Marginal Revolution

The practical value of economics as a science

I know of three very good books on the actual (or sometimes hypothetical) application of economic ideas to real world problems:

1. Alex Tabarrok's Entrepreneurial Economics: Bright Ideas from the Dismal Science.

2. Some other book I haven't read and can no longer remember.

There is now a third:

3. Better Living Through Economics, edited by John J. Siegfried.  It covers emissions trading, the EITC, trade liberalization, welfare reform, the spectrum auction, airline deregulation, antitrust, the volunteer military, and Alvin Roth algorithms for deferred acceptance.  The contributions are uniformly excellent and written by top economists.

*The Unincorporated Man* and slavery

As long as we are on the topic of slavery, why not consider fiction?  This science fiction novel has an intriguing economic premise: you're born a slave and you're not free until you can buy yourself back from your owner (which may be a corporation).

It may sound funny to think that a slave can save money but arguably an optimal slavery contract in a high-productivity society will give the slave some residual claimancy and some property rights, in order to spur work effort.

At some point you wonder whether a slave in this futuristic society is better off buying the rights to himself or herself.  (Then he has to find individual health insurance!)  If the system of slavery is truly secure, it's like living under Laffer Curve-maximizing taxation.  That's oppressive, but many people have lived under worse.  There would be lots of "Nudge" as well and with advanced technology very effective monitoring and control.

Is it possible that in such a world you would trust only a person who was a slave?

In many historical instances, slaves cannot precommit to "no revolt."  So slaves aren't allowed to earn at the Laffer maximum point, for fear they will rebel or otherwise receive or lobby for greater rights.  Real world slavery is much much worse than this hypothetical portrait might make it seem.

I won't have time to read through the novel (the new Alice Munro is out, for one thing) but I thought the premise was an intriguing one.  The Amazon reader reviews are favorable.

*From Poverty to Prosperity* watch

That's the title of the new and self-recommending book by Arnold Kling and Nick Schulz.  This work has text by the authors, interspersed with interviews with famous economists, including Robert Fogel, Robert Solow, Joel Mokyr, Doug North, Bill Easterly, Edmund Phelps, Amar Bhide, William Lewis, and Bill Baumol.  Here is Paul Romer:

It's the kind of culture that can tolerate rap music and extreme sports that can also create space for guys like Page and Brin and Google.  That's one of our hidden strengths.

You can buy the book here.  The subtitle is Intangible Assets, Hidden Liabilities and the Lasting Triumph over Scarcity.

Economics and biography

I think of the biographer as standing up and demanding that economists take their own method seriously.  Surely the economist should at some point be required to explain something in the life of an actual human being.

That is from my (favorable) review of E. Roy Weintraub and Evelyn L. Forget, Economists' Lives: Biography and Autobiography in the History of Economics.  The review will be published in a journal called Biography.

The Big Questions

In The Big Questions, Steven Landsburg ventures far beyond his usual domain to take on questions in metaphysics, epistemology and ethics.  Beginning with Plato, mathematicians have argued for the reality of mathematical forms.  Rene Thom, for example, once said "mathematicians should have the courage of their most profound convictions and thus affirm that mathematical forms indeed have an existence that is independent of the mind considering them."  Roger Penrose put it more simply, mathematical abstractions are "like Mount Everest," they are, he said, "just there."

All this must make Steven Landsburg history's most courageous mathematician because for Landsburg mathematical abstractions are not like Mount Everest, rather Mount Everest is a mathematical abstraction.  Indeed, for Landsburg, it's math all the way down - math is what exists and what exists is math, A=A. 

Read the book for more on this view, which is as good as any metaphysics that has ever been and a far sight better than most.  Moreover, Landsburg's view is not empty, it does have real implications.  Since there is no uncertainty in math, for example, Landsburg's view supports a hidden variables or multiple-worlds view of quantum physics.

Speaking of quantum physics, The Big Questions, has the clearest explanation of the Heisenberg uncertainty principle that I have ever read.  In fact, this is a necessary consequence of Landsburg's metaphysical views; since it's all math all the way down, the explanation of the uncertainty principle is the explanation of the math and any true uncertainty or mystery is simply a fault of our own misunderstanding.

Turning to epistemology, the theory of beliefs and knowledge, two chapters stand out for me.  I learned a lot from Landsburg remarkable clear explanation of Aumann's agreement theorem--and I say that despite the fact that in the office next to mine is Robin Hanson, one of the world's experts on the theorem (see Robin's papers on disagreement and also his paper with Tyler, but read Landsburg first!).

Landsburg's skills of explanation are also brought to bear in a wonderful little chapter explaining the theory of instrumental variables and of structural econometric modeling  - and this from an avowedly armchair economist!  

Finally for those, like me, who loved The Armchair Economist and More Sex is Safer Sex there is also lots of economics in The Big Questions.  Highly recommended.

Jeremy Taylor quotes Richard Wrangham on the domestication of human beings

I think we have to start thinking about the idea that humans in the last 30, 40, or 50,000 years have been domesticating ourselves.  If we're following the bonobo or dog pattern, we're moving toward a form of ourselves with more and more juvenile behavior.  And the amazing thing once you start thinking in those terms is that you realize that we're still moving fast.  I think that current evidence is that we're in the middle of an evolutionary event in which tooth size is falling, jaw size is falling, brain size is falling, and it's quite reasonable to imagine that we're continuing to tame ourselves.  The way it's happening is the way it's probably happened since we became permanently settled in villages, 20 or 30,000 years ago, or before.

That's from Taylor's interesting new book Not a Chimp: The Hunt to Find the Genes that Make Us Human.  Taylor does stress that this hypothesis is speculation rather than established fact.

By the way, our skulls are becoming thinner, a process known as gracilization.

Why do vampires attract so many readers and viewers?

Here is a WaPo piece which suggests it has to do with the transition from adolescence.  I recall another piece suggesting it had to do with the female fascination with gay men (is there one?).

Vampires are hardly "my thing," but I do like early Anne Rice, The Night Stalker, Herzog's Nosferatu, and I thought Coppola's Dracula movie was better than its reviews.  On the other hand, I couldn't get five pages into Twilight.  (Should I try True Blood?)

I believe vampire books and movies offer a few attractions:

1. You know from the beginning that the plot twists will have to be extreme.  Few movie makers offer up vampires who think pensively, talk inordinately, and live out ambiguous endings, sitting around in coffee shops.  A real vampire story is going to deal with death.

2. We are fascinated with the idea that people may be something other than what they appear to be.  You will notice that discovery and detection of vampires often plays a key role in the plot lines, sometimes commanding an inordinate amount of attention.

3. Vampire stories offer a platform for exploring the theme of pure, limitless, and eternal desire, yet without encountering the absurdities that might result from planting that theme in a realistic, real world setting, such as a man who loves cheese studded with raisins above all else.

4. Vampires play "hard to get" with women and they (for a while) embody Old World ideals of chivalry, in a plausible [sic] fashion.  Yet since they are fundamentally different beings, we can enjoy watching their strategies while simultaneously distancing ourselves from them.

5. Men may like vampire movies for date movies, for uh...priming reasons.  The movies prompt dramatic, emotional reactions in their companions.  Women may feel that such movies "test" how their men respond to highly fraught stories, with a potential for demonstrating protectiveness.  Or vice versa.  

6. Vampires do not seem to mind social disapproval, and in this sense many teens look to them as role models.

7. Some of the popularity is arbitrary with respect to the vampire theme itself.  There is a clustering of production in any successful cultural meme, once that meme gets underway.  You might as well ask why there is so much heavy metal music today.

8. Viewers and readers, who know vampire lore and thus vampire vulnerabilities, feel better informed than the high-status people who, in the drama, are fighting the vampires.

9. There are few successful songs or paintings about vampires, so the story-based aspects of the topic appear to be important in setting their popularity.

Here is an unorthodox answer to the question.

What I've been reading

1. Momofuku, by David Chang and Peter Meehan.  This Nelson/Winter treatise on industrial organization teaches you the evolution of recipes and restaurants and (most of all) the mistakes made along the way.  Smokiness is an important concept in Japanese food, pickling and fermentation are underrated cooking techniques, a cook can learn from a heart surgeon, people will pay $80 for a ribeye steak without fancy decor, and you can cook semi-safe sous vide at home (suck the air out with a straw).  Recommended.

2. Appetite City: A Culinary History of New York, by William Grimes.  A book like this has to have something interesting and indeed this one does.  There is an excellent chapter on how oysters once were "New York City food," akin to lobster in Maine or crab in Maryland.  No more.  The rest of the book remains oddly distant from the eating experiences of real people and overall I was disappointed.

3. Googled: The End of the World as We Know It, by Ken Auletta.  In the abstract this is quite a good book and if someone woke up from a time capsule from 1969 you would start him with this.  Too much of it was familiar to me, though.

4. Timothy Egan, Big Burn: Teddy Roosevelt and the Fire that Saved America.  Impeccably written and well-researched, but it bored me.  Spellbinding portraits of characters, etc. Not enough of a point and of course the fire was not what saved America.  Many people like it, though, so don't let me put you off.

5. The Lives of the Brain: Human Evolution and the Organ of Mind, by John S. Allen.  A very good Belknap Press introduction to recent research on cognition, especially cognition and language.  An antidote to many things you have read in Pinker.  It's a bit of a "tweener" book: it doesn't take you "by the hand" through the results but it also doesn't assume that you are a research scientist.  It was written at a good level for me, but some readers may wish for more explanation of the results.

*The Art of Not Being Governed*

The subtitle is An Anarchist History of Upland Southeast Asia and the author is James C. Scott of Yale University.  Here is a summary from the Preface:

...I argue that the [Southeast Asian] hill peoples are best understood as runaway, fugitive, maroon communities who have, over the course of two millennia, been fleeing the oppressions of state-making projects in the valleys -- slavery, conscription taxes, corvée labor, epidemics, and warfare.  Most of the areas in which they reside may be aptly called shatter zones or zones of refuge.

Virtually everything about these people's livelihoods, social organizations, ideologies, and (more controversially) even their largely oral cultures, can be read as strategic positionings designed to keep the state at arm's length.  Their physical dispersion in rugged terrain, their mobility, their cropping practices, their kinship structure, their pliable ethnic identities, and their devotion to prophetic, millenarian leaders effectively serve to avoid incorporations into states and to prevent states from springing up among them.  The particular state that most of them have been evading has been the precocious Han-Chinese state.

Highly recommended, this is a book Gordon Tullock would love.  So far it has received surprisingly little publicity but it strikes me as essential reading about Afghanistan as well.  Here is a much earlier Crooked Timber post on Scott.

*You Are What You Choose*

Scott DeMarchi and James T. Hamilton have a new book out and the subtitle is The Habits of Mind That Really Determine How We Make Decisions.  I take this to be the key paragraph:

It's called fast food, but your decision-making process in ordering a chicken sandwich can be incredibly complex.  In the following section, we describe six core habits of mind that affect how you make decisions in all areas of your life.  We call these TRAITS: Time, Risk, Altruism, Information, meToo, and Stickiness.

Here is a review and explication of the book.