« October 2017 | Main | December 2017 »
Leaving the EU is much harder, and more costly, than Brexit proponents allowed.
Take, for instance, the issue of Northern Ireland, which trades freely with Ireland. But when the UK leaves the EU, Northern Ireland will be forced to close borders with Ireland. That will be hugely painful politically and economically.
David Hume in a letter to Adam Smith, bemoaning political life:
“Superstition and Ignorance gain Ground daily.” -- September 1765
Which leads to Hume’s growing apathy:
“Why shoud I forgo Idleness and Sauntering and Society; and expose myself again to the Clamours of a stupid, factious Public? I am not yet tir’d of doing nothing; and am become too wise either to mind Censure or Applause.” -- January 1766
This is the danger of our day—that the scandal after scandal, and the crass political maneuverings over taxes, the environment, general governance, and the lack of common decency at the top of all branches of government—will make us all want to retreat into our shells, waiting for this absurd time to pass.
But will it pass if we so retreat? Step 1 is to start the work at local levels to reduce the force of gerrymandering--the real threat to democracy.
Happy Thanksgiving to all, even or especially to those of differing views! We have much to be grateful for, even as we battle over the particulars.
Nicholas Kristof has an enlightening article in the New York Times, arguing that so-called conservatives in red states actually have more extra-marital sex, teenage pregnancies, divorces, and prostitution than do blue state liberals.
Strident calls for religious orthodoxy don’t stop people from being human and corruptible. This includes Bible-thumping elders who pick on teenage girls.
Perhaps the lesson is that it is better to plan for that corruptibility through sex education, birth control, women’s reproductive rights, and laws preventing underage marriage, rather than sticking our heads-in-the-sand.
Two articles came out recently that demonstrate the power of using economic logic to cut through the confusion involving wages.
First, Alex Tabarrok reports on evidence that attacks the view that raising Uber drivers’ pay will increase Uber drivers’ incomes. Instead, researchers at Uber and NYU show how a nominal increase in wages may lead to more waste of time and fuel and a constant real income. Lovely bit of analysis, although sad for struggling drivers. See:
“The Uber Tipping Equilibrium”
The second article is in today’s New York Times, explaining why a single national minimum wage could be improved upon by taking account of cost of living differences around the country.
There’s lots to like about paying workers more where cost of living is higher, or less where it is lower. And this would attract jobs to those exact areas where more employment is needed.
Uwe Reinhardt passed away this week. He was a noted ethics and economics kind of economist, not shying from addressing important issues even if they did stray into philosophical debates.
He was at the Woodrow Wilson School at Princeton, and wrote extensively about health care.
He also was an astute writer on the ethics of economic efficiency. See: “Can Efficiency in Health Care Be Left to the Market?” Journal of Health Politics, Policy and Law 26.5 (2001): pp. 967–992.
The New York Times obituary notes that:
In 2015, the Republic of China awarded Professor Reinhardt its Presidential Prize for having devised Taiwan’s single-payer National Health Insurance program. The system now provides virtually the entire population with common benefits and costs 6.6 percent of the nation’s gross domestic product (about one-third the share that the United States spends).
Taiwan has an average life expectancy of 80 years, compared to 79 years for the U.S. Taiwan has an infant mortality rate of 5, which by some measures is below the U.S. (there may be measurement issues).
It’s obviously complicated to compare health systems, but it is deeply troubling when the most powerful nation on earth spends 3X as much on health care as other developed countries, many of our citizens are excluded from receiving preventive care, and we have so little to show for it in terms of human welfare indicators.
Reinhardt will be missed!
[Thanks to Tyler Cowen for the link.]
Ricardo Hausmann has a book review entitled “The Moral Identity of Homo Economicus,” that takes a look at Akerloff and Kranston’s Identity Economics and Bowles’ The Moral Economy.
These books presage what Hausmann calls a “new revolution” in economics:
“The new revolution in economics may find a place for strategies based on affecting ideals and identities, not just taxes and subsidies. In the process, we may understand that we vote because that is what citizens ought to do, and we excel at our jobs because we strive for respect and self-realization, not just a raise.”
All very good!
(My quibble—well, more than a quibble, my complaint—is that this is not new at all. The Association for Social Economics has been doing this work since the 1940s! Neoclassicals now come along and brush this all aside to claim they have discovered something “new” that is as old as Adam Smith! John Davis has been doing identity economics for a very long time.)
Hausmann concludes, “Economics and our view of human behavior need not be dismal. It may even become inspirational.”
Exactly: we have a chance to inspire students about the wonders of the economy, including markets, not because they will get rich, but because entrepreneurship is a way of discovery, of fulfillment, and also often accomplishes good for humanity. To wrap this up in the stale fish smell of “efficiency” or “profit-maximization” misses a wonderful opportunity to frame the quest in terms that Quixote would understand. What's a life for, anyway?
A virtue ethicist knows that no one is perfect, and that the vicissitudes of life teach us lessons. She also knows that we have exemplars who guide us along the way.
One such exemplar for me was Franklin “Lee” Ennis, who passed away a week ago at age 81.
I’ll never forget the moment I met Lee in spring of 1970. I got home from school to see a tall ladder up against the side of our house. A handsome man was at the peak of our eaves painting.
“Hey, boy,” he called down. That was how he always greeted me, with his charisma and playful grin and sparkle in his eyes -- that never left despite the pain of his last years of diabetes and complications.
As a young man Lee was a rascal, in trouble with the law, infused with alcohol and rebellion. He was a steelworker climbing high over the Potomac River to build the Wilson Bridge along I-95. He was a plumber for the Marine Corps. He climbed more tall buildings with a commercial sign company. After retirement, he worked every day as handyman and caretaker.
He grew up in Stafford County, Virginia, one of the poorest places in America. Cradling the Potomac River, it was where the Union Army camped for years during the Civil War, taking every tree, every cow, and every bushel of corn. The post-war left nothing to build upon—a ravaged land, people dispersed or dead. It took 100 years for Stafford to recover.
Lee became the unofficial “mayor” of Widewater, a teensy blip on the map of Stafford (if you can find it). This was a spot where the CSX track line once had a tiny railroad station to help load passengers and fish heading to Washington, D.C. (My grandparents ran the fishery.) Lee helped start the volunteer fire station to service this peninsula, isolated and cut off due to geography.
Later in life, Lee conquered a war with alcohol, became a devoted church member, and spent many hours helping others. At times he had a gruff exterior, tinged with comments that sounded prejudiced; this was belied by his acts of kindness, reaching out to those who needed it.
Lee made people feel safe. He was a leader who never held office. What a blessing to have had him in my life.
To those who say… “Nothing can be done about guns….” read Nicholas Kristof’s piece “How to Reduce Gun Violence” in yesterday’s NYTimes.
Kristof’s analysis is data driven. It is not true, at least on the surface, that more guns make you safer—regardless of the anecdotal evidence from Sunday’s mass shooting in Texas.
States with more guns have … more gun violence.
Of course, causality is hard to pin down. But the vast majority of gun violence is not a mass shooter situation, it is one-on-one, crimes of passion or the tragedy of suicide.
Kristof’s key point is that liberals have gone on the wrong track, focusing on banning guns. A better approach, he argues, is to enhance gun safety.
Saying “Nothing can be done” is defeating and unethical from a utilitarian and virtue-ethics perspective. And I presume, if our founding elders who wrote the second amendment were here today, they would be willing to allow gun safety measures that would reduce the epidemic of gun violence in America without denying the right to bear arms.
The New York Times reports that “Many Academics are Eager to Publish in Worthless Journals.”
Given the pressure on teachers everywhere to publish… publish… publish, it is inevitable that the marketplace would respond to that demand.
The result are hundreds, perhaps thousands, of pseudo-academic outlets for presenting papers and then having them published in official sounding journals.
The reputable Journal of Economics and Finance now has its dark shadow, the Journal of Finance and Economics. Sounds good on paper, doesn’t it?
For a fee of a few hundred dollars, one can build a nice resume that will please administrators, who may only care about getting the accreditation boards off their backs.
What is the solution?
One idea is to devote resources (the AEA has it) to coming up with lists of reputable journals that are in fact peer-reviewed. All others would be blacklisted. This could hurt creativity in small start-up groups in newer areas of research, but would be a small price to pay for removing the scourge of rogue publishers.
As I see it, this is not censorship of unacceptable ideas, only the removing of incentives for an unacceptable scientific process.
Top tier schools likely don’t have this problem since their faculty publish in the top tier outlets. The problem is mainly one in the middle to low end of the academic spectrum, and that includes many universities in the U.S. and overseas. A second option is for such schools to figure out a better way of ensuring that faculty stay current in the field other than insisting that everyone publishing.