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Posted by Tyler Cowen

Here is one paragraph:

Although America is said to be — and many Americans are — seething about economic grievances, Tyler Cowen thinks a bigger problem is complacency. In his latest book, “The Complacent Class: The Self-Defeating Quest for the American Dream,” Cowen, professor of almost everything (economics, law, literature) at George Mason University and co-author of the Marginal Revolution blog, argues that the complacent class, although a minority, is skillful at entrenching itself in ways detrimental to the majority.

Here is the whole review.

The post George Will covers *The Complacent Class* appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

Failing to stem the tide of refugees arriving Europe, Italy and the rest of the European Union have agreed to pay Libya’s Government of National Accord (GNA), the UN-backed interim government that is struggling hold control of the country, to keep them from arriving in Italy and instead put them into detention camps in Libya.

The accord signed Feb. 3, provides for Italy to pay €220 million ($236 million) to the Libyan coastal guard and provide training to help them catch the vessels—primarily rubber dinghies. The Libyan coast guard will be charged with sending the boats back to Libya and putting people into camps. The political instability of Libya is such that there would be little guarantee of the conditions in which the migrants would be kept, according to Arjan Hehenkamp, general director of Médicins Sans Frontières (MSF).

Here is one story.  In Libya they understand the Coase theorem:

A security source in Libya spoke to Associated Press late last month saying: “Yesterday’s traffickers are today’s anti-trafficking force.”

I believe the size of the Coasean payments will rise.  If Libya is paid to halt migrants, and finds this a satisfactory or indeed even profitable arrangement, they also will act to…boost the supply of potential migrants.  “Producing potential migrants” will at some point become one of their more significant economic sectors.  And the larger the number of bottled up would-be migrants, the more Italy and/or the EU will pay to stop them.

Yet what is Italy otherwise to do?  I find it striking how underreported this story has been.

The post Solve for the Italian-Libyan equilibrium appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

1. The Democrats were debating single payer while this bill, which they dread, nearly passed (and still has some chance of passing).  This was not a random mistake, rather it reflects a more general tendency of the Democratic Party to focus on the wrong kind of expressive values, in a manner which does not seem remediable.  We need to re-model what they are, and build this kind of un-educability into the new model.

2. One lesson of Graham-Cassidy failure is that American health care, at the state level, is a race to the bottom not to the top.  Recall that the Canadian health care system also leaves key decisions to the provinces + block grants, but American Progressives love the results.  Most observers know the American states would not copy the Canadian provinces in their policies, and it is not only because fiscal equalization is weaker to the south.  The reality is that spending much more on health care would not make most American states much more desirable places for most people to live in.  If it did, Graham-Cassidy would be a better idea than in fact it is and a race to the top would ensue.  Better health care would brighten up states all around, attract more population, and increase the revenue going into governor’s coffers.

Democrats and Republicans both find this inadequacy of state-level outcomes difficult to accept, though for opposing reasons.  Democrats hate having to recognize that all the extra health care spending might be mainly redistribution rather than remedying a market failure or providing a broad-based social public good.  Republicans hate to see that giving states control over health care policy, and allowing them to revise Obamacare, won’t improve those states and probably would make most of them worse.

Of course my points #1 and #2 relate.  I agree Graham-Cassidy is a bad idea, but every time I hear the critics say it is heartless, or would “take away” people’s health insurance, or “kill people,” what I really hear is “If we let everyone vote again on Obamacare, with a real time balanced budget constraint, they wouldn’t vote for nearly as much health care next time around.”

Which is why you should not be obsessing over single-payer systems.

Across the board, pondering Graham-Cassidy, including its failure, should make you more pessimistic about economic and social processes.

The post Intellectual fallout from the likely failure of Graham-Cassidy appeared first on Marginal REVOLUTION.

Saturday assorted links

Sep. 23rd, 2017 04:26 pm
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Posted by Tyler Cowen

1. “”Globally more and more men and women are stepping away from clinical (medical) sperm donation environments and choosing to find each other through online connection websites such as the UK-based PrideAngel through which we conducted our study,” said Mr Whyte, from the QUT Business School.”  Link here.

2. Does linguistic bias limit English-speaking investment into Quebec?

3. Have I mentioned that Sixthtone.com is a great place to read about China?  And on Twitter.

4. Cops should get more sleep.

5. How a (John Cochrane) paper gets published.

The post Saturday assorted links appeared first on Marginal REVOLUTION.

The limits of refrigerator privacy?

Sep. 23rd, 2017 08:38 am
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Posted by Tyler Cowen

It seems we never quite reach them:

Walmart is testing a service that delivers groceries straight to your fridge when you’re not home.

On Friday, the retail giant announced a partnership with August Home, a smart-lock startup, that would allow a delivery person to enter customers’ orders and put groceries away in their refrigerators…

Delivery drivers will have a one-time passcode that allows them to unlock the August smart lock if customers do not answer the door when the delivery team arrives to drop off groceries. They will then drop off packages in the foyer, unload groceries in the fridge, and leave — with the door locking behind them.

Customers get a notification when the driver rings the doorbell. August home-security cameras allow them to watch the entire process from the app if they wish.

Here is the story, via Peter Metrinko.

The post The limits of refrigerator privacy? appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

Here is one presentation of such an argument, but keep in mind these points:

1. The strongest argument for redistribution is when redistribution boosts economic growth and benefits all or most of society.  That is by no means always the case, but it is sometimes true and of course it is not a Rawlsian argument.

2. The second strongest argument for redistribution is that it is sometimes intrinsically better if a poor, needy person has a resource, as opposed to a wealthier person having that same resource.  That is in fact what most people think, no matter what argument they give you.

3. As we’ll see, the Rawlsian argument is parasitic upon #2, so why not use #2 directly?  Admittedly, #2 is a difficult conclusion to establish in a scientific manner, but the Rawlsian gloss, upon examination, makes it weaker not stronger.  It does however make the argument look a) more academic, and b) apparently more in line with neoclassical economic modes of thinking.

4. Most political philosophers, or indeed most philosophers, are not Rawlsians, even if they have been influenced by Rawls, which is frequently the case.  So why should you, if you’re an economist, be a Rawlsian?  Is it that you read Rawls and the critics, sided with Rawls, and then sat down to derive its implications?  Or did you find it a convenient rationalization for something you already believed or wanted to believe?

4b. Rawls is almost always invoked selectively, rarely being applied across national borders or across the generations, cases where it yields screwy results.  Rawls himself hesitated to approve of economic growth, because it does not maximize the well-being of the original “worst off” generation, which of course has to do some saving.  He had sympathies with the idea of Mill’s stationary state.  It’s fine to reject those conclusions, as indeed you should, but again maybe you’re not really a Rawlsian.  You are a selective Rawlsian, if that.

4c. Most people — rightly I might add — believe just as much in redistribution or maybe more when the position of the unfortunates is certain in advance. How many times have you heard social immobility cited as a problem that requires redistribution for its solution?  That argument is fine on its own terms, but again we’re back to #2.  The funny thing about econo-Rawlsians is that they want to cite the uncertainty of the wealth distribution as a reason for redistribution, and then they wish to turn around and cite the certainty of the wealth distribution as yet another reason for redistribution!

Yes, maybe you can apply a Rawlsian transform to those situations with certain allocations, using a “…but*if* these people were all behind a veil of ignorance…”  But look, a Rawlsian transform is appropriate with only some probability, so if you adhered to Rawls as the “most likely correct moral theory,” you still in these cases of certain distributions ought to believe in less redistribution.  But that is not how people’s opinions are structured, nor is it how they should be structured, so in other words again we are not really Rawlsians but rather again motivated by #2.

5. When it comes to redistribution as social insurance, the biggest problems with the Rawlsian method is this.  People have all sorts of preferences across the distribution of income.  Some are merit-related, some liberty-related, some non-Rawlsian-fairness related, some insurance-related, maybe even some rooted in prejudice.  The list of motives and reasons is long.  As the veil is typically used by economists, it strips away all of those preferences but…the preference for insurance.  So it is no wonder that the final construct produces an argument for insurance.  You get out of the construct what you put into it.

6. If you already believe in #2, #5 won’t bother you much.  But #2 is doing the real work here.

7. Almost everyone stops applying #2 at some point or margin.  For instance, do you always and everywhere favor boosting the scope of the Obamacare mandate?  It would save lives.  If you don’t favor increasing the mandate, are you a despicable killer?  In fact what I observe is people taking the status quo, and its current political debates, as a benchmark of sorts, and choosing sides, yet without outlining the “stopping principles” for their own recommendations.  That’s a pretty sure sign a person is not thinking about the issues clearly.

8. Even #2, which I think of as a kind of “brute egalitarianism,” isn’t as straightforward as you might think.  We do not always apply it to people in other countries, wealthy people who are poor in net terms because they are about to die, ugly men who cannot get sex, and many of the disabled.  Just about everyone is more of a particularist, situation-based egalitarian than they like to let on.

In sum, the arguments for (some limited) redistribution are stronger than the arguments for Rawls.

The post Is there a Rawlsian argument for redistribution as a form of social insurance? appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

That is the title given to my latest Bloomberg column.  Excerpt:

The new Britain appears to be a nationalistic, job-protecting, quasi-mercantilist entity, as evidenced by the desire to preserve the work and pay of London’s traditional cabbies. That’s hardly the right signal to send to a world considering new trade deals or possibly foreign investment in the U.K. Uber, of course, is an American company, and it did sink capital into setting up in London — and its reputational capital is on the line in what is still Europe’s most economically important city. This kind of slap in the face won’t exactly encourage other market entrants, including in the dynamic tech sector that London so desperately seeking.

I should note that I prefer London cabs, because of their higher quality service, noting that the people most hurt by this ban are from lower-income groups.

The post London’s Uber ban is a big Brexit mistake appeared first on Marginal REVOLUTION.

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With more than half of the world population living in cities, one thing is undeniable: we are an urban species. Part game, part urban planning sketching tool, "Cities: Skylines" encourages people to use their creativity and self-expression to rethink the cities of tomorrow. Designer Karoliina Korppoo takes us on a tour through some extraordinary places users have created, from futuristic fantasy cities to remarkably realistic landscapes. What does your dream city look like?

Another Cost of Global Warming

Sep. 22nd, 2017 01:52 pm
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Posted by Alex Tabarrok

This paper documents a small but systematic bias in the patent evaluation system at the United States Patent and Trademark Office (USPTO): external weather variations affect the allowance or rejection of patent applications. I examine 8.8 million reject/allow decisions from 3.5 million patent applications to the USPTO between 2001 and 2014, and find that on unusually warm days patent allowance rates are higher and final rejection rates are lower than on cold days. I also find that on cloudy days, final rejection rates are lower than on clear days. I show that these effects constitute a decision-making bias which exists even after controlling for sorting effects, controlling for applicant-level, application-level, primary class-level, art unit-level, and examiner- level characteristics. The bias even exists after controlling for the quality of the patent applications. While theoretically interesting, I also note that the effect sizes are relatively modest and may not require policy changes from the USPTO. Yet, the results are strong enough to provide a potentially useful instrumental variable for future innovation research.

From a paper by Balázs Kovács, here. Hat tip Kevin Lewis.

The post Another Cost of Global Warming appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

…the greatest winners in 2026 would be Mississippi and Kansas, where federal health-care funding would more than triple and double, respectively. On the other hand, Connecticut’s aid would be cut by just over half.

And:

…the Kaiser Family Foundation…concluded that 35 states would lose $160 billion under the bill. The Kaiser study, like two earlier this week, looked at the cumulative effect from 2020 to 2026.

Here is the Amy Goldstein and Juliet Eilperin piece at WaPo.

The post Winners and losers under Graham-Cassidy appeared first on Marginal REVOLUTION.

Slower turnover for songs and movies

Sep. 22nd, 2017 04:48 am
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Posted by Tyler Cowen

From my email:

Hi, Mr. Cowen. I recently read The Complacent Class recently and enjoyed it. I’m writing because there’s an another example of American complacency that’s only come to light in recent weeks…

Specifically: the Billboard music charts..

Shape of You by Ed Sheeran last week broke the record for most weeks in top 10, with 33 weeks. The song it beat, Closer by The Chainsmokers and Halsey, set the previous record less than a year ago. http://www.billboard.com/articles/columns/chart-beat/7948959/ed-sheeran-shape-of-you-record-most-weeks-top-ten

(And yet another song in last week’s top 10, That’s What I Like by Bruno Mars, currently holds the 8th-longest record on that metric — and potentially still rising.)

Meanwhile, Despacito by Luis Fonsi, Daddy Yankee, and Justin Bieber tied the all-time record with its 16th week at #1: http://www.billboard.com/biz/articles/news/record-labels/7942315/luis-fonsi-daddy-yankee-justin-biebers-despacito-ties-for

Meanwhile, the biggest country song in the nation right now, Body Like a Back Road by Sam Hunt, is currently in its record-extending 30th week at #1 on the Hot Country Songs chart: http://www.billboard.com/files/pdfs/country_update_0905.pdf

This did not happen in decades past. Look at the Billboard charts from the ’80s — it was a new #1 song almost every week!    https://en.wikipedia.org/wiki/List_of_Billboard_Hot_100_number-one_singles_of_the_1980s

Just like how you describe in your book how people are moving less and want to stay in the same town where they were before, or how they’re switching jobs less and want to stay in the same job where they were before, people apparently just want to listen to the same songs they’ve been listening to already.

That is from Jesse Rifkin, who is a journalist in Washington, D.C. who writes about Congress for GovTrack Insider and about the film industry for Boxoffice Magazine.  Jesse sends along more:

And if you want links for statistical evidence, here are two — one about which movies have spent the most weekends in the box office top 10, the other about which songs have spent the most weeks in the Billboard top 10:

The post Slower turnover for songs and movies appeared first on Marginal REVOLUTION.

[syndicated profile] ted_video_feed
In an unmissable talk about race and politics in America, Theo E.J. Wilson tells the story of becoming Lucius25, white supremacist lurker, and the unexpected compassion and surprising perspective he found from engaging with people he disagrees with. He encourages us to let go of fear, embrace curiosity and have courageous conversations with people who think differently from us. "Conversations stop violence, conversations start countries and build bridges," he says.

What should I ask Doug Irwin?

Sep. 21st, 2017 05:36 pm
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Posted by Tyler Cowen

I will be doing a Conversation with Doug in early October, although with no associated public event, just a later podcast and transcript.  Here is Wikipedia on Doug:

Douglas Irwin is the John Sloan Dickey Third Century Professor in the Social Sciences in the Economics Department at Dartmouth College and the author of seven books. He is an expert in both past and present U.S. trade policy, especially policy during the Great Depression. He is frequently sought by media outlets such as The Economist and Wall Street Journal to provide comment and his opinion on current events.[1][2]

Prior to Dartmouth, Irwin was an Associate Professor of Business Economics at the University of Chicago Graduate School of Business, an economist for the Board of Governors of the Federal Reserve System, and an economist for the Council of Economic Advisers Executive Office of the President.

Doug has a very exciting new book on the history of trade coming out, which I covered here.  Here is Doug on Twitter.  Here is Doug’s recent WSJ Op-Ed on Steve Bannon, trade, and the history of America’s greatness.

So what should I ask Doug?  Your grace and wisdom are always appreciated and never in short supply.

The post What should I ask Doug Irwin? appeared first on Marginal REVOLUTION.

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Science fiction visions of the future show us AI built to replicate our way of thinking -- but what if we modeled it instead on the other kinds of intelligence found in nature? Robotics engineer Radhika Nagpal studies the collective intelligence displayed by insects and fish schools, seeking to understand their rules of engagement. In a visionary talk, she presents her work creating artificial collective power and previews a future where swarms of robots work together to build flood barriers, pollinate crops, monitor coral reefs and form constellations of satellites.

Google City!

Sep. 21st, 2017 11:24 am
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Posted by Alex Tabarrok

Amazon is looking for a city for its new headquarters. Boring! Google is looking to build a city. The FT reports:

Google’s parent company was working on a sweeping plan to build a city from the ground up, the executive in charge of its urban innovation business said on Tuesday, in an attempt to prove that a technologically-enabled urban environment can improve quality of life and reduce cities’ impact on the environment.

…“We actually want to build a new city, it is a district of the city, but one that is of sufficient size and scale that it can be a laboratory for innovation on an integrated basis,” said Dan Doctoroff, head of Sidewalk Labs, at a talk to the San Francisco Bay Area Planning and Urban Research Association.

Sidewalk was “quite far along” in its search for a city with which to partner to build a testing ground for new approaches to transport, infrastructure and possibly even governance and social policy, he said.

As I said in my NYTimes op-ed on private cities (with Shruti Rajagopolan):

The world is building more cities, faster than ever before. China used more cement in the last three years than the United States used in the entire 20th century. By 2050, India will need new urban infrastructure to house an additional 404 million people — a task comparable to building every city in the United States in just 35 years.

…As the world urbanizes, we need to experiment with new urban forms and new forms of urban planning, and privately designed and operated cities — proprietary cities — like Jamshedpur, India, or Reston, Va., may provide answers.

By the way, Virginia’s private city, Reston, was just named by Money magazine as one of the best places to live in the United States.

The post Google City! appeared first on Marginal REVOLUTION.

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Posted by Tyler Cowen

The co-authors on this paper (pdf) are Andrew Leigh and Mike Pottenger, here is the abstract:

The paper estimates long run social mobility in Australia 1870–2017 tracking the status of rare surnames. The status information includes occupations from electoral rolls 1903–1980, and records of degrees awarded by Melbourne and Sydney universities 1852–2017. Status persistence was strong throughout, with an intergenerational correlation of 0.7–0.8, and no change over time. Notwithstanding egalitarian norms, high immigration and a well-targeted social safety net, Australian long-run social mobility rates are low. Despite evidence on conventional measures that Australia has higher rates of social mobility than the UK or USA (Mendolia and Siminski, 2016), status persistence for surnames is as high as that in England or the USA. Mobility rates are also just as low if we look just at mobility within descendants of UK immigrants, so ethnic effects explain none of the immobility.

Social mobility is indeed difficult to pull off.  Hat tip goes to Ben Southwood.

The post Greg Clark visits Australia and finds high rates of status persistence appeared first on Marginal REVOLUTION.

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