Nightcap

  1. The strange relationship between virtue and violence Barbara King, Times Literary Supplement
  2. Nixon’s path to peace included bombing Cambodia Rick Brownell, Medium
  3. The suboptimality of the nation-state Branko Milanovic, globalinequality
  4. The threshold of land invasion Nick Nielsen, Grand Strategy Annex

RCH: Annexation of the Hawaiian islands

That’s the topic of my latest over at RealClearHistory. An excerpt:

That is to say, there are theoretical lessons we can draw from the American annexation of Hawaii and apply them to today’s world. The old Anglo-Dutch playbook turned out to serve American imperial interests well, especially when contrasted with the disastrous Spanish-American War of 1898, when the United States seized the Philippines, Cuba, Guam, and Puerto Rico from Spain in an unwarranted act of aggression. Hawaii, now an American state, has one of the highest standards of living in the world (including for its indigenous and Japanese citizens), while the territories seized by the U.S. from Spain continue to wallow in relative poverty and autocratic governance.

Please, read the rest.

Forging ahead, falling behind and fighting back: British economic growth from the industrial revolution to the financial crisis

Nick Crafts can be viewed as the doyen of British economic history. His major publications date back to the 1970s – a favorite of mine is this piece from 1977 on the role played by chance in determining whether the Industrial Revolution would occur in England or France.  He is also the joint author of the Crafts-Harley interpretation of the Industrial Revolution.  But, perhaps because the majority of his research focuses on British economic history, he remains highly underrated outside of the UK.  His new book Forging ahead, falling behind and fighting back: British economic growth from the industrial revolution to the financial crisis summarizes much of his research.

I’ve reviewed it for the Economic History Review. But given the whims of academic publishing, it may be a long time until my review appears in print so I’ve decided to post a preview of my draft below.

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Why was Britain the first industrial nation and the workshop of the world? Why was it eventually caught up and overtaken? Why once it had fallen behind the United States, did it fall further behind its European rivals in the Post-War period? And how did it recover its relative position in the 1980s and 1990s? All these questions are addressed in Nicholas Crafts’s slim new book.

In Forging ahead, falling behind and fighting back, Crafts provides a macroeconomic perspective on the British economy from 1750 to today. The word macro is advisory. Crafts surveys the British economy from 1000 feet, through the lens of growth theory and growth accounting. The upside of this approach is that he delivers a lot of insight in a small number of pages. Readers looking for discussions of individual inventors, innovations, politicians, or discussion of specific policy decisions can look elsewhere.

The first part of the book provides an overview of the Crafts-Harley view of the British Industrial Revolution. This view emphasizes the limited scope of economic change in the early 19th century. On the eve of the Industrial Revolution, the British economy already had a comparatively modern structure, with many individuals working outside agriculture. Growth between 1770 and 1850 was highly reliant on a few key sectors and TFP growth was modest (0.4% a year). Most workers remained employed in traditional sectors of the economy. It took until the second half of the 19th century for the benefits of steam, the general purpose technology of the age, to fully diffuse through the economy. Nonetheless, from a long-run perspective, the achievements of this period, a small but sustained increases in per capita GDP despite rapid population growth, were indeed revolutionary.

An important theme of the book is institutional path dependency. Characteristics of Britain’s early position as an industrial leader continued to shape its political economy down to the end of the 20th century. Crafts mentions two interesting instances of this. First, Britain’s precocious reliance on food imports from the early 19th century onwards left a legacy that was favorable of free trade. Elsewhere in the world democratization in the late 19th century often led to protectionism, but in Britain, it solidified support for free trade because, after the expansion of the franchise, the median voter was an urban worker dependent on cheap imported bread. Second, industrial relationships were shaped the nature of the economy in the 19th century. Britain thus inherited a strong tradition of craft unions that would have consequences in conflicts between labor and capital in the 20th century.

The second part of the book considers the late Victorian, Edwardian, and inter-war periods. It was in the late 19th century that the United States overtook Britain. A venerable scholarship has identified this period as one of economic failure. Crafts, however, largely follows McCloskey in exonerating Edwardian Britain from the charge of economic failure. The presence of fierce competition limited managerial inefficiencies in most areas of the economy; though there were notable failures in sectors where competition was limited such as the railways. The main policies errors in this area were thus ones of omission rather than commission: more could have been done to invest in R&D and support basic science – an area where the US certainly invested in more than the UK.

The seeds of failure, for Crafts, were sown in the interwar period. Traditionally these years have been viewed relatively favorably by economic historians, as the 1930s saw a shift away from Industrial Revolution patterns of economic activity and investment in new sectors. However, in a comparative light, TFP growth in the interwar period was significantly slower than in the US. The new industries did not establish a strong export position. This period also saw the establishment of a managed economy, in which policymakers acceded to a marked decline in market competition. Protectionism and cartelization kept profits high but at a cost of long-run productivity growth that would only be fully revealed in the post-war period.

Most economic historians view the postwar period through the lens of Les Trente Glorieuses. But in Britain, it has long been recognized that this was an era of missed opportunities. Simple growth accounting suggests that Britain underperformed relative to its European peers. Thus though the British economy grew faster in these years than in any other period; it is in this period that Britain’s relative failure should be located.

Crafts examines this failure using insights from the literature on “varieties of capitalism” which contrasts coordinated market economies like West Germany with liberal market economies like the United States or Britain. In the favorable conditions of postwar recovery and growth, coordinated market economies saw labor cooperate with capital enabling both high investment and wage restraint. Britain, however, lacked the corporatist trade unions of France or West Germany. As a legacy of the Industrial Revolution, it inherited a diverse set of overlapping craft unions which could not internalize the benefits of wage restraint and often opposed new technologies or managerial techniques. Britain functioned as a dysfunctional liberal market economy, one that became increasingly sclerotic as the 1960s passed into the 1970s.

An important insight I got from this book is that government failure and market failure are not independent.  Examples of government failure from the postwar period are plentiful. Industrial policy was meant to “pick winners.” But “it was losers like Ross Royce, British Leyland ad Alfred Herbert who picked Minsters” (p. 91). Market power became increasingly concentrated. Approximately 1/3 of the British economy in the 1950s was cartelized and 3/4 saw some level of price fixing. Britain’s exclusion from the EEC until the 1970s meant that protective barriers were high, enabling inefficient firms and managerial practices to survive. High marginal rates of taxation and weak corporate governance encouraged managers to take their salary in the form of in-kind benefits, and deterred innovation. Labor relations became increasingly hostile as the external economic environment worsened following the end of Bretton Woods.

Britain recovered its relative economic position after 1979 through radical economic reforms and a dramatic shift in policy objectives. Though of course, the Thatcher period saw numerous missteps and policy blunders, what Crafts argues was most important was that there was an increase in product market competition, a reduction in market distortions, and a reduction of trade union power, factors provided the space that enabled the British economy to benefit from the ICT revolution in the 1990s.

Rarely does one wish a book to be longer. But this is the case with Forging Ahead, Falling Behind, and Fighting Back. In particular, while a short and sharp overview of the Industrial Revolution is entirely appropriate, given the number of pages written on this topic in recent years, the last part of the book does need extra pages; the argument here is too brief and requires more evidence and substantive argumentation. One wishes, for instance, that the theme of institutional path dependency was developed in more detail. Despite this, Forging Ahead, Falling Behind, and Fighting Back is a notable achievement. It provides a masterly survey of British economy history tied together by insights from economic theory.

BC’s weekend reads

  1. Path-dependence of measuring real GDP?
  2. Technological creativity and the Great Enrichment (h/t Federico)
  3. The deadly serious accusation of being a “so-called judge”
  4. Why Congress isn’t reigning in Trump
  5. How did Germany and Austria’s elite musical institutions navigate the vicissitudes of early 20th-century European history? (review)
  6. Western nationalism and Eastern nationalism

The legacy of autocratic rule in China

What is the long-term legacy of political persecutions? Here I want to present the main findings of my recent research with Melanie Meng Xue (UCLA Anderson). Our research is an attempt to undercover how a legacy of political persecution can shape social capital and civil society by studying imperial China. The full version of the paper is available here.

We know from other research that particular institutions, policies, and events can have a detrimental and long-lasting impact on economic and political outcomes (e.g. Nunn 2011, Voigtländer and Voth, 2012). But it is hard to find a setting where we can study the long-run impact of autocratic institutions. A key feature of autocracy is the use of persecutions to intimidate potential opponents. In our paper, Melanie and I argue that the intensification of imperial autocracy that took place in the High Qing period (1680-1794) provides an ideal setting to study the impact of such persecutions.

Qing China

The High Qing period was one of great political stability, imperial expansion, and internal peace. Economic historians like Bin Wong and Ken Pomeranz have shown that China possessed a flourishing market economy during this period; it experienced Smithian economic growth and a massive demographic expansion. Rulers such as the Kangxi (1661-1722) and Qianlong Emperors (1735-1794) are seen as among the most successful in Chinese history. Nevertheless, as ethnic Manchus, these rulers were extremely sensitive to possible opposition from the Han Chinese. And during this period Qing tightened control over the gentry and implemented a policy of the systematic persecution of dissent. (Figure 1 depicts the Manchu conquest of China.)

chinamingqing
The Qing conquest of China

The Literary Inquisitions

The focus of our paper is on the impact of persecutions conducted by Qing China against individuals suspected of expressing disloyalty. We study the impact of these state-orchestrated persecutions on the social fabric of society. This allows us to speak to the kinds of concerns that authors like Hannah Arendt and George Orwell expressed about the long-run impact of totalitarianism in the 20th century.

These persecutions are referred to by historians as ‘literary inquisitions’. Existing scholarship suggests that the resulting fear of persecution elevated the risks facing writers and scholars, and created an atmosphere of oppression and a culture of distrust which deterred intellectuals from playing an active role in society. But these claims have never been systematically investigated. Putting together several unique datasets for historical and modern China, we explore the impact of literary inquisitions on social capital in Qing China and trace its long-run impact on modern China through its effect on cultural values.

spence
Jonathan Spence provides an excellent account of one of the most famous and unusual inquisition cases in his book Treason by the Book

To conduct our analysis, we use data on 88 inquisition cases. We match the victims of each case (there are often multiple victims per case) to their home prefecture. This data is depicted in Figure 1. Since prefectures varied greatly in their economic, social, and political characteristics we conduct our analysis on a matched sample. This ensures that the prefectures “treated” by a literary inquisition are similar in terms of their observables to those we code as “untreated”. As our data is a panel, we are able to exploit variation across time as well as variation in space.

While individuals could be persecuted for a host of reasons, these were all but impossible to anticipate ex ante. Cases were referred to the emperor himself. Frederic Wakeman called this “the institutionalization of Imperial subjectivity.” The standard punishment in such cases was death by Lingchi or (slow slicing) and the enslavement of all one’s immediate relatives. In some cases, however, the guilty party would be executed by beheading. These persecutions aimed to deter opposition to Qing rule by signaling the ability of the Emperor to hunt down all potential critics or opponents of the regime.

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The Impact of Literary Inquisitions on Social Capital

We initially focus on the impact of persecution on the short and medium-run using our historical panel. We first examine the effects on the number of notable scholars.  In our preferred specification we find that a literary inquisition reduced the number of notable scholars in a prefecture by 33 percent relative to the sample mean.

We go on to show the effect of persecutions on collective participation among the gentry in China. Our measure of collective participation in civil society is the number of charitable organizations. Charitable organizations played an important role in premodern China providing disaster relief and local public goods such as repairing local roads. They were non-governmental organizations and played an important role alongside the government provision of disaster relief. In our preferred empirical specification, we find that a persecution number of charitable organizations by 38 percent relative to the sample mean.

These results are in keeping with the argument that literary inquisition had a major psychological impact on Chinese society. They are consistent with the rise of “inoffensive” literary subjects during the Qing period that have documented by historians. To reduce the risk of persecution, intellectuals scrupulously avoided activities that could be interpreted as constituting an undermining of Qing rule. Instead they “immersed themselves in the non-subversive “sound learning” and engaged in textual criticism, bibliography, epigraphy, and other innocuous, purely scholarly pursuits” (Wiens, 1969, 16).

The Impact of Literary Inquisitions on 20th Century Outcomes

We go on to examine how the effects of these persecutions can be traced into the 20th century. In particular, we focus on the provision of basic education at the end of Qing dynasty. In late 19th and early 20th century China, there was no centralized governmental provision of primary schools.  Basic education remained the responsibility of the local gentry who ran local schools.

Thus the provision of education at a local level was dependent on the ability of educated individuals to coordinate in the mobilization of resources; this required both cooperation and trust. We therefore hypothesize that if the persecution of intellectuals had a detrimental impact on social capital, it should also have negatively affected the provision of basic education.

We find that among individuals aged over 70 in the 1982 census – hence individuals who were born in the late Qing period – a legacy of a literary inquisition is associated with lower levels of literacy. This reflects the impact of literary inquisition on the voluntary schools provided by the gentry and is not associated with lower enrollment at middle school or high school. We show that result is robust to controlling for selective migration and for the number of death caused by the Cultural Revolution.

Finally, we show that literary inquisitions generated a cultural of political non-participation. Drawing on two datasets of political attitudes – the Chinese General Social Survey (CGSS) and the Chinese Political Compass (CPoC) – we show that individuals in areas in which individuals were targeted during literary inquisitions are both less trusting of government and less interested in political participation.

Finally, we find that individuals in prefectures with a legacy of literary inquisitions are less likely to agree that: “Western-style multi-party systems are not suitable for China” (Q 43.). This suggests that in areas affected by literary inquisitions individuals are also more skeptical of the claims of the Chinese government and more open to considering alternative political systems. Similarly, individuals in affected prefectures are more likely to disagree with the statement that: “Modern China needs to be guided by wisdom of Confucius/Confucian thinking.”

In summary, our analysis suggests that autocratic rule reduced social capital and helped to produce a culture of political quietism in pre-modern China. This has left a legacy that persisted into the 20th century. These findings have implications for China’s current political trajectory. Some scholars anticipate China undergoing a democratic transition as it’s economy develops (Acemoglu and Robinson, 2012). Others point to China as an example of “authoritarian resilience.” By showing that a long-history of autocratic rule and political persecutions can produce a culture of political apathy, our results shed light on a further and previously under-explored source of authoritarian resilience.

What makes it science?

When I hear the phrase “I experimented with drugs/diet/habit/whatever [on myself],” I tend to call bullshit. (A good exception is the author at Gwern.net who does blind, randomized trials on himself sometimes.) Without a control group you aren’t doing an experiment.

But I heard some interesting phrasing that is making me reconsider. Scott Adams was talking about experimenting with changes to his diet by isolating one thing and seeing if he can observe a change after a week. It’s clear that he understands the limitations of this approach. And that clarity makes me think that he’s really properly experimenting. He’s not going so far as running a double-blind study, he’s just taking a serious look at imperfect evidence and being epistemically honest.

Like any good scientific thinker of our time, Adams knows that the outcomes he observes can be affected by any number of variables he’s failed to account for. He knows that his estimates need an error term. He almost certainly knows that time isn’t on his side and ever so slightly affects his results. He almost certainly also knows that path-dependency plays a role. But he corrects for all that in his interpretation. It’s this considered approach to the evidence that makes me view him as operating on a scientific basis. So even if his trials do not provide powerful evidence, his interpretation and application of the evidence is what makes it science.

I suppose this would mean that an experiment can’t be considered scientific until the data is interpreted.

And of course all of this is to say that he’s definitely right about Donald Trump.

Fourteen-Year Old Girl in Bikini Threatens Armed Cop

For those of you, my conservative friends, who believe police brutality is just a collection of deliberate made up tales, there is a video on the major cable networks today I hope you see.

It shows a normal size adult in a blue or black uniform putting his knee in the back of a fourteen-year old girl in a bikini to force her down. The girl is crying out for her Mamma. The same cop then draws his gun on a couple of teenage boys in swim shorts who are trying to help the girl. There are other teenagers around, all in swimming attire where one couldn’t hide a weapon. Does the cop think they are going to gang up on him and beat him to death? It’s difficult to see how his life is threatened. In fact, it’s impossible.

A private person gave a pool party on a hot day. Although I understand it took place in a semi-public pool, it was by invitation only. Predictably, some teenagers tried to crash the party. Someone called the police. At that point no blows had been struck; there may have been no violence. I say “may” because, according to some reports but not all, some girls had been pulling one another’s hair. The horror! Cat fights used to be considered free entertainment. The cops who first arrived felt out of their depth and apparently lost their cool and quickly became the worst threat to citizens‘ safety anywhere around.

This is the point where the media and everyone should ask the obvious question:

Suppose the cop had retreated and done nothing? What would be the worst case scenario. Answer 1: Uninvited teenagers swimming in a public pool that had been reserved. Answer 2: Possibly some hair pulled off. (When was the last time a teenage girl did serious damage to another with her bare hands? The stereotype is right: Girls don’t know how to fight.)

Is there an alternative universe where avoiding these calamities is worth brutalizing a young girl and pulling a gun on boys in bathing suits?

Is it even likely that the use of pepper spray was justified? Yes, I am double-guessing the cops on the scene. It’s becoming easier thanks to amateur video. If the cop who pulled his gun is unable to restrain himself or if he does not have the good judgment to do it, he shouldn’t be in charge of protecting us. Yes, that simple!

Was what I saw on the video a racial incident? I don’t think so although the main cop was white and the teenagers black. Likewise, when I see a white man sell a used tool to a black man at the flea market, I don’t think of it as a “racial transaction.” The assertion that white cops kill black men because white cops (and society in general) are racist is a simplistic idea invented and sustained by the scum sliver fringe of the dying civil rights movement to prolong its unearned privileges (including not paying millions of dollars in owed taxes).

I won’t believe that racial animus presides over the shooting of black men or any other kind of brutalization of black people by police until I see appropriate comparative figures: How many whites shot by white cops, how many blacks killed by black cops, etc. This would have to take into account the superior propensity of black to commit crimes. The number exists; the study is not difficult to do; any sociologist, any statistician could do it. The fact that it has either not been done or not publicized speaks to me of massive censorship, or self-censorship, of paralyzing political correctness.

The cop who put his knee in the middle of the back of a fourteen-year old girl may not be a racist; as I said; I think he is probably not. He just should not be a police officer. Given that he is a veteran, it’s not his training that’s defective, it’s him. Perhaps he should not have ever been on any force to begin with. Perhaps he has been on the job too long. If it’s the latter, I am guessing union rules prevent his superiors from doing anything about it or even from noticing that something is awry with that guy. Whatever is the case, the man is not a protector, he is a public danger.

He does not belong on the street with a gun but working in a church basement at something innocuous. His working buddies could be, for example, young women who think a smile is sexual harassment and a tap on the shoulder, rape. They deserve one another.

And, I can already hear it from my conservative friends: Peace officers have a tough job, blah, blah! You have to understand, blah, blah! Not so; the market tells the truth. There is is no shortage of police recruits nationwide. People are flocking to the job. The California Highway Patrol is currently recruiting young interns. Candidates must have no drug conviction (which does not make much sense if you think about it). They must have at least a 2.00 GPA in high school. Let me think, with grade inflation that would be a D- or an F+?

In the meantime, the Santa Cruz Sheriff is offering $5,200 a month for trainees with an immediate raise following graduation from the police academy. High school diploma required, or an associate degree. (There are also tests but…) Good time to weed out the inept and the used up. Or, the selection standards could be changed: You might go easier on the brawn and become more demanding on self-control and on ordinary common sense.

And, by the way, I hate affirmative action but…. (I hate it because it gave us among other things, the current Fascist-leaning administration that is also inept.) Yet, I don’t have trouble imagining that female cops may possess a superior ability to defuse potentially explosive situations. I believe that, in daily police practice, there are many cases where small physical size and low testosterone are assets.

There is no – I repeat – no reason to tolerate police brutality. Conservatives are morally bound to distrust the government there too. It’s our constitutional tradition.

PS I have no animus against police officers. My father was one, a good one. In my whole life, I have only had two moving violations; one was for driving too slowly.

Creeping illiteracy in the media: I heard with my own auditory ears and saw with my own visualizing eyes an MSNBC commentator refer to a “canine dog.” It makes me hunker for a “feline dog,” or even for an “avian dog.” That would be cool. Fortunately, it was on MSNBC, not on Fox.