesty.

And how closely should you investigate whether your potential counterparties are tiptoeing up to or over the line of accounting fraud?

## Jim Hamilton on Recent Employment Data

Jim Hamilton's view on BED and CES employment data. There is a big puzzle: Why should the BED and the CES have strikingly different seasonal patterns? I can't think of a reason.

Econbrowser: Reconciling the BED, CES, and birth/death employment data: There has been some discussion recently about discrepancies.... Although a legitimate issue has been raised, there has also been a bit of misunderstanding.

The Bureau of Labor Statistics provided a great boon to business cycle researchers when it began publishing the Business Employment Dynamics data. The BED data divides establishments into two categories: (a) firms that are either new establishments or are hiring more workers compared to the previous quarter, and (b) firms that either go out of business or are hiring fewer workers compared to the previous quarter. The number of net job additions from firms in the first class is referred to as "gross job gains," whereas the number of net jobs lost from firms in the second class is referred to as "gross job losses." The BED numbers for gross job gains and gross job losses come from the Quarterly Census of Employment and Wages.

These BED data are collected separately from (and reported with a considerably longer delay than) the Current Employment Statistics data.... You'd think... that if you took the difference between the gross job gain and loss numbers from the BED, you'd get the same number as the change in the number of people working according to CES. Historically you typically did get roughly comparable numbers, but the estimates differ somewhat for the most recently available quarter, 2006:Q3. Barron's Alan Abelson (via Barry Ritholtz) reports the following claims attributed to Philippa Dunne and Doug Henwood of the Liscio Report:

compared with a gain for the [2006:Q3] quarter of 442,000 jobs reported in the so-called establishment survey, the Business Employment Dynamics, or BED, reckoning was a scant 19,000 additions. In manufacturing, the 9,000 jobs lost according to the payroll figures balloon into a loss of 95,000 jobs in the BED data; the improbable 20,000 additions in construction (think: housing) turns into a loss of 77,000 by BED's measure; the 507,000 gain in private services shrinks to 108,000. And so it goes. Or, more accurately, so goes the job mirage.

One likely culprit, Philippa and Doug suggest, is that curious concoction known as the "birth/death" model used by the Bureau of Labor Statistics to estimate the gains/losses in jobs from the launching and demise of businesses....

The 442,000 jobs growth number... was apparently arrived at... by taking the average of the seasonally adjusted CES-reported levels of employment for July, August and September and subtracting the average seasonally adjusted values for April, May and June.... [But you shouldn't] compare the 442,000 or 498,000 CES figure with a number of 19,000 from the BED. The 19,000 figure was arrived at by first taking the BED raw count of gross job gains and seasonally adjusting it, and then taking the BED raw count of gross job losses, and seasonally adjusting it separately. The seasonal patterns of these two series are quite different.... The correct procedure, if you want to know whether the two surveys have come up with the same count, is to use the seasonally unadjusted values for each.

The change in the actual, seasonally unadjusted CES count of the number of people working at private establishments between June and September was a loss of 298,000 jobs. The difference between the seasonally unadjusted BED job gains and losses in 2006:Q3 was a net loss of 453,000 jobs. The discrepancy between the two is therefore 453 - 298 = 155 thousand jobs... about 2/3 of the discrepancy claimed by these analysts resulted from a misuse of the data by the analysts rather than a problem with the data that BLS reported....

Even so, a discrepancy of 155,000 workers within the single quarter 2006:Q3 is more than it should be, and suggests something is clearly wrong with one of the measures.... [T]he most likely factor identified in the BLS report is indeed the birth/death model fingered by Abelson above.

I do not know what Abelson's definition of "voodoo" might be, but I doubt that many statisticians would want to describe the BLS birth/death model with such a term.... If a firm filed a report last month but did not file this month, is your estimate of the number of people working there now equal to zero? Or is your estimate the number the firm reported for the most recent available month? If you gave either answer, please go back and retake Stat 101. The best guess of the number of people working would come from forming some estimate of how many of the nonresponders represent business "deaths" and how many represent data errors. The way you would form such an estimate would be to look at historical data for what are the odds that a missing observation represents a business death rather than just a late report.

The other kind of firm that you're going to miss with the CES survey is one whose existence you did not know about at the time you set up the survey design. Again, is your statistical estimate of the number of people working at new firms this month zero? Mine would be based on looking at what the past numbers for jobs coming from new firms have been and how they correlate with things I currently know.

And that is what the BLS birth/death model is all about.... It is just an effort by the BLS to use the data it has to estimate the data it does not have.... [A]t the moment, with a weak economic environment in general and a very troubled housing sector in particular, it seems very likely that a higher fraction than usual of the nonreporting establishments have in fact gone out of business, and that there are fewer new businesses starting than would be typical. For this reason, it seems very likely to me that recent CES data have been overstating the extent of employment in residential construction. The next question is, what should we do about it?

The birth-death issue... is a fundamental limitation of any data gathered directly from firms. This in my view is another good reason to be using the BLS household data.... Yes, I know, the household count has problems of its own, and it would be an even bigger error to rely on it alone. But... the household survey gives us an estimate that at least is not contaminated by the birth/death issue.... Given these concerns, beginning next month I will be increasing the weight I place on the BLS household survey from 10% to 20% and decreasing the weight on the CES establishment data from 80% to 70%.

I conclude that the problems with the CES data are more significant than I had been estimating, though substantially less severe than some analysts have suggested. I continue to believe that the best way to deal with such problems is not to throw out data, but instead to widen the set of variables that are regarded as informative. That approach supports the inference that U.S. employment growth in the first half of this year was likely less robust than is currently reported, particularly in the construction sector.

## Looking Worse and Worse for DePaul...

DePaul's denial of tenure to Mehrene Larudee stinks:

DePaul Professor Who Supported Finkelstein Also Was Denied Tenure: By SIERRA MILLMAN: Another professor at DePaul University was rejected for tenure at the same time as Norman G. Finkelstein, and she believes her advocacy for the embattled political scientist may have derailed her career. "There is no good explanation for why I was denied tenure," Mehrene E. Larudee, an assistant professor of international studies, said in an interview on Monday. "So one has to look elsewhere." Praised as "outstanding" by the dean of her college and recommended unanimously by distinguished faculty peers during the tenure process, Ms. Larudee was 19 days away from becoming director of DePaul's program in international studies when she learned on Friday of the decision against her. She and the program's current director, Michael A. McIntyre, had been discussing the responsibilities she would be assuming when he received, via e-mail, a letter from DePaul's president, the Rev. Dennis H. Holtschneider.

"Hey, this is great, I'll get to congratulate Mehrene right now," Mr. McIntyre recalls thinking, until he read the letter. "Our jaws just dropped, hit the floor, when we saw the decision went the other way," he said. In the letter, Father Holtschneider said that the University Board on Faculty Promotion and Tenure had decided against awarding tenure to Ms. Larudee and that he accepted that decision. Ms. Larudee suggested that her active participation in a committee that formed to defend Mr. Finkelstein may have biased administrators against her own tenure case.

A university official denied that there was any connection between the two cases. "I want to emphasize that our faculty-review process assures that every case is evaluated independently, on its own merits," said Denise Mattson, a spokeswoman. "No cases are linked in any way." According to Father Holtschneider's letter, Ms. Larudee demonstrated a "strong service record" but would not receive tenure because of "mixed teaching evaluations, at times below the departmental mean, a thin record of scholarship." Mr. McIntyre declined to comment on whether Ms. Larudee's advocacy work may have affected the tenure decision, but he dismissed the tenure board's reasoning and said, "I'm just shocked that unanimous recommendations would be overturned with a sentence that doesn't even scan grammatically and has no real substance."

He confirmed Ms. Larudee's account that Charles S. Suchar, dean of the College of Liberal Arts and Sciences, had given her the strongest possible endorsement in her most recent merit review, in March, and said Mr. Suchar had approved her as the international-studies program's next director. "That indicated the level of his confidence in her tenure case," he said. Mr. Suchar was not available for comment on Monday.

Anne Clark Bartlett, who is president of the universitywide Faculty Council and a professor of English, said she was surprised by the decision. It's "fairly unusual for someone to be turned down at a higher level after being upheld at a lower level" of the tenure process, she said. "I think people are still coming to terms with what this means," she said. Gil Gott, who is chair of the College of Liberal Arts and Sciences' Faculty Governance Council and an associate professor of international studies, said in an e-mail message that the decision against Ms. Larudee was "devastating to international studies." Mr. Gott emphasized that he was commenting as an individual and not as a university official. While Mr. Suchar wrote a letter in favor of Ms. Larudee's tenure, he had recommended that the university reject Mr. Finkelstein's bid (The Chronicle, June 11)...

## DeLong Smackdown Watch

Hoisted from comments: Patrick Nielsen Hayden is irate:

Oppressed Multi-Millionaire Celebrity Heiresses of the World Unite!: Go ahead and yuk it up, but of course that article on the socialist web site didn't "embrace the cause of Paris Hilton," nor did I suggest that it did. What it argued was that she's being sold to us as a scapegoat for our resentment of much worse people who don't happen to be easy-to-dislike nitwit heiresses. The only "cause" being "embraced" is the idea that we ought to be less ready to take media narratives at face value. Darn those crazy socialists! What crazy notion will they venture next?

Note, by the way, how many of the comments here so far have been about the question of whether or not Paris Hilton was ill done by, and how we should feel about Paris Hilton. Which is exactly what the article I linked to, and my post about it, wasn't about. Your jokey misrepresentation ("Oppressed Multi-Millionaire Celebrity Heiresses of the World Unite!... Patrick Nielsen Hayden informs us that the followers of Leon Trotsky embrace the cause of Paris Hilton") erases that distinction and lands us right back into arguing about the minutiae of Paris Hilton, rather than questioning the overall story we're being fed. Why oh why can't we have a better press corps? Gee, Brad, good question.

Touche...

## Oppressed Multi-Millionaire Celebrity Heiresses of the World Unite!

Patrick Nielsen Hayden informs us that the followers of Leon Trotsky embrace the cause of Paris Hilton.

Note, however, that these stalwarts of the Fourth International do make a number of good points (and some bad ones): their analysis is correct in that Paris Hilton is doing 45 days of jail for a crime that is almost invariably punished by house arrest, in that this is a two-minute-hate directed against a sexually-transgressive woman, and in that this performs Durkheimian solidarity and Marxian mystification functions in stabilizing the current state of society; their analysis is incorrect in that no ruling elite group planned to have her perform this role, and in that Paris Hilton is cast in the role of Marie Antoinette by her own deliberate choice:

The campaign to keep Paris Hilton in jail: nothing healthy about it: David Walsh: The pious outrage Thursday over heiress Paris Hilton’s “early release” from jail in Los Angeles, accusations of “special treatment” and the vindictive demands that she receive “justice,” i.e., punishment, have nothing healthy or progressive about them.... A host of Los Angeles politicians, on a daily basis utterly indifferent to the conditions of the poor, seized the opportunity of Hilton’s release to posture as the champions of equal justice....

One of the few voices of reason was well-known attorney Mark Geragos, who appeared on the Larry King program on CNN Thursday evening. Geragos pointed out that... many non-violent offenders are released early—-some 200,000 in recent years.... “In fact,” Geragos noted, “she did about double to triple what anybody else would have done... I’ve had one [client] within the last week who literally turned themselves in, took the bus ride and were released right from county jail onto the electronic monitoring and then was released from that in six days.... So when people say Paris was getting special treatment, I say, yes. She got double or triple what everybody else in LA County gets.”...

There are many unhealthy aspects to this whole business. In the first place, the Paris Hilton celebrity phenomenon was a product of the foul media-entertainment apparatus in the US and a generally diseased social climate. Under healthier circumstances, Hilton’s “bad girl” antics would have been of concern only to her family and close friends.... [T]he need to live vicariously through celebrities—-athletes, supermodels, film stars, etc.—-has grown exponentially.... The same processes breeding vicarious living... also produce resentment, jealousy and even rage.... Hostility toward such figures is often linked with envy. All of this is played upon by the media for its own cynical purposes....

Hilton is a particular case. She is one of the first celebrities whose coverage has been generally negative from the outset... the part of the spoiled, obnoxious, rich brat, only interested in parties and clothes and headlines.... A seething but politically confused population is fed victims, sacrificial lambs, so to speak.... The population is intended to feel, falsely, that its cause has been served and blows have been delivered against the rich and powerful, when all that’s happened is a young woman guilty of a misdemeanor has gone to jail for a month or more...

## Ken Sokoloff

This remembrance of Ken Sokoloff's contributions to economic history was put together for the Economic History Association by a number of his friends, colleagues, and students, including Jean-Laurent Rosenthal, Steve Haber, Naomi Lamoreaux, Dora Costa, Latika Chaudhary, Petra Moser, and Eric Zolt:

Ken Sokoloff, age 54, Professor of Economics at the University of California, Los Angeles passed away on May 21, 2007 following complications from liver cancer.

Sokoloff was one of the world's leading experts in economic history -- the study of the long term processes that drive economic growth. His research covered many different areas ranging from the U.S. patent system to comparative institutional development in the United States and Latin America. He wrote extensively and published more than 60 academic articles and book chapters.

Sokoloff received his B.A. degree from the University of Pennsylvania in 1974. He went on to do graduate research at Harvard as a student of Robert Fogel. He received his Ph.D. in economics in 1982. As a graduate student he participated in a number of projects dealing with the evolution of the American labor force and the important role of women in U.S. industrialization. His dissertation research focused on productivity growth in U.S. manufacturing before the Civil War. His discovery that productivity growth was rapid even prior to mechanization led him to place considerable emphasis on the importance of access to markets in fostering economic growth.

Sokoloff joined the UCLA faculty in 1980. At UCLA, he built one of the premier groups in economic history in North America and mentored scores of students, all the while maintaining a research program that led him to co-author papers with scholars from many parts of the country: David Dollar (the World Bank), Stanley Engerman (Rochester) Claudia Goldin (Havard), Stephen Haber (Stanford), Zorina Khan (Bowdoin), Naomi Lamoreaux (UCLA), Eric Zolt (UCLA) and quite a few others. He emphasized the interdisciplinary nature of economic history and championed a very open approach to research. This strategy combined with his dedication to maintaining a convivial atmosphere around him, attracted scholars not just in economics or history but also law, political science, and sociology. His desire to help others' research made the Von Gremp workshop a core element in the training of graduate students at UCLA and a very desirable setting for scholars to receive feedback on their research. In 2006, the university recognized the success of his program building by formally creating the UCLA Center for Economic History.

In addition to his appointment at UCLA, Sokoloff held visiting appointments at prestigious institutions in the U.S. and abroad. These included Oxford University, the Ecole des Hautes Etudes, the California Institute of Technology, Tel Aviv University, the Russell Sage Foundation, and the Center for Advanced Study in the Behavioral Sciences at Stanford. His accomplishments were recognized by his being named a Research Associate of the National Bureau of Economic Research and a Fellow of the American Academy of Arts and Sciences. Among his peers, the excellence of his research had made him one of the rare two time winners of the Arthur H. Cole prize for best article in the Journal of Economic History.

From his dissertation work he carried an interest in the relationships among endowments, access to markets, human capital, technological change, and more generally economic growth. In his early years at UCLA he continued working on American manufacturing, paying increasing attention to the factors that explained the Northeast's persistent leadership. He also sought confirmation for his emphasis on the importance of access to the market and competition in contemporary data, investigating the industrial development of follower economies such as South Korea, Taiwan, and Mexico. This research furthered his argument and led him to consider the extent to which American institutions were particularly favorable to growth.

He pursued this objective by focusing on the role of endowments and on institutions that favored technical change. In several papers on the role of seasonality, Sokoloff emphasized that regions whose agriculture was heavily focused on small grains (wheat and rye) could not develop large permanent industrial labor forces because of the need to respond to the sharp peaks in agricultural labor demand at harvest time. Interestingly, Sokoloff's regions could include either part of the U.S. or whole countries like the U.K. In such regions rural manufacturing would endure in many labor intensive industries. Moreover seasonal labor stoppages reduced the willingness of entrepreneurs to deploy capital and in particular to mechanize production. In contrast in the U.S. Northeast, agriculture's focus on livestock made it relatively easy to create a large full time labor force and thus to increase the rewards to inventive activities that were embodied in machinery.

Among the institutions that Sokoloff placed at the heart of the American experience was the patent system. Starting in the late 1980s he began a long term project to trace out the impact of the patent system on American economic growth. He did so by accumulating large samples of patent records so as to be able to study the extent to which patenting was individually, geographically, or socially specialized. One of the principal findings of this work was the amazing degree to which common people in the nineteenth century United States were active inventors and patent holders. Nevertheless he also noticed that over the nineteenth century repeat patentees became more important and that in response a market for technology emerged in the U.S. For Sokoloff, a democratic process of invention blossomed in the U.S. because of the joint evolution of the patent system and the market for technology. That process was also favored by a relatively equal distribution of income, and high rates of literacy. Sokoloff noted that other patent systems (e.g. British or French) were quite different in that they were either highly restrictive or failed to examine proposed inventions for novelty and usefulness. While European countries did industrialize, he argued that they would have done much better if they had adopted an intellectual property rights regime closer to that of the U.S. Such reforms did occur in a number of countries in the later part of the nineteenth century.

Starting in the mid 1990s, Sokoloff increasingly focused on the comparative economic history of Latin America and the United States. He noted that the areas that had been the most successful in the early years of colonization and settlement (the Caribbean, certain parts of Central America, and the U.S. South) had fallen far behind what had been at the time marginal areas like the Northern U.S. or Canada. In a series of highly influential articles he showed how geographic factors such as climate and soils played a fundamental role in the development of economic and political institutions in these societies, and how the influence of these initial economic and political institutions has persisted to the present day. In particular Sokoloff documented both within the U.S. and across the Americas that early institutions had a large effects on the evolution of human capital (for example, as measured by literacy rates) and on the distribution of economic wealth and political rights. The adverse effects of high degrees of initial inequality could only be offset by large shocks to the demand for labor. Indeed, elites were willing to liberalize only when the returns to attracting immigrants were particularly high. These articles are standard reading in graduate curricula in economic history, development economics, and political science. Indeed, the ramifications of this work extend well beyond academia, and have shaped the way that economists at multilateral aid organizations, such as the World Bank, think about reforming economic institutions that retard growth.

Beyond UCLA, Sokoloff brought his interdisciplinary values to the All-UC group in Economic History. His service to that institution included being a member of the steering committee off and on for nearly three decades as well organizing more than a half dozen conferences. He has been a trustee of the Economic History Association and the Cliometrics Society, a member of the editorial board of the Journal of Economic History and an associate editor of the Journal of Economic Perspectives.

He is survived by his father, Dr. Louis Sokoloff and his sister, Ann, and many colleagues, friends and former students. Donations in his memory may be made to the:

Kenneth L. Sokoloff Memorial Fund at the Economic History Association
Department of Economics
500 El Camino Real
Santa Clara University
Santa Clara, CA 95053-0385

Checks should be made payable to the Economic History Association, with a notation that they are for the Sokoloff endowment, income from which will be used to provide Sokoloff fellowships for the support of young scholars.

## Sebastian Mallaby on the Democrats as "the Party of Economic Seriousness"

I was going to praise Sebastian Mallaby for writing a column in which--after a long time of carrying water for the Bushies and covering up the incompetence, malevolence, disconnection from reality, and mendacity of the Republican leaders--he crosses the aisle and states that the Democrats are the reality-based party of grownups while the Republicans are the fantasy-based party of spoiled children. Mallaby runs the issues: immigration, trade, health care, social programs, fiscal balance.

I was going to say: "Welcome! You're very late to the party, but welcome! Try harder and we may even admit you to the Order of the Shrill, where all the cool people are." But do I dare? Doth one swallow make a summer?

Sebastian Mallaby: Democrats may be supplanting Republicans as the grown-ups on [Globalization 101].... [T]he Republican Party, which prides itself on understanding globalization when it comes to capital flows or trade, is blind to the global labor market. In the crunch immigration vote in the Senate on Thursday, only seven Republicans voted for reform, while 38 voted against it. Among the supposedly globo-phobic Democrats, the numbers were roughly reversed: 37 Democrats voted for reform while just 11 voted like ostriches.

This pattern is not confined to Republicans in the Senate.... Rudy Giuliani and Mitt Romney... spouting the amnesty nonsense.... Fred Thompson is scarcely any better. Giuliani is also spouting nonsense about health care.... [M]arket failure is a basic fact of health-care economics. But Giuliani is oblivious.... Hizzoner is either a coward or a lightweight. Meanwhile, the Democratic Party is sounding less bad on globalization.... [T]he bill emerging from Congress on the process for putting inward investment through a security review resists the temptation for paranoid obstructionism. And leading Democrats have indicated that they'll support the Doha round of global trade talks if negotiators can revive it.... Democratic presidential hopefuls have sounded sweetly reasonable.... John Edwards... has admitted that trade benefits poor countries and has declared that arguments over labor standards should not be an excuse to obstruct liberalization... has proposed a thoughtful health-care reform... supports market-minded social programs....

In the 2004 election, the Kerry-Edwards ticket forfeited its claim to economic seriousness by opposing trade deals such as the Central American Free Trade Agreement. In 2004, likewise, the Bush-Cheney ticket forfeited its claim to economic seriousness by defending its dishonest tax cuts. This time around, the party that gets closest to a fiscally responsible platform that accepts globalization while helping the losers will deserve to win. For the moment, Democrats are doing better.

## Ezra Klein: Baerly There

Ezra Klein writes:

Ezra Klein: Baerly There: One more thing: I assumed this riposte would appear in the next issue of Democracy, as they have a section entirely devoted to responses, and I'm attacked by name in the article with an out-of-context, edited quote. [Kenneth] Baer refused...

I think it's time to write to the editorial committee of Democracy: A Journal of Ideas: that's Louis Caldera, Christopher Edley, Jr., William Galston, Leslie Gelb, Elaine Kamarck, Robert Reich, Susan Rice, Isabel Sawhill, Theda Skocpol, Anne-Marie Slaughter, and Sean Wilentz.

## Where Was Colin Powell in 2002, 2003, 2004, 2005, and 2006?

Colin Powell says:

Think Progress » Powell: Close Guantanamo Now, Restore Habeas: [O]n NBC’s Meet the Press, Gen. Colin Powell strongly condemned the U.S. prison at Guantanamo Bay, calling it “a major problem for America’s perception” and charging, “if it was up to me, I would close Guantanamo — not tomorrow, this afternoon.”

He also called for an end to the military commission system the Bush administration has created to try Guantanamo detainees. “I would simply move them to the United States and put them into our federal legal system,” Powell said. He scoffed at criticism that the detainees would have access to lawyers and the writ of habeas corpus: “So what? Let them. Isn’t that what our system’s all about?”

“[E]very morning I pick up a paper and some authoritarian figure, some person somewhere, is using Guantanamo to hide their own misdeeds,” Powell said. “[W]e have shaken the belief that the world had in America’s justice system by keeping a place like Guantanamo open… We don’t need it, and it’s causing us far more damage than any good we get for it.”

That's nice. It's only five years too late. Where was Powell in 2002, 2003, 2004, 2005, or 2006?

## What's Wrong with Importing Agricultural Products?

Dean Baker is for it:

Beat the Press Archive | The American Prospect: What's Wrong With Growing Produce in Mexico? The Washington Post tells us that farmers in Texas are having trouble getting enough workers because of restrictions on immigration. It then reports one farmer's warning that if Mexicans can't come over the border to work on farms here, then the produce will just be produced in Mexico and shipped over the border.

This invites the obvious response "so what?" I dont' see a problem with importing produce from Mexico. I also think it's probably better in general for Mexicans to have the opportunity to work in their own country than have to come to the United States to get a decent job. I realize that the farmer in the story may be out of business, but the government does not exist to guarantee farmers access to cheap labor.

Dean's beef is that Washington Post staff writer Sylvia Moreno commits one of the standard incompetences of Washington Post staff reporters covering economic issues. There are at least six groups of stakeholders: U.S. growers, U.S. unskilled workers, Mexican growers, Mexican unskilled workers, legal migrants, illegal migrants, and U.S. consumers. Ms. Moreno talks about only one of these seven groups--U.S. producers--and so gets the story wrong.

I'm still looking for anybody to tell me a reason that the Washington Post should publish a print edition tomorrow. Anybody? Anybody? Bueller?

## Why Everybody Should Be Short Louis Althusser and His Intellectual Children

This is one of four additional posts that I had wanted to write for the TPM Cafe symposium on Chris Hayes's "Heterodox Economics," but did not succeed in putting to paper in a timely fashion:

Hoisted from Comments: Andres on Althusser: Brad: "Althusser is a dominated asset: nobody should have Althusser in their intellectual portfolio, as Althusser himself admitted, eventually."

Oh dear. I have to emphatically disagree. Not about the merits of Althusser, who made some good and important points but on the whole failed to revitalize Marxism in a lasting manner. However, Althusser should be approved or rejected on his own merits, not on the fact that he disowned his work in one of his more depressed moments (and not, for that matter, because he eventually went crazy and killed his wife).... Want to jettison Althusser? Read For Marx and Reading Capital, and then decide. And then let others do it too...

As for Althusser, you would be on better ground if you said "Althusser is not worth reading to me". And I wouldn't be surprised or critical, since the work of someone who wanted to clarify the philosophical foundations of Marxian political economy would not be appealing or interesting to a commited neoclassical economist, even one of an anti-laissez faire bent. But many others have found Althusser worth reading. What privileges your opinion above theirs?

My opinion is privileged because I have thought long and hard and intelligently about these issues, and Althusser and his children have thought long but not hard and definitely not intelligently.

My opinion is privileged because it is also Michael Berube's and Bill Lazonick's, who are both serious and smart and make powerful and rational arguments:

Michael Berube:

Michael Bérubé: I offer this preface as a way of broaching the otherwise incomprehensible question of why anyone would think it necessary to devise a “structuralist Marxism.” Structuralism is so antipathetic to all [standard Marxist and neo-Marxist] questions of hermeneutics and historicity that one might imagine the desire for a structuralist Marxism to be something like a hankering for really spicy ice cream.  And yet, in the work of Louis Althusser, spicy ice cream is exactly what we have.  I don’t like it myself.  But because it’s an important byway in the history of ice cream—er, I mean the history of Marxist theory—I still find it necessary to tell students about it, partly in order to warn them that it will very likely leave a bad taste in their mouths....

In the past, I’ve directed my students to Judt’s review as well as to various accounts (including Althusser’s) of Althusser’s late “confessions”—-that he was poorly read in Marx, that he suffered from lifelong mental illness, that his so-called “symptomatic” readings in Marxism were little more than an elaborate way of making shit up. I’ve done this not merely to complicate the view of Althusser one gets in the Norton, where the headnote tells us that “Althusser’s major concepts—-‘ideological state apparatuses,’ ‘interpellation,’ ‘imaginary relations,’ and ‘overdetermination’—-permeate the discourse of contemporary literary and cultural theory, and his theory of ideology has influenced virtually all subsequent serious work on the topic”—-but to pose a pedagogical conundrum for students. Let us assume, for the sake of argument, that Althusser was speaking the truth about his lack of familiarity with the Marxist canon, and that his mental illness played a large role in his life and work. (Hardcore Althusserians have tried to set aside his “confessions” precisely by appealing to his history of mental illness, but this merely produces a Marxist-theory version of the Cretan liar’s paradox: of course you can’t believe a madman who tells you he’s mad.) Now, having assumed all this, is it possible nonetheless that Althusser might have left us with Marxist concepts worth using, regardless of whether they are well-grounded in actually existing Marxist theory, or should we (as Judt does) just jettison the whole Ideological Althusserian Apparatus, and shake our heads at the fact that such a theory could ever have appealed to so many intelligent people?...

I think it’s vitally important for students to know where the Althusser phenomenon came from, and why anyone would attempt to craft a fully structuralist, antihumanist Marxism in the first place.... As for whether his concepts are worth retaining, I say, eh. I think we have better versions of them readily available to us.... [Althusser is] far less subtle and useful than the Gramscian corpus from which Althusser derived it.... Gramsci’s looser and more supple conception of “civil society” (to which Stuart Hall turned in the 1970s and 1980s) is valuable precisely because it is not systematized: it recognizes that the institutions of civil society are many and various, and often work at cross purposes. Compared to Gramsci’s account of political actors exclusive of the State, Althusser’s looks impoverished and reductive.

As for Althusser’s concept of ideology: as I remarked above, it seems to me a complex way of suggesting that people simply don’t know what the hell they’re about.... [S]uch a theory of ideology and interpellation seems to leave no way of accounting for people who might come up with such a theory.... [H]ow is it that the code that allegedly speaks us includes the sentence “the code speaks us” and all the sentences with which to contest that one?...

[Althusser's] consequences for Marxism--or for any theory of social agency and historical change-—seem to me to be quite awful.... [We need a different] vision of social and historical conflict, one in which individuals are never fully interpellated, and perhaps may be hailed by competing, intersecting, and contradictory discourses; in which, furthermore, individuals are more or less conscious of the degree to which they participate in those discourses; and in which, finally, ideological formations, or hegemonies, are striated and cross-cut, fissured and unstable... in which we can recognize that “no mode of production, and therefore no dominant society or order of society, and therefore no dominant culture, in reality exhausts the full range of human practice, human energy, human intention (this range is not the inventory of some original ‘human nature’ but, on the contrary, is that extraordinary range of variations, both practised and imagined, of which human beings are and have shown themselves to be capable).” That sentence comes from Raymond Williams’s 1973 essay “Base and Superstructure in Marxist Cultural Theory”...

Bill Lazonick on the intellectual children of Louis Althusser:

William Lazonick (1982), "Discussion of Resnick and Wolff, Feiner, Jensen, and Weiss," The Journal of Economic History, 42:1 (March), pp. 83-85 http://links.jstor.org/sici?sici=0022-0507%28198203%2942%3A1%3C83%3ADORAWF%3E2.0.CO%3B2-G: I find the title of this session--"Marxist Approaches to Economic History"--to be inappropriate....

First, what we have heard here are not "approaches" but one approach repeated four times....

Second... the approach presented here... relates not to economic history... not even an approach to the actual study of social history.... It is philosophical thinking about how one might develop an analytical framework for studying feudalism, capitalism, and so on....

Third... the extent to which the approach is "Marxist."... [Is] historical interpretation [to be]... a mere reflection of one's theoretical constructs... [or] must theoretical conceptions, if they are to have any practical relevance... emerge from historical analysis[?]... The crucial isdue in the utilization of a Marxist persepctive... is not who has the "right" to appropriate the "Marxist" label.... It is the substance of the approach to history... that is important....

What transformed Marx from a philosopher into a social scientist... was his study of history to develop a theory of history... he studied the history of capitalist development in Britain in order to construct a theory of capitalist development.... on the basis of a detailed historical analysis of a particular historical epoch.... Even Marx's basic philosophical and ideological orientations were influenced by his confrontation with historical facts... his observation that peasants did not have the right to gather wood... was instrumental in his transformation from Hegelian idealism to historical materialism....

Marx's theory... was made up of a series of testable (and hence refutable) hypotheses that he himself sought to support with empirical evidence.... One can apply the historical materialist methodology to Marx's own ideas... thereby discover not only what parts of Marx's theoretical framework are right... [and] are wrong.... I view the Marxian framework as merely a starting point.... One must go beyond Marx historically... [and] theoretically....

[We] so-called empiricists--and I include Marx--lay the basis for intellectual discourse.... By way of contrast... Resnick, Wolff, Feiner, Jensen, and Weiss... isolate themselves.... They try to interpret the world without studying it. To elaborate upon Marx, philosophers have thus far interpreted the world; the point is to understnad its historical development, and to change it.

## Space for "Heterodox Economics"?

A note in my inbox tells me that if I read to the end I find that lost in the Norman Finkelstein fight is that DePaul University has also just denied tenure to Mehrene Larudee in spite of "strong backing":

DePaul Rejects Finkelstein: Concerns over that issue are reinforced by Friday’s tenure denial to Mehrene Larudee, who teaches international studies at DePaul, and whose work is in economics (and on issues having nothing to do with Finkelstein’s research). Larudee had strong backing throughout the process, until the final committee review and presidential decision to reject her. Via e-mail, she said that many at DePaul are wondering about the “startling departure” from university principles in her case and Finkelstein’s...

Here's Mehrene Larudee on lessons from NAFTA:

Inequality and Its Remedies in an Age of Integration: One lesson that emerges from Mexico's experience under NAFTA is that, where significant liberalization has already taken place, the benefits of further liberalization should not be expected to be large. Moreover, such benefits may come from tariff-jumping investment to take advantage of preferential market access provided only to members of a regional trade agreement...these benefits may be temporary only....

A second lesson is that countries with low agricultural productivity are not so likely to experience accelerated growth in wage income, especially in wages of unskilled workers, because a steady flow of rural-urban migration is likely to hold urban wages down....

A third lesson is that middle-income countries like Mexico may well be squeezed from below by lower-wage countries like China....

Fourth, when economic crises strike, as they have in many of the developing countries of the world, a weak social safety net is likely to give rise to an increase in labor supply, especially of workers with little or no labor force experience, so that unskilled wages disproportionately are driven down. There is evidence that raising the minimum wage could forestall this effect....

Fifth, at least in the short run, increasing enforcement of intellectual property rights will reduce income in developing countries and shift that income to mostly U.S.-based patent, copyright or trademark owners (Maskus 2000). In the longer run, there is speculation but little evidence that the benefits of greater innovation will offset the short-run costs....

The remaining gains to be had from free trade agreements are diminishing, and some of the non-trade provisions of these agreements are quite likely to have inequalizing effects, with their burdens falling on developing countries and lower-income households. In light of this, all the provisions should be very carefully scrutinized...

## Discourse Ethics Violation by Ken Baer

Anybody who reads Ken Baer's "Middle East Myopia: Newly declassified documents illustrate the danger of letting military disaster blind us to emerging international threats" should be aware that people he criticizes don't say what he claims they say. This is a first-class discourse-ethics violation.

To be specific, Ezra Klein wrote last March:

Ezra Klein: Autocratic Iran?: March 19, 2007: The latest Time Magazine has an article on internal criticism of Ahmadinejad that demonstrates something important:

This just isn't that repressive a society. For all the talk of Iran's autocratic tyrants, here you have the president being burned in effigy, interrupted by firecrackers, and condemned to death, all while he's giving a speech. And he does nothing more than "grin tightly" throughout it! In this country, if an activist exposes an anti-war t-shirt while the president is talking, she gets muscled out of the room. That's not to say Iran doesn't have all sorts of human rights violations of its own, but the attempt to make the country look like some sort of tyrannical, dictatorial regime is just another element of the war propaganda.

Here's what this becomes in Baer's hands:

Print Friendly: [T]oo many progressives... are in danger of letting the past prevent them from focusing on the real threats.... Some even go so far as to excuse the Iranian regime, the better to deny the very existence of a threat. One prominent blogger, Ezra Klein, wrote, in a post titled "Autocratic Iran?" that the "attempt to make the country look like some sort of tyrannical, dictatorial regime is just another element of the war propaganda."...

[I]t would be a disservice to our progressive ideals if we allowed disgust with the Bush Administration to lead to a softness toward totalitarian, anti-egalitarian, atavistic regimes and movements.... [W]e must aggressively oppose knee-jerk anti-Americanism and the strange alliances rampant among Islamic radicals and left-wing politicians... "the jihadism of fools"--and ensure that it does not spread to our shores. And it means that we cannot let the call for "realism" and "competence"--no matter how vital they may be as qualities in a commander-in-chief--become touchstones around which we build an aimless and disjointed foreign policy...

Ken Baer owes Ezra Klein an apology, and a retraction.

If Baer wants to build a foreign policy around fantasy and incompetence, he is making a good start.

## Why Oh Why Can't We Have a Better Press Corps? (David Broder of the Washington Post Edition)

Scott Horton watches David Broder wrestle with himself and reality--and lose:

Scott Horton: David Broder... is quite decisively of two altogether irreconcilable minds on the subject. On one hand, this whole trial is a farce and Scooter Libby never should have been tried. But on the other, it was completely reasonable for Judge Reggie Walton to have sentenced him just as he did....

[A] clinical diagnosis of schizophrenia[?] As for me, its plainly senile dementia. But... perhaps we should call in Dr. Frist for a videocamera diagnosis.

One thing I do know, however: Broder said that journalists – he cited Sidney Blumenthal, Newsweek and Joe Conason - had done wrong by saying that Karl Rove was at the heart of the Valerie Plame scandal. Broder wrote: "These and other publications owe Karl Rove an apology. And all of journalism needs to relearn the lesson: Can the conspiracy theories and stick to the facts." Of course, the prosecution proved that Broder was wrong, and that Blumenthal, Newsweek, and Conason were right on the money. So, it’s true that an apology is owing. From David Broder...

It's twue! It's twue! Broder says that Fitzgerald should never have prosecuted Libby--that it was unreasonable for him to do so:

David S. Broder - Judge Walton's Lesson - washingtonpost.com: [T]he absence of any underlying crime.... Libby was convicted on the testimony of reporters from NBC, the New York Times and Time magazine -- a further provocation to conservatives. I think [conservatives] have a point. This whole controversy is a sideshow... heightened by the hunger... to "get" Rove.... Like other special prosecutors before him, Fitzgerald got caught up in the excitement of the case and pursued Libby relentlessly, well beyond the time that was reasonable.

But, Broder says, given that Libby was tried for a crime that should never have been charged, Judge Walton did good in giving him a stiff sentence:

Lying to a grand jury is serious business, especially when it is done by a person occupying a high government position where the public trust is at stake. Knowing Judge Walton... he would never be party to allowing a big shot to get off more easily than any of the two-bit bad guys.... [H]e wants to be able to tell those young people that no one is above the law.... Walton is not just in the business of enforcing the law. He is also committed to steering youths in the right direction. This case will help.

This is simply psychotic. If it is unjust to investigate Libby, it is unjust to charge him. If it is unjust to charge him, it is unjust to try him. If it is unjust to try him, it is unjust to sentence him to jail.

The real reason for Libby to go to jail, of course, is to figure out why he spent so much time lying to the investigators. Was it simply that the truths he would have told would have been deeply discreditable to his boss Dick Cheney, that Libby assumed that Fitzgerald's operation was like Ken Starr's--that it would leak like a sieve--and hence that he owed it to his boss to lie? Was it, alternatively, that the truths he would have told would have given Fitzgerald no alternative but to submit evidence to the House for it to begin impeaching Cheney? It would be nice to know.

Sending Libby to jail for eighteen months starting now before his likely January 20, 2009 pardon is the best way to put pressure on him to come clean.

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## Adam Kotsko Should Be on the Front Page of Every Newspaper in America

The Weblog: Single Post View: The Real Problem with Bush: The real problem with the Bush presidency is that it is conceptually unclear what kind of king he thinks he is -- the absolute monarch of the Ancien Régime, or the Hegelian constitutional monarch who just "says yes and dots the i's."

In the initial campaign (2000), it's clear they were going for the latter: yes, George W. is a dumbass, but he's going to be surrounded by all these seasoned advisors. This image of Bush persists in the idea that Cheney, Rove, etc., are the ones really running the show -- or in the alternative narrative that what really matters is the conflict between the Department of State and the Vice-President's office. In both cases, George W. Bush personally is a non-factor -- just the "public face," chosen simply for name recognition (some voters are even rumored to have been convinced that they were really voting for George Sr. again), i.e. the "biological descent" that provides the element of randomness in Hegel's theory of the monarch.

On the other hand, you have the theory of the "unitary executive," the assertion of unheard-of "war powers," and a bunch of other indicators pointing toward an idea of an absolute monarch who can say, "L’État, c’est moi." What is missing is precisely such an "official" pronouncement -- all of the outlandish doctrines are "officially" disavowed, and situations are contrived in order to avoid a judgment from the courts (in the few situations in which the courts have issued a judgment, it has been to reject the "unitary executive"). In order for this absolute power to remain operative, it has to remain "unofficial" -- even though it is all "publicly known," no official judgment has come down upon Bush.

Maybe what is so frightening, however, is the way that these things go together -- the way that a series of "mere formalities" allow the quasi-absolute authority to continue uninhibited. And perhaps what keeps these "empty formalities" going is the fear that if the quasi-absolute authority entered the realm of "officiality," the formalities, rather than the authority, would dissolve.

This is just an over-formalized way of saying what I've been saying for years: what allows the Bush administration to continue is the fact that everyone else is afraid of triggering an "official" constitutional crisis, that is, of bringing out into the open the actual constitutional crisis under which we live. So: vote to authorize the war because you don't want to find out what happens when the president goes ahead and starts a war that Congress rejected. And so on, and so on.

The Democrats are now the party of continuing to have a constitution -- paradoxically, they think that the only way to do this is by refusing to face down Bush's gravest violations of the constitution. Hence no impeachment, no real investigation into intelligence manipulation, just this endless dithering with marginal scandals like the US Attorney thing.

No one wants to "officially" expose the fact that the executive branch has been effectively treating the constitution as suspended for all this time, even though the information pointing to this conclusion is publicly available and overwhelming.