Marginal Revolution

Carbon tax splat

A few of you asked me for more commentary on this linked article.  Will is on board but I think it is provocative but unconvincing.  Here are a few points: oddly, the author doesn't mention the strongest argument against such a tax, namely that the Chinese and others may not follow suit.  I don't worry much about one-time compliance costs if energy improvements bring a sounder long-run state of affairs; admittedly a big if.  The side deals from a tax will be bad and I expect an inefficient version of whatever happens; that said this does not disfavor reform vs. the status quo since the status quo has very bad side deals too; whether those side deals get worse, or by how much, depends on how the counterfactual is specified.  Under some scenarios the side deals in fact get better.  Uncertainty alone does not favor inaction, rather it favors action as a kind of insurance policy against very bad outcomes.  And uncertainty about long chains of causation most definitely does not, per se, favor reliance on market prices, rather it favors agnosticism about market vs. government.  Waiting does seem very costly to me; read Six Degrees.  I am far from convinced that the Nordhaus model is the best way to think about the costs of warming.  The author of the post is at his best when arguing: "a tax is unlikely to work," at his weakest when arguing "this means the best course of action is no tax at all."

The bottom line is that the whole thing is likely to end very badly for at least one billion of the world's people, no matter what we do within the feasible set.  In the meantime we can tell them they ought to get richer, and of course they should, but that's hardly a solution either.

Assorted links

1. Interesting arguments against a carbon tax

2. What are the longest drives on Google Maps?

3. Who is Lane Kenworthy?

4. Gas tax incidence

Markets in everything, Thorstein Veblen edition

A watch that doesn't tell time.  Oh, it costs $300,000.  And:

He added that anyone can buy a watch that tells time — only a truly discerning customer can buy one that doesn’t.

And here’s the best part: The watch sold out within 48 hours of its launch.

I thank Darren Klein for the pointer.

Addendum: I am reminded of Borges on Veblen: "When, many years ago, I happened to read this book, I thought it was a satire.  I later learned it was the first work of an illustrious sociologist."

Should smart men prefer the fiction of the past?

Razib thinks so:

I think that it is somewhat peculiar that many of us find fiction from the past more engaging than popular contemporary works. Aupelius' Golden Ass gets my attention; most contemporary fiction does not.  I am arguing here that this is partly due to the fact that in the past those who read copiously were, on average, much more like me than they were like the typical human. Not only were readers by and large men (usually of some means and comfort), but they were often also disproportionately eggheads who were eccentric by their nature. How many elite scholars were there such as Claudius who were not attracted to the public life of politics and do not appear in the annals of history? With the printing press, cheaper paper, and the rise of mass literacy, things changed, the distribution of taste shifted.  And so did the distribution of genres.

Read the whole thing.  I believe that literary "market taste" was closest to mine in the 1920s, a remarkable decade that saw the publication of major works by Proust, Mann, Joyce, Rilke, Kafka, and numerous other masterpieces.  That may be more a "spirit of the times" effect than an audience composition effect, since I prefer it to earlier and more elite periods as well.  (Or maybe only by then did fiction get dumbed down to my level!)

When it comes to Roman literature there is also a significant selection effect, namely what later manuscript collectors thought was worth preserving and protecting.  Many novels were written during Roman times, but not many of them have come down to us and thus the average quality of Roman literature may look artificially high, just as the average quality of today's literary menagerie looks artificially low.

Charles Tilly dies at 78

Here is one obituary.  Tilly was a historical sociologist but he had an influence on economic history as well, including the New Institutional Economics:

Dr. Tilly mined immense piles of original documents for raw data and contemporary accounts — including municipal archives, unpublished letters and diaries — that he used to develop theories applicable to many contexts. A particular interest was the development of the nation state in Europe, which he suggested was partly a military innovation. In his 1990 book “Coercion, Capital, and European States, AD 990-1990” (Blackwell), he argued that the increasingly large costs of gunpowder and large armies required big, powerful nation states with the power to tax.

In 1985, he gave early indications of his argument that war made states in an article that said nation states, with their monopolies on violence, function like gangsters’ protection rackets. He said that governments emphasize, create and stimulate external threats, then ask their citizens to pay for defense.

I think of his mid-career work as being most important, such as his The Formation of National States in Western Europe.  In any case America has lost one of its leading social scientists.  Wikipedia offers good links.  Here is Tilly on how to do social science work, recommended.