Moralizing Religions

Sunday, December 21st, 2014

Today’s most popular religions all focus on morality:

Religion wasn’t always based on morality, explains Nicolas Baumard, a psychologist at the École Normale Supérieure in Paris. For the first several thousand years of human recorded history, he notes, religions were based on rituals and short-term rewards. If you wanted rain or a good harvest, for example, you made the necessary sacrifices to the right gods. But between approximately 500 B.C.E. and 300 B.C.E., a radical change appeared all over Eurasia as new religions sprung up from Greece to India to China. All of these religions shared a focus on morality, self-discipline, and asceticism, Baumard says. Eventually these new religions, such as Stoicism, Jainism, and Buddhism, and their immediate successors, including Christianity and Islam, spread around the globe and became the world religions of today. Back in 1947, German philosopher Karl Jaspers dubbed the pivotal time when these new religions arose “the Axial Age.”

So what changed? Baumard and his colleagues propose one simple reason: People got rich. Psychologists have shown that when people have fewer resources at their disposal, prioritizing rewards in the here and now is the best strategy. Saving for the future—much less the afterlife—isn’t the best use of your time when you are trying to find enough to eat today. But when you become more affluent, thinking about the future starts to make sense, and people begin to forgo immediate rewards in order to prioritize long-term goals.

Not coincidentally, the values fostered by affluence, such as self-discipline and short-term sacrifice, are exactly the ones promoted by moralizing religions, which emphasize selflessness and compassion, Baumard says. Once people’s worldly needs were met, religion could afford to shift its focus away from material rewards in the present and toward spiritual rewards in the afterlife. Perhaps once enough people in a given society had made the psychological shift to long-term planning, moralizing religions arose to reflect those new values. “Affluence changed people’s psychology and, in turn, it changed their religion,” Baumard says.

To test that hypothesis, Baumard and his colleagues gathered historical and archaeological data on many different societies across Eurasia in the Axial Age and tracked when and where various moralizing religions emerged. Then they used that data to build a model that predicted how likely it was that a moralizing religion would appear in all sorts of different societies—big or small, rich or poor, primitive or politically complex.

It turned out that one of the best predictors of the emergence of a moralizing religion was a measure of affluence known as “energy capture,” or the amount of calories available as food, fuel, and resources per day to each person in a given society. In cultures where people had access to fewer than 20,000 kilocalories a day, moralizing religions almost never emerged. But when societies crossed that 20,000 kilocalorie threshold, moralizing religions became much more likely, the team reports online today in Current Biology. “You need to have more in order to be able to want to have less,” Baumard says.

Can Money Buy Happiness?

Sunday, November 16th, 2014

Can money buy happiness? Yes, but buying happiness isn’t straightforward:

What matters a lot more than a big income is how people spend it. For instance, giving money away makes people a lot happier than lavishing it on themselves. And when they do spend money on themselves, people are a lot happier when they use it for experiences like travel than for material goods.

[...]

Numerous studies conducted over the past 10 years have shown that life experiences give us more lasting pleasure than material things, and yet people still often deny themselves experiences and prioritize buying material goods.

[...]

“What we find is that there’s this huge misforecast,” he says. “People think that experiences are only going to provide temporary happiness, but they actually provide both more happiness and more lasting value.” And yet we still keep on buying material things, he says, because they’re tangible and we think we can keep on using them.

[...]

One of the main reasons why having more stuff doesn’t always make us happy is that we adapt to it. “Human beings are remarkably good at getting used to changes in their lives, especially positive changes,” says Sonja Lyubomirsky, psychology professor at the University of California, Riverside. “If you have a rise in income, it gives you a boost, but then your aspirations rise too. Maybe you buy a bigger home in a new neighborhood, and so your neighbors are richer, and you start wanting even more. You’ve stepped on the hedonic treadmill. Trying to prevent that or slow it down is really a challenge.”

One approach that can work, she says, is consciously trying to foster appreciation and gratitude for what you have. The process of adaptation, after all, comes from taking what you have for granted, so you can slow it down by reminding yourself of why you value what you have.

It could be as simple as setting aside time every day to follow the traditional advice of “counting your blessings.” Or you might want to keep a daily journal or express your gratitude to other people. The key is to find a way to remain conscious of everything you own and avoid simply adapting to having it around.

[...]

Increasing variety, novelty or surprise can also help you to enjoy your possessions more. “When things become unchanging, that’s when you adapt to them,” Prof. Lyubomirsky says.

If you keep a painting hanging in the same spot on the same wall, for example, you’ll stop noticing it after a while. But swap it with a painting from another room, and you’ll see each of them with fresh eyes, and appreciate them more. Try sharing your possessions with other people, too, and opening yourself up to new experiences, she says.

This could even mean depriving yourself of your possessions for a while, perhaps by lending them or sharing them with someone else. Elizabeth Dunn, associate professor of psychology at the University of British Columbia and co-author of the book “Happy Money,” recently conducted an experiment where she sent people home with a big bag of chocolate, telling some of them to eat as much of it as they could and others that they were forbidden to eat it. A third group could choose how much to eat.

The result? The people who had been forbidden from eating chocolate were able to enjoy their next chocolate bar much more than those who’d either eaten a lot or consumed their normal amount. “Giving something up temporarily can actually help to preserve our capacity to enjoy it,” Prof. Dunn says.

[...]

The paradox of money is that although earning more of it tends to enhance our well-being, we become happier by giving it away than by spending it on ourselves.

[...]

What moves the needle in terms of happiness is not so much the dollar amount you give, Prof. Dunn says, but the perceived impact of your donation. If you can see your money making a difference in other people’s lives, it will make you happy even if the amount you gave was quite small.

[...]

It’s also important to consider how what you’re buying will affect how you spend your time. That big house in the suburbs may seem like a good idea, but a 2004 study by Alois Stutzer and Bruno Frey of the University of Zurich found that people with longer commutes reported lower overall life satisfaction, all other things being equal. They calculated that you would need a 40% raise to offset the added misery of a one-hour commute.

[...]

Finally, although much of the research in this field is on spending money rather than saving it, the researchers agree that spending more than you can afford is a route to misery. Taking care of your basic needs and achieving a level of financial security is important.

[...]

“Savings are good for happiness; debt is bad for happiness. But debt is more potently bad than savings are good,” Prof. Dunn says. “From a happiness perspective, it’s more important to get rid of debt than to build savings.”

This cutting-edge science seems to be delivering advice I’ve heard somewhere before. Don’t covet material things, make a habit of counting your blessings, give to those in need, give up fine food from time to time — where have I heard all this before?

In Gurgaon, India, Dynamism Meets Dysfunction

Saturday, November 8th, 2014

Gurgaon was widely regarded as an economic wasteland:

In 1979, the state of Haryana created Gurgaon by dividing a longstanding political district on the outskirts of New Delhi. One half would revolve around the city of Faridabad, which had an active municipal government, direct rail access to the capital, fertile farmland and a strong industrial base. The other half, Gurgaon, had rocky soil, no local government, no railway link and almost no industrial base.

As an economic competition, it seemed an unfair fight. And it has been: Gurgaon has won, easily. Faridabad has struggled to catch India’s modernization wave, while Gurgaon’s disadvantages turned out to be advantages, none more important, initially, than the absence of a districtwide government, which meant less red tape capable of choking development.

[...]

Ordinarily, such a wild building boom would have had to hew to a local government master plan. But Gurgaon did not yet have such a plan, nor did it yet have a districtwide municipal government. Instead, Gurgaon was mostly under state control. Developers built the infrastructure inside their projects, while a state agency, the Haryana Urban Development Authority, or HUDA, was supposed to build the infrastructure binding together the city.

And that is where the problems arose. HUDA and other state agencies could not keep up with the pace of construction. The absence of a local government had helped Gurgaon become a leader of India’s growth boom. But that absence had also created a dysfunctional city. No one was planning at a macro level; every developer pursued his own agenda as more islands sprouted and state agencies struggled to keep pace with growth.

The solution isn’t that complicated, as Alex Tabarrok points out:

If the rights to develop Gurgaon had originally been sold in very large packages, some five to seven proprietary but competitive cities could have been created in that region. Within this system the role of the state is to make it possible to auction large parcels of land. Once such parcels and associated rights to develop the land are created, private developers will provision public goods and services up to the edge of their property.

Peter Thiel Is Wrong About the Future

Thursday, November 6th, 2014

Peter Thiel is wrong about the future, Virginia Postrel argues:

The obstacle to more technological ambitions isn’t our idea of the future. It’s how we think about the present and the past.

Americans in the mid-20th century were not in fact sanguine about the future. Anxieties about the march of technology were common. In February 1961, a statistics-filled Time magazine feature warned that automation was wiping out jobs and, worse, “What worries many job experts more is that automation may prevent the economy from creating enough new jobs.” At least nine episodes of the original “Star Trek” series were about threatening or out-of-control computers. (Still others involved menacing androids or ominous artificial intelligences whose exact nature was vaguely defined.) Movies such as “Colossus: The Forbin Project” (1970) and, of course, “2001: A Space Odyssey” (1968) picked up the scary-computer theme. Nor was the space program as universally popular as we nostalgically imagine. Americans liked the moon race, but only in July 1969 — the month of the moon landing — did a majority deem the Apollo program “worth the cost.”

Meanwhile, back in those good old days people were already voicing worries about technological stagnation that sound a lot like Stephenson’s and Thiel’s. “Before 1913,” Peter Drucker wrote in 1967, economic development “was taken for granted, but since then we’ve apparently gone sterile. And we don’t know how to start it up.” He noted that “with the exception of the plastics industry, the main engines of growth in the past 50 years were already mature or rapidly maturing industries, based on well-known technologies, back in 1913.”

[...]

The reason mid-20th-century Americans were optimistic about the future wasn’t that science-fiction writers told cool stories about space travel. Science-fiction glamour in fact worked on only a small slice of the public. (Nobody else in my kindergarten was grabbing for “You Will Go to the Moon.”) People believed the future would be better than the present because they believed the present was better than the past. They constantly heard stories — not speculative, futuristic stories but news stories, fashion stories, real-estate stories, medical stories — that reinforced this belief. They remembered epidemics and rejoiced in vaccines and wonder drugs. They looked back on crowded urban walk-ups and appreciated neat suburban homes. They recalled ironing on sweaty summer days and celebrated air conditioning and wash-and-wear fabrics. They marveled at tiny transistor radios and dreamed of going on airplane trips.

Then the stories changed. For good reasons and bad, more and more Americans stopped believing in what they had once viewed as progress. Plastics became a punch line, convenience foods ridiculous, nature the standard of all things right and good. Freeways destroyed neighborhoods. Urban renewal replaced them with forbidding Brutalist plazas. New subdivisions represented a threat to the landscape rather than the promise of the good life. Too-fast airplanes produced window-rattling sonic booms. Insecticides harmed eagles’ eggs. Exploration meant conquest and brutal exploitation. Little by little, the number of modern offenses grew until we found ourselves in a 21st century where some of the most educated, affluent and culturally influential people in the country are terrified of vaccinating their children. Nothing good, they’ve come to think, comes from disturbing nature.

Optimistic science fiction does not create a belief in technological progress. It reflects it.

Gordon Tullock on Voting

Tuesday, November 4th, 2014

Gordon Tullock just passed away, and Don Boudreax quips that it’s appropriate that his old colleague died during election week:

Six Policies Economists Love (And Politicians Hate)

Monday, October 27th, 2014

NPR’s Planet Money shares six policies economists love (and politicians hate):

  1. Eliminate the mortgage tax deduction.
  2. End the tax deduction companies get for providing health-care to employees.
  3. Eliminate the corporate income tax.
  4. Eliminate all income and payroll taxes.
  5. Tax carbon emissions.
  6. Legalize marijuana.

Transportation, Divergence, and the Industrial Revolution

Tuesday, October 21st, 2014

Nick Szabo explores transportation, divergence, and the Industrial Revolution:

After about 1000 AD northwestern Europe started a gradual switch from using oxen to using horses for farm traction and transportation.  This trend culminated in an eighteenth-century explosion in roads carrying horse-drawn carriages and wagons, as well as in canals, and works greatly extending the navigability of rivers, both carrying horse-drawn barges. This reflected a great rise in the use of cultivated fodder, a hallmark of the novel agricultural system that was evolving in northwestern Europe from the start of the second millennium: stationary pastoralism.  During the same period, and especially in the seventeenth through nineteenth centuries, most of civilized East Asia, and in particular Chinese civilization along its coast, navigable rivers, and canals, faced increasing Malthusian pressures and evolved in the opposite direction: from oxen towards far more costly and limited human porters. Through the early middle ages China had been far ahead, in terms of division of labor and technology, of the roving bandits of northern Europe, but after the latter region’s transition to stationary pastoralism that gap closed and Europe surged ahead, a growth divergence that culminated in the industrial revolution.  In the eighteenth century Europe, and thus in the early industrial revolution, muscle power was the engine of land transportation, and hay was its gasoline.

Metcalfe’s Law states that a value of a network is proportional to the square of the number of its nodes.  In an area where good soils, mines, and forests are randomly distributed, the number of nodes valuable to an industrial economy is proportional to the area encompassed.  The number of such nodes that can be economically accessed is an inverse square of the cost per mile of transportation.  Combine this  with Metcalfe’s Law and we reach a dramatic but solid mathematical conclusion: the potential value of a land transportation network is the inverse fourth power of the cost of that transportation. A reduction in transportation costs in a trade network by a factor of two increases the potential value of that network by a factor of sixteen. While a power of exactly 4.0 will usually be too high, due to redundancies, this does show how the cost of transportation can have a radical nonlinear impact on the value of the trade networks it enables.  This formalizes Adam Smith’s observations: the division of labor (and thus value of an economy) increases with the extent of the market, and the extent of the market is heavily influenced by transportation costs (as he extensively discussed in his Wealth of Nations).

How to see into the future

Saturday, October 18th, 2014

So, what is the secret of looking into the future?

Initial results from the Good Judgment Project suggest the following approaches. First, some basic training in probabilistic reasoning helps to produce better forecasts. Second, teams of good forecasters produce better results than good forecasters working alone. Third, actively open-minded people prosper as forecasters.

But the Good Judgment Project also hints at why so many experts are such terrible forecasters. It’s not so much that they lack training, teamwork and open-mindedness — although some of these qualities are in shorter supply than others. It’s that most forecasters aren’t actually seriously and single-mindedly trying to see into the future. If they were, they’d keep score and try to improve their predictions based on past errors. They don’t.

This is because our predictions are about the future only in the most superficial way. They are really advertisements, conversation pieces, declarations of tribal loyalty — or, as with Irving Fisher, statements of profound conviction about the logical structure of the world.

Some participants in the Good Judgment Project were given advice, a few pages in total, which was summarised with the acronym CHAMP:

  • Comparisons are important: use relevant comparisons as a starting point;
  • Historical trends can help: look at history unless you have a strong reason to expect change;
  • Average opinions: experts disagree, so find out what they think and pick a midpoint;
  • Mathematical models: when model-based predictions are available, you should take them into account;
  • Predictable biases exist and can be allowed for. Don’t let your hopes influence your forecasts, for example; don’t stubbornly cling to old forecasts in the face of news.

Why is Football More Popular than Ever?

Thursday, October 16th, 2014

Why is football more popular than ever?

In practice getting people to watch spot advertising means programming that has to be watched live and in practice that in turn means sports. Thus it is entirely predictable that advertisers will pay a premium for sports. It is also predictable that the cable industry will pay a premium for sports because must-watch ephemera is a good insurance policy against cord-cutting. Moreover, as a straight-forward Ricardian rent type issue, we would predict that this increased demand would accrue to the owners of factor inputs: athletes, team owners, and (in the short-run) the owners of cable channels with contracts to carry sports content. Indeed this has basically all happened.

Here’s something else that is entirely predictable from these premises: we should have declining viewership for sports. If you’re the marginal viewer who ex ante finds sports and scripted equally compelling, it seems like as sports get more expensive and you keep having to watch ads, whereas scripted gets dirt cheap, ad-free, and generally more convenient, the marginal viewer would give up sports, watch last season’s episodes of Breaking Bad on Netflix, be blissfully unaware of major advertising campaigns, and pocket the $50 difference between a basic cable package and a $10 Netflix subscription.

The weird thing is that this latter prediction didn’t happen. During exactly the same period over which sports got more expensive in absolute terms and there was declining direct cost and hassle for close substitutes, viewership for sports increased. From 2003 to 2013, sports viewership was up 27%. Or rather, baseball isn’t doing so great and basketball is holding its own, but holy moly, people love football. If you look at both the top events and top series on tv, it’s basically football, football, some other crap, and more football. I just can’t understand how when one thing gets more expensive and something else that’s similar gets a lot cheaper and lower hassle, that you see people flocking to the thing that is absolutely more hassle and relatively more money.

Empire of the Summer Moon

Thursday, October 16th, 2014

Scott Alexander reviews Empire of the Summer Moon, about the Comanche Indians:

When Mexico took over from Spain and tried to colonize Texas, the Comanches beat them so soundly that they decided to get some “help” by inviting Anglo-Americans to come in and colonize, leading to the Texas revolt, the Mexican War, and so on. Through the first thirty years or so of American Texas, American control only extended through the eastern half of the state, with the western half being totally Comanche and almost totally unexplored. The border was so feared that places like Fort Worth, Texas were originally a line of actual forts intended to protect the Texans from Comanche raids.

These raids were probably the most disturbing part of the book. On the one hand, okay, the white people were trying to steal the Comanches’ land and they had every right to be angry. On the other hand, the way the Comanches expressed that anger was to occasionally ride in, find a white village or farm or homestead, surround it, and then spend hours or days torturing everyone they found there in the most horrific possible ways before killing the men and enslaving the women and children. Sometimes people were scalped alive. The women would usually be gang-raped dozens of times, and then enslaved, carried off to Comanche territory, and gang-raped some more. Children were forced to watch as their parents were raped and tortured and killed, or vice versa.

Their favorite pastime was to find a remote farm somewhere, ride in dressed in full war gear, communicate some version of “Oh, hi, I know what this looks like but actually we’re just stopping by, mind giving us a bite to eat?”, enjoying a lavish feast put on by extremely nervous settlers, and then saying “Very good, in exchange for this feast we give you a five minute head start”, then giving them five minutes to run away before riding them down and torture-killing the entire family in the manner described earlier.

On the other hand, the Comanches fit the classic pattern of hunter-gatherer civilizations of simultaneously being really mean to people outside the tribe while showing deep and heartfelt kindness to everyone within. We know this because sometimes if there were very young children, and the Comanches were feeling a bit low on headcount, they would capture the children and adopt them as full Comanches (after torture-killing the parents, of course) and some of these children would later grow up to write English-language books about their experience. But this practice definitely led to some awkward situations, and the book centers around one of them: the last great chief of the Comanches, Quanah, was half-white, the son of a Comanche chief and a Texan woman who had been captured when she was nine years old.

So there was a bit of traffic back and forth between America and Comancheria in the 19th century. White people being captured and raised by Comanches. The captives being recaptured years later and taken back into normal white society. Indians being defeated and settled on reservations and taught to adopt white lifestyles. And throughout the book’s description of these events, there was one constant:

All of the white people who joined Indian tribes loved it and refused to go back to white civilization. All the Indians who joined white civilization hated it and did everything they could to go back to their previous tribal lives.

There was much to like about tribal life. The men had no jobs except to occasionally hunt some buffalo and if they felt courageous to go to war. The women did have jobs like cooking and preparing buffalo, but they still seemed to be getting off easy compared to the white pioneer women or, for that matter, women today. The whole culture was nomadic, basically riding horses wherever they wanted through the vast open plains without any property or buildings or walls. And everyone was amazingly good at what they did; the Comanche men were probably the best archers and horsemen in the history of history, and even women and children had wilderness survival and tracking skills that put even the best white frontiersmen to shame. It sounds like a life of leisure, strong traditions, excellence, and enjoyment of nature, and it doesn’t surprise me that people liked it better than the awful white frontier life of backbreaking farming and endless religious sermons.

Alexis de Tocqueville on the Dark Sides of Democracy

Tuesday, October 14th, 2014

Alexis de Tocqueville saw five potentially dark sides of democracy:

One: Democracy breeds materialism

In the society that de Tocqueville knew from childhood, making money did not seem to be at the forefront of most people’s minds. The poor (who were the overwhelming majority) had almost no chance of acquiring wealth. So while they cared about having enough to eat, money as such was not part of how they thought about themselves or their ambitions: there was simply no chance. On the other hand, the tiny upper stratum of landed aristocrats did not need to make money – and regarded it as shameful to work for money at all, or to be involved in trade or commerce. As a result, for very different reasons, money was not the way to judge a life.

However, the Americans de Tocqueville met all readily believed that through hard work, it was possible to make a fortune and that to do so was wholly admirable and right. There was hence no suspicion whatever of the rich, a certain moral judgement against the poor, and an immense respect for the capacity to make money. It seemed, quite simply, the only achievement that Americans thought worth respecting. For example, in America, observed de Tocqueville, a book that does not make money – because it does not sell well – cannot be good, because the test of all goodness is money. And anything that makes a profit must be admirable in every way. It was a flattened, unnuanced view that made de Tocqueville see the advantages of the relatively more subtle, multi-polar status systems of Europe, where one might (on a good day) be deemed good, but poor; or rich, but vulgar.

Democracy and Capitalism had created a relatively equitable, but also very flat and oppressive way for humans to judge each other.

Two: Democracy breeds envy and shame

Travelling around the United States, de Tocqueville discerned an unexpected ill corroding the souls of the citizens of the new republic. Americans had much, but this affluence did not stop them from wanting ever more and from suffering whenever they saw someone else with assets they lacked. In a chapter of Democracy in America entitled ‘Why the Americans are Often so Restless in the Midst of Their Prosperity’, he sketched an enduring analysis of the relationship between dissatisfaction and high expectation, between envy and equality:

‘When all the prerogatives of birth and fortune have been abolished, when every profession is open to everyone, an ambitious man may think it is easy to launch himself on a great career and feel that he has been called to no common destiny. But this is a delusion which experience quickly corrects. When inequality is the general rule in society, the greatest inequalities attract no attention. But when everything is more or less level, the slightest variation is noticed… That is the reason for the strange melancholy often haunting inhabitants of democracies in the midst of abundance and of that disgust with life sometimes gripping them even in calm and easy circumstances. In France, we are worried about increasing rate of suicides. In America, suicide is rare, but I am told that madness is commoner than anywhere else’.

Three: The tyranny of the majority

Typically, we think of democracy as being the opposite of tyranny. It should, in a democracy, no longer be possible for a clique to lord it over everyone else by force; leaders have to govern with the consent of the governed. But de Tocqueville noticed that democracy could easily create its own specialised type of tyranny: that of the majority. The majority group could, in principle, be very severe and hostile to minorities. De Tocqueville wasn’t simply thinking of overt political persecution, but of a less dramatic, but still real, kind of tyranny in which simply being ‘in a minority’ as regards prevailing ideologies starts to seem unacceptable, perverse – even a threat.

Democratic culture, he thought, could easily end up demonising any assertion of difference, and especially of cultural superiority or high mindedness, which could be perceived as offensive to the majority – even though such attitudes might be connected with real merit. In a tyranny of the majority, a society grows ill at ease with outstanding merit or ambition of any kind. It has an aggressively levelling instinct; in which it is regarded as a civic virtue to cut down to size anyone who seems to be getting above themselves.

Four: Democracy turns us against authority

De Tocqueville saw democracy as encouraging strong ideas about equality, to an extent that could grow harmful and dispiriting. He saw that democracy encourages ‘in the human heart a depraved taste for equality, which always impels the weak to want to bring the strong down to their level’.

Five: Democracy undermines freedom of mind

Instinctively, you’d suppose that democracy would encourage citizens to have an open mind. Surely democracy encourages debate and allows disagreements to be resolved by voting, rather than by violence? We think of openness of mind as being the result of living in a place where lots of opinions get an airing.

However, de Tocqueville came to the opposite conclusion: that in few places could one find ‘less independence of mind, and true freedom of discussion, than in America’.

Trusting that the system was fair and just, Americans simply gave up their independence of mind, and put their faith in newspapers and so-called ‘common sense’. The scepticism of Europeans towards public opinion had given way to a naive faith in the wisdom of the crowd.

Income Inequality

Tuesday, October 14th, 2014

Income inequality is low in agrarian, pre-industrial societies, because you need income to achieve income inequality:

The idea is, there is an absolute level of subsistence income for the mass of peasants who are creating value in the traditional society. Above that level is the surplus, or the amount of income which can be expropriated by elites; and below that amount… starvation for the producers in the economy.

Thus, in a very poor society whose average income is close to the absolute survival level, the surplus extracted is pretty small and therefore inequality cannot be very high. But as average income rises, there is potentially more to extract. So the interesting question becomes, did pre-industrial societies at different levels of income have different “extraction levels”? Put another way: did peasant incomes also rise when the average income rose or did the increase simply lead to more elite extraction?

Pre-Industrial Inequality

Incomes may have been more equally distributed in China in 1880 than in England in 1688, but that’s only because the average income was quite low in China. But perhaps more importantly, China in 1880 was closer to its maximum potential inequality than England in 1688 was.

(Hat tip to T. Greer.)

Adam Smith’s Surprising Guide to Happiness (But Not Wealth)

Sunday, October 12th, 2014

Russ Roberts discusses his new book, How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness, with Nick Gillespie of Reason:

Peter Thiel Converses with Bill Kristol

Saturday, October 11th, 2014

Bill Kristol has a conversation with Peter Thiel:

Immigrants Retain Their Social Status

Thursday, October 9th, 2014

The evidence shows that immigrant groups tend to retain the social status that they arrive with, Gregory Clark points out:

The same goes with more recent immigrants to the United States. Due to visa restrictions, certain immigrant groups were permitted entry to the United States only if they could prove they had skills that were needed in the U.S. labor market. For example, the Africans, Chinese, Christian Arabs, Filipinos, Indians, Iranians, and Koreans who did gain entry into the United States were from the upper echelons of their home societies. And, in the United States, they enjoy significantly higher than average social status (as measured, again, by the number of doctors per 1,000 members of the group). Groups who, for various reasons, did not face the same restrictions — including the Hmong, Latinos, and Maya — entered the United States with low social status and have struggled to achieve upward mobility since. Immigration to the United States, in other words, rarely changes one’s social status.

The same pattern is echoed in Europe. In the 1960s and 1970s, Austria, Belgium, Denmark, Germany, and Switzerland created guest worker programs to recruit unskilled workers for basic factory jobs, often from Turkey’s poor, rural areas. Today, the children of those Turkish immigrants all perform worse on language and mathematics tests than domestic populations, which is a reliable indicator of lower social status. The lower status of their parents was thus reproduced in their new home countries.

By the same token, countries that selected elite immigrants to begin with now have high-performing immigrant classes. For example, the United Kingdom selects immigrants based more on education and skills. As a result, African, Chinese, and Indian immigrants outperform their British counterparts; although children of white British parents born between 1963 and 1975 attained on average 12.6 years of education, children of African migrants stayed in school for 15.2 years, those of Indian migrants for 14.2 years, and those of Chinese migrants for 15.1 years.