Some Monday Links: Mostly Econ, again

The worldly turn (Aeon)

The chocolate route (Aeon)

For the Woke warriors, culture and economics are two sides of the same coin – just ask Mollie-Mae (CapX)

Optional.: Knowing who Mollie-Mae actually is.

Measuring the Essence of the Good Life (Finance & Development)

Nightcap: Development with Dignity (NOL)

Great Stories and Weak Economics (Regulation)

Digital currencies and the soul of money (BIS)

To close this, a couple of neat graphs from the European Central Bank. The first one shows a measure of central bank messages’ clarity , the lower the number, the better. The second graph demonstrates the frequency (a proxy for significance) of some buzzwords. As old Korean masters comment when comparing various strands of their art, the major central banks are “same, same, a little different“.

Source
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Nightcap: Development with Dignity

There’s a new book coming out that y’all should read: Development with Dignity: Self-determination, Localization, and the End to Poverty. Here’s the link. Here’s the description:

At a time when the global development industry is under more pressure than ever before, this book argues that an end to poverty can only be achieved by prioritizing human dignity.

Unable to adequately account for the roles of culture, context, and local institutions, today’s outsider-led development interventions continue to leave a trail of unintended consequences, ranging from wasteful to even harmful. This book shows that increased prosperity can only be achieved when people are valued as self-governing agents. Social orders that recognize autonomy and human dignity unleash enormous productive energy. This in turn leads to the mobilization of knowledge-sharing that is critical to innovation and localized problem-solving. Offering a wide range of interdisciplinary perspectives and specific examples from the field showing these ideas in action, this book provides NGOs, multilateral institutions, and donor countries with practical guidelines for implementing “dignity-first” development.

Compelling and engaging, with a wide range of recommendations for reforming development practice and supporting liberal democracy, this book will be an essential read for students and practitioners of international development.

It’s by Tom Palmer (one of my favorite scholars) and Matt Warner. Again the link is here.

James Madison continues to be underrated

d) While ethnic and linguistic fractionalization are associated with negative outcomes in terms of quality of government, religious fractionalization is not; in fact, if anything, this measure displays a positive correlation with measures of good governance. This is because measured religious fractionalization tends to be higher in more tolerant and free societies, like the United States, which in fact displays one the of the highest level of religious fractionalization. This result has no bearing, however, on the question of whether certain religious denominations are correlated with better politico-economic outcomes, an issue recently explored by Barro and McLeary (2002).

Woah. Here’s more:

Whether societal conflict is the result of fractionalization or polarization is largely an unresolved question in theory, calling for empirical work. The discussion of whether a country with many relatively small groups is more or less stable than one with only two equally sized groups is an old one, and goes back at least to Madison in the Federalist Papers of 1788 (nos. 10 and 11 see Hamilton et al., 1911). Without much of a stretch of Madison’s views, one can argue that a polarization measure is, according to him, the appropriate concept to capture heterogeneity.

Read the whole thing here (pdf).

Nightcap

  1. Cancel Neera Tanden Irfan Khawaja, Policy of Truth
  2. Magical thinking and economic growth Branko Milanovic, globalinequality
  3. The Bird Juan Cárdenas, Southwest Review
  4. On cosmopolitan humility and the arrogance of states (pdf) Luis Cabrera, ISPP

Nightcap

  1. The self-made British working class Helene Guldberg, spiked!
  2. India and the Mughal Empire William Dalrymple, Literary Hub
  3. On decolonization in Africa Sindre Bangstad, Africa is a Country
  4. Federalism in Europe, America, and Africa (pdf) Jörg Broschek, F&D

Nightcap

  1. What is the human being? Jon Stewart, Aeon
  2. Premature imitation and India’s flailing state (pdf) Rajagopalan & Tabarrok, TIR
  3. Is it time to strike back at empire? Tony Barber, Financial Times
  4. Adam Smith: a historical historical detective? Nick Cowen, NOL

Nightcap

  1. Gold buggers Nathan Lane, Los Angeles Review of Books
  2. The fractured land hypothesis (pdf) Koyama et al, NBER
  3. Territoriality and beyond (pdf) John Gerard Ruggie, Int’l Org
  4. Revenge of the nation-state Helen Thompson, New Statesman

Vacation links (Monday)

  1. Subnational Elections, Diffusion Effects, and the Growth of the Opposition in Mexico, 1984-2000” (pdf)
  2. Types of Federalisms, Good and Bad
  3. Structural Blockage: A Cross-National Study of Economic Dependency, State Efficacy, and Underdevelopment” (pdf)
  4. The Political Economy of Expulsion: The Regulation of Jewish Moneylending in Medieval England” (pdf)
  5. Why not world government?

Nightcap

  1. The subversive legacy of Christianity Helene Guldberg, spiked!
  2. Coronavirus in NJ: waiting for the surge Irfan Khawaja, Policy of Truth
  3. Thandika Mkandawire, RIP Isabel Ortiz, Jacobin
  4. The pandemic and the Will of God Ross Douthat, New York Times

Nightcap

  1. Russia’s brief encounter with the sexual revolution Daniel Kalder, UnHerd
  2. The strange death of libertarian England Chris Dillow, Stumbling & Mumbling
  3. Did Iran’s missile attacks carry message for the Kurds? Dana Menmy, Al-Monitor
  4. A happy family beach in Puerto Vallarta Jacques Delacroix, Liberty Unbound

Nightcap

  1. What if peasants do not want to move to cities? Branko Milanovic, globalinequality
  2. Mass underemployment Chris Dillow, Stumbling & Mumbling
  3. The prospects for Islamic State Patrick Cockburn, London Review of Books
  4. Slavery reparations revisited Irfan Khawaja, Policy of Truth

Nightcap

  1. Thoughts on the Battle of the Marne, 105 years later John Rossi, American Conservative
  2. The transformation of time Keerthik Sasidharan, Aeon
  3. The turn against motherhood Frank Furedi, spiked!
  4. In praise of Facebook Rachel Lu, the Week

Nightcap

  1. Emptying the Soviet bread basket Donald Rayfield, Literary Review
  2. The real sexism problem in Economics Victoria Bateman, Aeon
  3. Europe’s hard problem of capitalism or democracy Mark Mazower, New Statesman
  4. A new Gilded Age, or Old Normal? Luria & Zabala, American Affairs

Nightcap

  1. The nature and origins of modernity Brian Micklethwait, Samizdata
  2. If poverty is declining, why worry about inequality? Pranab Bardhan, 3 Quarks Daily
  3. 800 years of change in Hawaii and the Pacific Glyn Ford, Asian Review of Books
  4. Are we still living in Western Civilisation? Ananya Chowdhury, ASI

Mexican Productivity and Poverty: a Superficial, Street-Level View

I just spent three and a half weeks in Puerto Vallarta, Mexico (summer 2019). Below are some impressions. First things first; I have to give you the severe limits of my field of vision while I was there.

My wife and I stayed in an old-fashioned, 1950s low-rise hotel on the ocean with a pleasant faded kind of glory. (My wife Krishna does not let me go to Mexico by myself, for obvious reasons!) It was very hot throughout so, we did not go out much except that we had to shop for food every day at the mall across a broad avenue. We took taxis to and from the dentist about fifteen times. I always chat with taxi drivers; they gave us the foundation of sociology, I am sure! We spent a little time in the old touristy market district (where we have friendly acquaintances from past visits). We also walked some on Puerto Vallarta’s beautiful and interesting seafront (the “malecon”). I speak Spanish well, I understand everything in the language; I read it with ease. I read the paper a few times; I watched the Spanish language news on television a few times. I read free brochures on this and that.

There is much to like in Mexico, and especially Mexicans. They are low-key, unexcitable, stoical cordial, affable, and eager to help, and not only vis-à-vis this pleasant, well-disposed gringo, myself. Living for a short time in pleasant, clean Puerto Vallarta, it’s difficult to remember that Mexico’s homicide rate is three times the US rate. It takes the occasional sighting of a truckful of the new, nattily dressed National Guard with automatic weapons to jog your memory. (See notes from a previous visit: “Mexicans in Mexico,” 2017, )

Low productivity

My main observation is a repeat from what I recounted the last time I was there (See my “Mexican Underdevelopment: Pop-Sociology.”) It’s about productivity. For most of our stay, there was work going on on a brick path right beneath my windows. It was mind boggling. At one point, there were seven people working on the same two steps, including a master craftsman. They continued by restoring and cleaning a flat brick path. The thought stuck me that,in California, two, or two-and-a-half of the same Mexican workers (the very same guys) would have done the same work in the same time easily. And, yes, I know something about brick laying, both personally (I used to be very poor; now I am moderately poor), and as a customer. I am talking about a more than fifty per cent rise in productivity obtained by simply moving workers into a different environment. Bosses and economic leaders would easily kill for a change of such magnitude!

Of all the guys on the bricklaying and brick cleaning site, only one had a proper power tool, and it was only operational part of the time. The others labored by hand, mostly on their knees. No one had thought of giving them knee-guards. They had not themselves.

Moderate Poverty

The workers told me they were making about US$23 a day, or $115 for a forty-hour week. That’s not bad given that beginning professional positions – that require a university education – in thriving, manufacturing Monterrey are advertised for US$600 a month. Yet, and although most food, housing, gasoline, and health care are all cheaper in Mexico than in the US, this is still not much money on which to rear a family. But, this is also not dire poverty of the kind we used to see, and sometimes still find in India or in Africa. In that part of Mexico, everyone looks healthy, especially the children. Many adults are obese, more or less like in the US. Everyone is well dressed, by the admittedly low standards of central California where I live.

Over-staffing

Here is striking fact: Wherever you go, you find overstaffed shops, restaurants, etc, often very overstaffed. I mean like three shop attendants doing nothing in the middle of the afternoon. There must be a reasonable number of exceptions because my dentist’s office makes good use of its human resources. The same young women who serve as assistants, also act as receptionists. (I know, know, comparative advantage; don’t get me started, this is not the time or place.)

Productivity and Income

Over-staffing and the failure to provide workers with the best tools matter a great deal if you think, as I do, that incomes roughly follow productivity though often with big time lags, and often not in a linear fashion. Although employers sometimes fail to share the product of productivity gains with workers, the fact is that they cannot share gains that have not occurred. Low productivity pretty much guarantees low wages.

Note what I am not saying. The Mexican work ethic is not the problem. The guys who worked in the hot sun of tropical Mexico for eight hours a day don’t need lessons from anyone on that count. Also, those of us who live in California remember well the recession years when the vegetable picking lines remained nearly all-Mexican (with a handful of Filipinos) while poor Anglos lamented the absence of jobs. Now that wages in the field have increased substantially because of a chronic farm labor shortage, still few college students are flooding in, California sky-high rents or not.

Going back to fairly prosperous Puerto Vallarta, where construction is thriving (because of Canadian refugees from the cold, I am told), there is also the mysterious fact of the invisible zealot pounding stakes close to my hotel at 5:30 AM. I am not complaining. I respect this instance of unreasonable industriousness!

Social Structure and Productivity

Mexicans remain poor, the Mexican economy keeps growing but only slowly. This is, at least in part, I think, because Mexicans have normative standards that do not feed high productivity. These standard maintain a permanent social structure that makes increasing productivity difficult. A vicious/virtuous circle is at work. Labor is cheap because of its low productivity. It’s so cheap that, why not hire an additional worker for the same job? The incentive to hire nonchalantly is probably high because of Mexicans’ high connectivity. Mexicans, even in a fairly new city like Puerto Vallarta appear much more interconnected than Californians. (I don’t know much about the East Coast of the US.) There are many more individuals in one’s life there to please by giving their relatives and liege a job than is the case where I live.

Take the lifelong relationship of “compadre” and “comadre” between adults who are usually not kin to each other. The titles denote the link between a man and a woman who are respectively godfather and godmother to the same child. It easily multiplies by two or three beyond actual relatives the circle of individuals to whom one is to some extent obligated. And, it does not end there. Why, there is even a word in Mexican Spanish to denote the relationship of two people who have the same first name! I forgot the word but I was charmed to discover that I was ##### to any number of “Diegos.” I can even imagine situations where someone would succeed in using that tenuous link to extract a small favor from me (with a probable intention to reciprocate).

High Connectivity not a Specific Feature of Mexico, and Over-Staffing

I don’t think this high connectivity is an idiosyncratic feature of Mexican society. I believe rather that something similar prevails in India (that I know a little). It seems to me that high connectivity was visible also, in rural Brittany when I was a child in the forties and fifties. It was largely absent in Paris by contrast where I lived most of the time (Order my book of socio-historical memoirs of that period: I Used to Be French: An Immature Autobiography; avoid the middle person, go through me.). Having obligations to few rather than to many is a salient feature of modernity (that includes also urbanization, small nuclear families, and a search for formal education).

I speculate that Mexicans, even in comparatively modern places like Puerto Vallarta, have a high tolerance for over-staffing because of the large social networks within which they exist. Over-staffing is thus a primary contributor to low productivity. Low productivity keeps many people poor. Poor people need a supportive network more than do the more prosperous. Long and short of it: to break the cycle would require a degree of de-humanization of Mexican society. It’s not inexorable. Mexicans may collectively choose a bearable level of poverty (see life expectancy below) over the destruction of the emotional comfort larger social networks promote.

Not Following in the Footsteps….

It seems to me that a high degree of familiarity with the negative example of American society next door with its low connectivity – in places – may guide them toward such a choice. In point of fact, I have met a strikingly large number of Mexican men who had worked in the US for several years and who had returned home under their own power, by choice, according to their narratives. (I also note with satisfaction that ten years ago, S. Nikiforov and I had evoked precisely that sort of preference in a big article on Mexican immigration: “If Mexicans and Americans could cross the border freely,” in The Independent Review, 14-1: 101-133 [Summer] 2009.)

There is no law of nature that requires the people of less developed countries to retrace all the steps of their predecessors in development. The cellphone shows us that often, they don’t have to: Several African countries have phone landlines only in the center of their major city but 80% of their population has access to a cellphone. Trying to skip stages is the rational thing to do, of course. I would guess it’s most successful when it depends largely on a myriad of individual decisions, as with cellphones. Nevertheless, it seems to work pretty well – for some reason – even with collective decisions regarding health care, specifically.

Perhaps, societies can pick and choose what features of modernity they actually want thanks to a density of available information and a richness in inter-communications that was unimaginable forty years ago. (That was when I was studying underdevelopment with rigorous methods.) I can picture a partial national consensus forming that says, “We don’t need everything the big guys have; a little bit more of this and of that, and we are OK.” If this scenario is realistic, food, schooling, and health care will probably be its dominant themes. The Mexican food situation appears fine (I will consider contradiction on this.). In my subjective judgment, based on its products, on the average, Mexican K-12 is superior to its American public counterpart.

Illness and Health care

One component of socio-economic underdevelopment and also an obstacle to development in its own right used to be widespread illness. The morbidity figures I saw in the seventies about the situation in the fifties were horrifying. Illness also obstructed development indirectly because it destroyed family units through the death of parents or older siblings, even of aunts and uncles who might have provided. This is largely in the past. The present in poor countries is very different, greatly improved from the narrow standpoint of health. And, it turns out, the Mexican health picture, in particular appears fairly bright.

Single Payer Health Care

Something to think about for my conservative friends: Mexico has single payer healthcare for those who want it. It has a pretty poor reputation, it’s true. A private health network subsists side-by-side with it for the prosperous. (I like that.) Yet, yet, the life expectancy of Mexicans is only 2.6 years lower than that of Americans, same as the difference between the US and the Netherlands (WHO 2015, in Wikipedia). Americans live longer than Mexicans in the same proportion as the Dutch live longer than Americans. So, either, it’s possible to get fairly similar results health-wise at much lower cost than do Americans, or health care does not matter all that much, as far as not dying is concerned. (Hate to twist the knife in the conservative wound but the Dutch also spend much less money than Americans on their health care.)

Incidentally, I am well aware that there are non-economic arguments against entrusting what is now 17% of the US GDP to the government, to any government. But, perhaps, conservatives should restrict themselves to combating govt. health care on political and principle grounds alone. (End of digression.)

Where To?

So, where am I going with this, you may fairly ask? I am expressing my doubts that Mexican society – and other less developed societies – will be forced to undergo the dislocating social change that would be required to improve much its (their) productivity, according to the old schemes. I have to stop here, more or less, but it seems to me that Mexico is more likely to improve first its societal-level productivity by having more women join the work force. The preservation of a high existing level of connectivity – with its baked-in child care and food services – would ease, and facilitate such mass social change, of course.