Monday’s Vintage Whines

  1. Brilliant metal puns shall not be forgotten
  2. I generally like Noah Smith’s economics made simple explanations and have read him since his old blog days (I still check his substack, and Bloomberg, pieces)
Skyclad rocked (never got interested in their pagan tendencies and gibberish fonts, though) – Source

So, NS reposted The liberty of local bullies, a decade-old critique of libertarianism (using, in perfect economist style, a completely libertarian world as the basic assumption). I am sure almost everything is already said and done (late to the party!), but here goes anyway (from “theoretical” to “real-world” order):

  1. Those cartels that will push anyone not to their liking aside would not necessarily be invincible. Cartels/ trusts/ consortia/ whatever (probably) use government regulations to dig-in even more solidly. Take away the government’s heavy hand, and they get more exposed to competition.
  2. The high transaction costs of moving/ working elsewhere also go the same way.
  3. Liberal thought is not blind to misuses of private power (the usual quote here being *the* Adam Smith). Αt least one European liberal strand requires active trust-busting policies as a prerequisite for protection against such consolidations (ordoliberalism of 1930s-50s). Also, the mother of legislative trust-busting, the US Sherman Act of 1890, was signed by a Republican President. Since NS hedges as he gears his offensive to American expressions of the liberty creed, I am at a loss if this law could claim a liberal (libertarian?) root.

Asking questions about women in the academy

Doing the economist’s job well, Nobel Laureate Paul Romer once quipped, “means disagreeing openly when someone makes an assertion that seems wrong.”

Following this inspirational guideline of mine in the constrained, hostile, and fairly anti-intellectual environment that is Twitter sometimes goes astray. That the modern intellectual left is vicious we all know, even if it’s only through observing them from afar. Accidentally engaging with them over the last twenty-four hours provided some hands-on experience for which I’m not sure I’m grateful. Admittedly, most interactions on twitter loses all nuance and (un)intentionally inflammatory tweets spin off even more anger from the opposite tribe. However, this episode was still pretty interesting.

It started with Noah Smith’s shout-out for economic history. Instead of taking the win for our often neglected and ignored field, some twitterstorians objected to the small number of women scholars highlighted in Noah’s piece. Fair enough, Noah did neglect a number of top economic historians (many of them women) which any brief and incomprehensive overview of a field would do.

His omission raised a question I’ve been hooked on for a while: why are the authors of the most important publications in my subfields (financial history, banking history, central banking) almost exclusively male?

Maybe, I offered tongue-in-cheek in the exaggerated language of Twitter, because the contribution of women aren’t good enough…?

Being the twenty-first century – and Twitter – this obviously meant “women are inferior – he’s a heretic! GET HIM!”. And so it began: diversity is important in its own right; there are scholarly entry gates guarded by men; your judgment of what’s important is subjective, duped, and oppressive; what I happen to care about “is socially conditioned” and so cannot be trusted; indeed, there is no objectivity and all scholarly contribution are equally valuable.

Now, most of this is just standard postmodern relativism stuff that I couldn’t care less about (though, I am curious as to how it is that the acolytes of this religion came to their supreme knowledge of the world, given that all information and judgments are socially conditioned – the attentive reader recognises the revival of Historical Materialism here). But the “unequal” outcome is worthy of attention, and principally the issue of where to place the blame and to suggest remedies that might prove effective.

On a first-pass analysis we would ask about the sample. Is it really a reflection of gender oppression and sexist bias when the (top) outcome in a field does not conform to 50:50 gender ratios? Of course not. There are countless, perfectly reasonable explanations, from hangover from decades past (when that indeed was the case), the Greater Male Variability hypothesis, or that women – for whatever reason – have been disproportionately interested in some fields rather than others, leaving those others to be annoyingly male.

  • If we believe that revolutionising and top academic contributions have a long production line – meaning that today’s composition of academics is determined by the composition of bright students, say, 30-40 years ago – we should not be surprised that the top-5% (or 10% or whatever) of current academic output is predominantly male. Indeed, there have been many more of them, for longer periods of time: chances are they would have managed to produce the best work.
  • If we believe the Greater Male Variability hypothesis we can model even a perfectly unbiased and equal opportunity setting between men and women and still end up with the top contribution belonging to men. If higher-value research requires smarter people working harder, and both of those characteristics are distributed unequally between the sexes (as the Greater Male Variability hypothesis suggests), then it follows naturally that most top contributions would be men.
  • In an extension of the insight above, it may be the case that women – for entirely non-malevolent reasons – have interests that diverge from men’s (establishing precise reasons would be a task for psychology and evolutionary biology, for which I’m highly unqualified). Indeed, this is the entire foundation on which the value of diversity is argued: women (or other identity groups) have different enriching experiences, approach problems differently and can thus uncover research nobody thought to look at. If this is true, then why would we expect that superpower to be applied equally across all fields simultaneously? No, indeed, we’d expect to see some fields or some regions or some parts of society dominated by women before others, leaving other fields to be overwhelmingly male. Indeed, any society that values individual choice will unavoidably see differences in participation rates, academic outcomes and performance for precisely such individual-choice reasons.

Note that none of this excludes the possibility of spiteful sexist oppression, but it means judging academic participation on the basis of surveys responses or that only 2 out of 11 economic historians cited in an op-ed were women, may be premature judgments indeed.

Free Trade and Labor Market Displacement

A few days ago, I saw Noah Smith’s piece on free trade and why opening up with China may have yielded some undesirable results. In essence, his argument is that labor market adjustments have been slow. It created a small storm in the economics blogosphere. I wanted to reply earlier. I did not and I regret that. However, better late than never. So here are my three key reactions to the piece written by Smith (see his blog here).

  1. Slow labor market adjustments are not a cause of free trade: If anything, they are the results of a series of government intervention. Countries like Denmark, which may have large governments combined with fewer regulations on businesses, are very well able to adapt to free trade. The ability to start businesses is basically the ability to properly channel inputs towards more valued output. If you prevent an entrepreneur from doing just that while you open your borders to more efficient producers, it is quite obvious that free trade could be “less” beneficial. This point can be well seen in the role of states with “right to work (RTW) laws”. Although there is a debate as to whether or not RTW laws increase wages (James Sherk at Heritage says yes, the good people at the Employment Policy Institute say no and I say that both don’t get it, we should care about regionally adjusted real wage growth), it does seem that it helps industrial activity while boosting employment levels (see here too).  Unions would hinder adjustments to changes in trade patterns. In fact, its worth pointing out that of the 11 states that had RTW laws before 1948 – in only three of those states did the income share of the top 10% exceed that on the whole United States (see the data here) in 2013. While the entire country has seen an increase in income inequality, the RTW states have seen the share of all income of the top 10% increase by only 26% (1947 to 2013) compared to 42% nationwide. This suggests that RTW laws are probably helping workers adjusts to changes caused by free trade (otherwise, there would be a state-level increase in inequality). This finding seems to conform to large section of the literature on the links between RTW and inequality (here and here).  I am sure that if the Autor, Dorn and Hanson study (on which Noah Smith relies) was to be redone with attempts to control for right to work laws, the effect would be concentrated in non-RTW states. Thus, if the problem is labor laws, don’t blame free trade for the poor adjustments!
  2. Nobody said that free trade was “costless” to adapt to. I do economic history. I see cases of industries being protected for decades. Protectionism not only raise prices, but it changes relative prices between different inputs. It incites the adoption of an artificially profitable production method. It is profitable to do so, but it is by no means the most efficient approach. It was made profitable only by the artifice of regulation and duties. Once you eliminate that artifice by removing the barriers, you still have “time to build” problem and a need to change production methods. That takes time. However, governments are very good at making sure this takes more time than needed (see point 1)
  3. Trade agreements with China are not free trade agreements: this is the point I keep repeating (and the point that actually make Paul Krugman interesting), free trade agreements should normally fit on a napkin. If it takes 10,000 pages, it is free trade with 10,000 exceptions. Noah Smith should realize that he may be looking at a case of such “managed trade”.

That’s all folks!

Some introductory links

It’s a great privilege and honor to be invited to write at Notes On Liberty. Brandon’s invitation for me to join the team actually came as something of a pleasant surprise, since my economic politics tend to fall pretty far to the left of the consensus here. I cast a straight libertarian ticket in the 2000 general election (the first election in which I was eligible to vote) and I voted for Gary Johnson last year, but I much more often vote for Democrats, generally because I find the social and civil liberties policies advanced by their Republican opponents absolutely frightening and the economic policies advanced by their Libertarian opponents naive, unduly dogmatic and hence unfeasible.

That said, I believe I’m what one of my favorite bloggers, Fabius Maximus, usually regards less as an accurate self-description than as a self-serving pretension: a true nonpartisan. Fabius occasionally posts survey data indicating that the incidence of nonpartisanship in the electorate is exaggerated, an exaggeration that he attributes largely to voters’ desire to be hip. By contrast, one of my most common reactions to the two major US political parties (probably to the annoyance of many of my Facebook friends) is that they’re both overdue for the federal death penalty, and that there’s room for both of them on the prison van to Terre Haute. There’s a certain facetiousness and poetic license to my peddling of this imagery, but it does not exaggerate the disgust and exasperation that I all too often have with the behavior of both parties, and especially that of their leaders.

I’ll probably have more on that theme in future posts. Tonight, however, I’m going to devote the rest of this post to links that I’ve found inspirational, resonant, or too ghoulish to resist, from various corners of the internet. The only caveat is that the links are going to have a more disjointed appearance than they would in a standard list format; I like to provide some context for links that I include in my writing, especially since the links themselves can be longer than some readers have time to read, so tonight I’ll be providing a synopsis for each.

Fabius Maximus

Fabius Maximus is the pseudonym of a geopolitics blogger who, as far as I can tell, is based in the Washington, DC area and employed in something pertinent to the federal government, although he is extremely coy about himself. His tone can be authoritative and brash, rather like a less screechy literary version of John McLaughlin, and he can be very cynical. But cynicism, I’d say, is warranted in times such as ours, particularly as an antidote to the saccharine earnestness that many mainstream journalists and commentators seem to regard as the only appropriate approach to the world.

The liberty of local bullies

This piece by Noah Smith is one of the most provocative broadsides on Ron Paul and libertarianism that I’ve found. It takes a more strident tone than I’d be inclined to take, but I have to support any essay that includes the phrase “my freedom to punch you in the face curtails quite a number of your freedoms.” That’s a pretty succinct articulation of one of my longstanding critiques of the libertarian movement and likeminded classically liberal movements abroad: that they all too often ally themselves with thieves and other unsavory, predatory characters. These unholy alliances strike me as a big reason that libertarianism has such trouble gaining popular traction as an alternative to the two-party status quo, manifested by the tendency of Libertarian Party candidates to win less than five percent of the vote in three-way contests. This is a very unfortunate situation, if for no other reason because libertarians are damn near the only people willing to take a serious stand against the erosion of civil liberties in the United States.

The Lazarus File

A Case So Cold It Was Blue

Dateline NBC, formerly a respectable news magazine, has taken to devoting Friday nights to lengthy reviews of sordid murders, a great thing for those of us who find that Keith Morrison’s hushed tones and ever more skeletal face appeal to our dubiously maudlin tastes. I don’t see why I shouldn’t do the same, especially for a case involving Brandon’s fellow Bruin, LAPD Detective Stephanie Lazarus.

I actually don’t remember whether I’ve ever seen a Dateline NBC special on Lazarus or just saw the 48 Hours version, but the pieces above, in the Atlantic and Vanity Fair, respectively, are better in any event. (I can’t exactly recommend my own television viewing habits.) The Lazarus case wasn’t spectacular just because the suspect (since convicted and sentenced to 27 years to life in prison) was a highly regarded police detective. The intricacy and sensitivity of the investigation were also far beyond what I’ve ever seen a broadcast account do justice. The investigation was started by a cold case squad at the Van Nuys Division (in the provinces by LAPD standards) before being reassigned to the Robbery-Homicide Division, the elite squad at LAPD headquarters that is responsible for high-profile murder investigations. That posed an even touchier problem: Stephanie Lazarus worked across the hall from RHD at Parker Center and was friendly with many of the division’s detectives. The detectives ultimately chosen for the case, Dan Jaramillo and Greg Stearns, were in effect chosen because they were out of the loop socially. (Judging from their portrait in Vanity Fair, Det. Stearns is also out of the loop sartorially, and proudly so. The portrait suggests that those two are classics, and know it.) On the morning of the arrest, teams were posted in Simi Valley, Lazarus’ hometown, with sealed envelopes instructing them to execute search warrants on her house and car. One of their colleagues surreptitiously trailed Lazarus downtown on a Metrolink train. It was the LAPD at its best, in contrast to the original investigation of Sherri Rae Rasmussen’s murder, which was the LAPD at its most incompetent. Lyle Mayer, the lead detective in the original investigation, will be forever remembered as the idiot who let a murderer stick around at the LAPD for another 23 years after telling her victim’s father that he watched too much TV. (Unless he was crooked. Reasonable people disagree on this point.)