BC’s weekend reads

  1. Understanding Trump’s trade mistakes
  2. Empiricism and humility
  3. Epistemological modesty and unintended consequences
  4. Immigrants and slaves
  5. 5 takeaways from the Dutch election

BC’s weekend reads

  1. Pakistan’s ambitious naval delusions
  2. Diplomatic assassinations have a long and tragic history
  3. When tyranny takes hold
  4. Nullification and secession in America (review)
  5. A liberal global trading system without the United States
  6. Floating exchange rates and tariffs

Around the Web: Greece Edition

  1. Tyler Cowen has been owning this debate.
  2. Unfortunately, Greek citizens have been too fed up with the rest of the world to listen.
  3. (Perhaps libertarians and their arguments were just late to the party.)
  4. This is still the best concise sociological analysis of Greece and the EU I’ve come across.

It’s worth noting here that the overwhelming majority of ‘No’ voters – the ones who just rejected the EU after their elected, far Left leader walked out of talks days before said talks were scheduled to end – don’t want to leave the EU. Confused? See the Cowen link.

Matthew and I had a dialogue on Greece awhile back here at NOL that might be of interest.

Economists are special, but what about Palestinians and American blacks?

I’ve got the post-Thanksgiving flu. I know which toddlers are guilty of infecting me, and which aunts and uncles are responsible for this egregious assault on my happiness. Revenge will be sweet.

I’d like to get to Warren’s smackdown of my reparations proposal and also to Matthew’s thoughts on justified violence against the state (which were indirectly related to my own post on Ferguson), but first I’ve got to get to two interesting topics that have piqued my interest.

The first is Irfan Khawaja’s recent critique over at Policy of Truth of Jason Brennan’s new book on voting. As usual, Khawaja brings up a number of great points (too many, actually, for a lowly ethnographic enthusiast like me), and they deserve to be read by all (be sure to check out the ‘comments’ thread, too).

Here is an excerpt (Khawaja has flipped the tired script of many American academics by bringing in a fresh perspective):

I can’t work through all the details here, but take a look at Brennan’s argument in light of the preceding. Either my East Jerusalem case is a counter-example to his thesis, or it’s a defeater for it. In the first case, it refutes the thesis as stated. In the second case, it suggests that the thesis is highly misleading as stated. Given that, my argument requires that Brennan qualify his claims about the ethics of voting in ways that take more explicit stock of cases like the East Jerusalem one–something that would substantially change the “flavor” of his theory.

Brennan’s work has, of course, gotten a lot of excellent treatment in libertarian circles because of both his blogging activities (hint, hint, slackers) and because libertarians have a long, storied distrust of democratic politics (though this is largely an anarchistic distrust rather than the conservative-aristocratic one we North Americans think we are familiar with).

Switching gears, I also need to comment on an interesting paper (pdf) about the “Superiority of Economists” I came across over at MR. It was written by two sociologists and an economist, and it has a number of excellent insights (MR‘s link to the paper was broken, but MR also provided a link to comments by economist Paul Krugman, and his link to the paper was unbroken).

Most of the paper is a rehash of arguments about economics relative to the other social sciences (and the humanities) that libertarians have been having for a long time. (In my anecdotal experience, libertarian economists are quickest to defend the profession of economics from detractors, but they are also the quickest to defend the other social sciences from detractors (and, more importantly, incorporate non-economics research into their own). Leftist and conservative economists, by contrast, condescendingly acquiesce to attacks from other disciplines, but are also very, very disdainful of The Others’ contributions to research.) Libertarian economists generally share the same suspicions as The Other disciplines about the ability of economics to imitate the physical sciences using mathematical models (or that these models are even indicative of how humans “work”). See Warren’s piece (pdf) in Econ Journal Watch for more on these suspicions.

The last section before the conclusion (“A life of their own”) is really good and totally worth the click. It’s about economists and their relationship to everybody else in their society (this paper is made better by the fact that it is written by French academics with an intimate understanding of life in both the US and France, just like some other scholar that we all know and loathe love).

On page 18 the paper cites a few studies and lab experiments which have purportedly shown that people who study economics are, on the whole, less likely to cooperate than everybody else. There are a number of implications that the paper goes over (“does economics attract a certain type of personality?”, for example), but I wanted to focus on what is not discussed in the paper: The fact that economists probably have a different (actually, a more coherent and precise) understanding of the meaning of cooperation. Many criticisms of economics are clearly made of straw. One of the things that initially attracted me to libertarianism was the intelligent, well-informed critiques of economics as I then understood it (“homo economicus“) that were given by libertarians.

I also learned, on page 19 and contra Dr Amburgey’s repeated assertions, that economists are politically (and decisively) to the Left of the average American voter.

Another fascinating page 19 insight is that there is more income inequality ($57k gap between the top 10% and the median) in economics relative to other disciplines, but on this point the authors lose a golden opportunity to do some real sociological analysis (the authors focus instead, and predictably, on the economics profession’s recent prosperity as a whole relative to other academic disciplines; that is to say, on the income inequality between economics and The Others within academia). Earlier in the paper (7-14) an organizational comparison between economics and The Others highlighted the fact that the economics community tends to be more hierarchical, more incestuous, and possesses a “unitary disciplinary core,” which means that virtually all graduate schools teach the same concepts. The Others, in contrast, are “more decentralized, less cohesive, and [possess] less stable prestige rankings.” (9)

The most basic insight that stood out to me when I read the data on incomes was that the disparities and organizational structures of the social sciences and humanities represent a microcosm of society as a whole (pick any ole society you’d like): When rigid hierarchies are enforced, conformity and parochialism (incestuous is too strong a word here) arise, income inequality is more prevalent, and the pecking orders are more entrenched.

In contrast, societies that are “more decentralized and less cohesive” have more variety, much less deference to an established authority (such as a pecking order), and less income inequality ($42k gap between the top 10% of sociologists and the median). There are less women in economics relative to the other disciplines, and the median economist almost has the same income as a top 10% sociologist ($103k to $118k, a difference of only $15k).

Well, this post has already gone on for far too long (I hope to use it as a springboard for future musings) but I will end by noting that on page 23 the paper points out that economics is a very moral discipline, which is something non-libertarian economists vehemently deny. Libertarian economists, on the other hand, have been pointing this out for centuries.

Ukraine, Russia, the West and a Coasean Bargain?

Economist Tyler Cowen worries about the events in Ukraine:

For Russia, matters in Ukraine are close to an existential crisis, as Ukraine is intimately tied up with Russia’s sense of itself as presiding over a mini-empire of sorts.  Nor could an autocratic Russia tolerate a free and prosperous Ukraine, developing along the lines of Poland.  America cares about Ukraine less, and cares more about Syria and Iran, or at least cares about saving face in those latter venues.  Therefore there is a Coasean deal to be had between America and Russia, where Russia gets to partition part of Ukraine, create a buffer against Europeanization and democratization, keep the larger Ukraine unit weak, and also keep its Black Sea fleet.  In turn Russia would do something less than totally sabotage all American plans for Syria and Iran.  (Of course that is Coasean for the leaders, and not necessarily for the citizenries.)

The thing is…China.  What kind of signal would such a Coasean deal of partition send to China?

That is what I worry about.

I argee that there is a Coasean bargain to be had between the US and Russia in this case, but it’s not the one Dr Cowen sees. Let’s assume that the US does have more interest in the Middle East than it does in Russia’s backyard, but even with this assumption I don’t think it follows that the West will give up Ukraine for Syria and Iran.

The West has been down in the doldrums lately, it’s true, but there is still plenty of fight left in it and plenty of resources with which to do the fighting.

Really quickly: I know I’ve mentioned this before, but making two states out of one (“partitioning Ukraine”) will be a good deal for almost everybody involved (the minorities in Russian Ukraine will not fare so well). As it stands today, Ukraine is simply too big to be governed effectively. This is a problem with many, if not most, post-colonial states in Asia, Africa and Europe.

International recognition is something that would be observed by almost all sides (minorities in Russian Ukraine will not like it), which is one of the requirements I’ve pointed out that needs to be completed before secession (or partition) is undertaken in postcolonial states.

The other major requirement is that the new states are part of regional or international trading unions of some sort. The more the better, but any is a start. Russian Ukraine will be good to go, as it would be in Russia’s orbit, and the West could easily ensure that the Ukrainian Ukraine gets more attention than it now currently has. This is where the West should dig in its heels and fight: After partition. Ukrainian Ukraine will need to be drawn into the West’s economic orbit rather than offered up as a sacrificial lamb, and this definitely doable. This is the Coasean bargain, not Ukraine for Iran and Syria.

The China angle Dr Cowen brings up is also an interesting one. Beijing is authoritarian not stupid. Here is what conservative military leaders in Beijing probably see:

Ukraine might get no love from the EU or the US, but it is much weaker than Japan or South Korea or even Taiwan. So China could not take any of these states militarily without high costs, while Russia could conceivably take all of Ukraine without significant military losses (the political damage would be too much for Moscow, so it won’t happen; but it is a possible scenario).

Around the Web

  1. Missing from President’s Day: The People They Enslaved
  2. The Left Still Harbors a Soft Spot For Communism from Cathy Young at Reason
  3. Tyler Cowen on practical gradualism vs. moral absolutism, for immigration and revolution; see also Dr Delacroix’s very relevant “If Mexicans and Americans Could Cross the Border Freely” article [pdf] in the Independent Review
  4. Writing in the Wall Street Journal, James Freeman reviews the results of Obama’s stimulus package five years on
  5. Theologian and philosopher Eric Hall on Confusing Confucianism with Collectivism

Vovô não quer BigMac. E agora, Ricardo?

Eis aí algo que é verdade aqui ou no Japão. O texto do casal de blogueiros é recheado de elementos que você pode usar para discutir com seus amigos, professores ou, claro, com seu avô. Eu ainda destacaria um ponto específico, além do demográfico: a questão ricardiana. Cito com negrito por minha conta:

If the central point of Abenomics is to boost prices and thus wages and consumption — the old “raise all boats” metaphor — then to a certain extent the plan has succeeded over the last year. Consumers don’t seem to be fixated on cheap goods and services any more, though, to be honest, it’s difficult to tell if this willingness to spend more is a function of anticipation for April’s consumption tax hike.

Pois é. A administração do Primeiro-Ministro Abe sabe que a política fiscal não é um saco sem fundo (até o do Papai Noel não tem buracos, vale lembrar…). Portanto, mesmo com o estímulo fiscal, a antiga promessa de aumentar o imposto sobre o consumo foi aprovada pelo parlamento.

E agora, para algo completamente diferente…ou pelo menos mais técnico.

A aprovação legal nos traz uma redução na incerteza jurídica, já que todos sabem que a lei, em um país desenvolvido (= civilizado) será cumprida sem maiores problemas. Mais ainda, o aumento tem data e foi anunciado. Então estamos diante de um clássico problema de Macroeconomia de se saber qual é o impacto de uma política anunciada em um mundo em que as expectativas racionais opera.

A proposição Barro-Ricardiana de livro-texto nos diz algo bem simples: se eu sei que vou ter que pagar impostos amanhã, eu poupo hoje. Já num mundo não-Ricardiano (ou não-Barro-Ricardiano), o reduzido imposto de hoje, sob a expectativa de aumento do mesmo amanhã, provavelmente me induzirá a consumir mais. Tudo isto, claro, ceteris paribus.

Mas quando se fala do Japão, é bom ter em mente um ponto muito importante que não tem nada a ver com aquela lenda de “cultura oriental”, mas sim com a demografia (o tal bônus demográfico que meus amigos Salvato, Ari e Bernardo explicam aqui, para o caso brasileiro). Os autores do post falam do desejo dos mais velhos em consumir produtos de qualidade maior (embora exagerem na ênfase). Não apenas isto, mas “mais velhos” no Japão significa que estamos falando de pessoas cujo padrão de consumo alimentar é bem distinto do moderno fast-food norte-americano que os jovens tanto parecem gostar.

Barro, na própria discussão de sua proposição, já havia discutido a questão demográfica ao falar do argumento do altruísmo (herança) que justificaria o efeito da equivalência no, digamos, longo prazo. No caso do post dos autores, a demografia não está tanto no longo prazo, mas no curto prazo (acho que se fala “coorte” lá em demografia). Estamos falando de um modelo de overlapping generations destes simples. Ou seja, no mesmo período de tempo convivem duas gerações distintas: a mais velha e a mais nova (estou supondo, por simplicidade, apenas duas gerações). Só que, ao contrário do modelo de livro-texto, estamos dizendo que o padrão de consumo das gerações é distinto: uma prefere consumir mais fast-food e outra prefere alimentos de maior tempo adicionado (é, eu pensei em algo comohousehold production models que o Tyler Cowen, implicitamente, usa aqui).

A pergunta, portanto, neste caso, é a seguinte: em um modelo simples, com dois períodos, o que acontece quando tornamos o bem “consumo” (que é, lembre-se, estudante de graduação, sempre sinônimo de consumo de bens não-duráveis) heterogêneo? Primeiro, à la ciclos reais, temos duas gerações e, adicionalmente, agora, colocamos a heterogeneidade do consumo. Suponha que o restante do modelo funciona tal como antes. Ah sim, é importante fazer o destaque didático-científico: mantenha as expectativas racionais. Afinal, pode ser que algo mude (ou não) no modelo, mesmo que não haja nenhuma mudança no tipo de racionalidade dos agentes (esta é uma observação para os eternos apressados que desejam, loucamente, jogar fora a racionalidade sem antes relaxar outras hipóteses do modelo. Interessados vejamisto).

Será que a equivalência barro-ricardiana se mantém? Poderia ser uma questão de prova, mas fica para o espaço de comentários. Preferencialmente, gostaria de ver citações de papers que trataram do assunto com hipóteses semelhantes.