You are not allowed to be a selfish individual

Thursday, January 18th, 2018

Three weeks after college, Karin McQuillan flew to Senegal, West Africa, to run a community center in a rural town — which was, in the words of the Peace Corps doctor, “a fecalized environment“:

In plain English: s— is everywhere. People defecate on the open ground, and the feces is blown with the dust – onto you, your clothes, your food, the water. He warned us the first day of training: do not even touch water. Human feces carries parasites that bore through your skin and cause organ failure.

We may have a shorter, pithier term for that in English. I don’t know if the French have a term with the same je ne sais quoi:

Last time I was in Paris, I saw a beautiful African woman in a grand boubou have her child defecate on the sidewalk next to Notre Dame Cathedral. The French police officer, ten steps from her, turned his head not to see.

Senegal was not a hellhole, though:

Very poor people can lead happy, meaningful lives in their own cultures’ terms. But they are not our terms. The excrement is the least of it. Our basic ideas of human relations, right and wrong, are incompatible.

As a twenty-one-year-old starting out in the Peace Corps, I loved Senegal. In fact, I was euphoric. I quickly made friends and had an adopted family. I relished the feeling of the brotherhood of man. People were open, willing to share their lives and, after they knew you, their innermost thoughts.

The longer I lived there, the more I understood: it became blindingly obvious that the Senegalese are not the same as us. The truths we hold to be self-evident are not evident to the Senegalese. How could they be? Their reality is totally different. You can’t understand anything in Senegal using American terms.

Take something as basic as family. Family was a few hundred people, extending out to second and third cousins. All the men in one generation were called “father.” Senegalese are Muslim, with up to four wives. Girls had their clitorises cut off at puberty. (I witnessed this, at what I thought was going to be a nice coming-of-age ceremony, like a bat mitzvah or confirmation.) Sex, I was told, did not include kissing. Love and friendship in marriage were Western ideas. Fidelity was not a thing. Married women would have sex for a few cents to have cash for the market.

What I did witness every day was that women were worked half to death. Wives raised the food and fed their own children, did the heavy labor of walking miles to gather wood for the fire, drew water from the well or public faucet, pounded grain with heavy hand-held pestles, lived in their own huts, and had conjugal visits from their husbands on a rotating basis with their co-wives. Their husbands lazed in the shade of the trees.

Yet family was crucial to people there in a way Americans cannot comprehend.

The Ten Commandments were not disobeyed – they were unknown. The value system was the exact opposite. You were supposed to steal everything you can to give to your own relatives. There are some Westernized Africans who try to rebel against the system. They fail.

We hear a lot about the kleptocratic elites of Africa. The kleptocracy extends through the whole society. My town had a medical clinic donated by international agencies. The medicine was stolen by the medical workers and sold to the local store. If you were sick and didn’t have money, drop dead. That was normal.

So here in the States, when we discovered that my 98-year-old father’s Muslim health aide from Nigeria had stolen his clothes and wasn’t bathing him, I wasn’t surprised. It was familiar.

In Senegal, corruption ruled, from top to bottom. Go to the post office, and the clerk would name an outrageous price for a stamp. After paying the bribe, you still didn’t know it if it would be mailed or thrown out. That was normal.

One of my most vivid memories was from the clinic. One day, as the wait grew hotter in the 110-degree heat, an old woman two feet from the medical aides – who were chatting in the shade of a mango tree instead of working – collapsed to the ground. They turned their heads so as not to see her and kept talking. She lay there in the dirt. Callousness to the sick was normal.

Americans think it is a universal human instinct to do unto others as you would have them do unto you. It’s not. It seems natural to us because we live in a Bible-based Judeo-Christian culture.

We think the Protestant work ethic is universal. It’s not. My town was full of young men doing nothing. They were waiting for a government job. There was no private enterprise. Private business was not illegal, just impossible, given the nightmare of a third-world bureaucratic kleptocracy. It is also incompatible with Senegalese insistence on taking care of relatives.

All the little stores in Senegal were owned by Mauritanians. If a Senegalese wanted to run a little store, he’d go to another country. The reason? Your friends and relatives would ask you for stuff for free, and you would have to say yes. End of your business. You are not allowed to be a selfish individual and say no to relatives. The result: Everyone has nothing.

The more I worked there and visited government officials doing absolutely nothing, the more I realized that no one in Senegal had the idea that a job means work. A job is something given to you by a relative. It provides the place where you steal everything to give back to your family.

I couldn’t wait to get home. So why would I want to bring Africa here?

(Hat tip à mon père.)

Free advertising for mass killers

Tuesday, January 16th, 2018

Tyler Cowen cites a study estimating the value of the media attention given to mass killers:

This study compared perpetrators of seven mass killings during 2013–2017 with more than 600 celebrities over the same time period. Findings indicate that the mass killers received approximately $75 million in media coverage value, and that for extended periods following their attacks they received more coverage than professional athletes and only slightly less than television and film stars. In addition, during their attack months, some mass killers received more highly valued coverage than some of the most famous American celebrities, including Kim Kardashian, Brad Pitt, Tom Cruise, Johnny Depp, and Jennifer Aniston. Finally, most mass killers received more coverage from newspapers and broadcast/cable news than the public interest they generated through online searches and Twitter seems to warrant. Unfortunately, this media attention constitutes free advertising for mass killers that may increase the likelihood of copycats.

Yes, dolphins are smart

Friday, January 12th, 2018

The more we study dolphins, the brighter they turn out to be:

At the Institute for Marine Mammal Studies in Mississippi, Kelly the dolphin has built up quite a reputation. All the dolphins at the institute are trained to hold onto any litter that falls into their pools until they see a trainer, when they can trade the litter for fish. In this way, the dolphins help to keep their pools clean.

Kelly has taken this task one step further. When people drop paper into the water she hides it under a rock at the bottom of the pool. The next time a trainer passes, she goes down to the rock and tears off a piece of paper to give to the trainer. After a fish reward, she goes back down, tears off another piece of paper, gets another fish, and so on. This behaviour is interesting because it shows that Kelly has a sense of the future and delays gratification. She has realised that a big piece of paper gets the same reward as a small piece and so delivers only small pieces to keep the extra food coming. She has, in effect, trained the humans.

Her cunning has not stopped there. One day, when a gull flew into her pool, she grabbed it, waited for the trainers and then gave it to them. It was a large bird and so the trainers gave her lots of fish. This seemed to give Kelly a new idea. The next time she was fed, instead of eating the last fish, she took it to the bottom of the pool and hid it under the rock where she had been hiding the paper. When no trainers were present, she brought the fish to the surface and used it to lure the gulls, which she would catch to get even more fish. After mastering this lucrative strategy, she taught her calf, who taught other calves, and so gull-baiting has become a hot game among the dolphins.

Dolphins are clever in the wild, too:

In an estuary off the coast of Brazil, tucuxi dolphins are regularly seen capturing fish by “tail whacking”. They flick a fish up to 9 metres with their tail flukes and then pick the stunned prey from the water surface. Peale’s dolphins in the Straits of Magellan off Patagonia forage in kelp beds, use the seaweed to disguise their approach and cut off the fishes’ escape route. In Galveston Bay, Texas, certain female bottlenose dolphins and their young follow shrimp boats. The dolphins swim into the shrimp nets to take live fish and then wriggle out again – a skill requiring expertise to avoid entanglement in the fishing nets.

Dolphins can also use tools to solve problems. Scientists have observed a dolphin coaxing a reluctant moray eel out of its crevice by killing a scorpion fish and using its spiny body to poke at the eel. Off the western coast of Australia, bottlenose dolphins place sponges over their snouts, which protects them from the spines of stonefish and stingrays as they forage over shallow seabeds.

This earns a “wow”:

At a dolphinarium, a person standing by the pool’s window noticed that a dolphin calf was watching him. When he released a puff of smoke from his cigarette, the dolphin immediately swam off to her mother, returned and released a mouthful of milk, causing a similar effect to the cigarette smoke.

Their ability to learn a language is impressive:

By human definition, there is currently no evidence that dolphins have a language. But we’ve barely begun to record all their sounds and body signals let alone try to decipher them. At Kewalo Basin Marine Laboratory in Hawaii, Lou Herman and his team set about testing a dolphin’s ability to comprehend our language. They developed a sign language to communicate with the dolphins, and the results were remarkable. Not only do the dolphins understand the meaning of individual words, they also understand the significance of word order in a sentence. (One of their star dolphins, Akeakamai, has learned a vocabulary of more than 60 words and can understand more than 2,000 sentences.) Particularly impressive is the dolphins’ relaxed attitude when new sentences are introduced. For example, the dolphins generally responded correctly to “touch the frisbee with your tail and then jump over it”. This has the characteristics of true understanding, not rigid training.

I’m reminded of that damn bird, Alex the African Grey parrot, who was no birdbrain, and of Rico the Border Collie.

Iran is dirt poor

Saturday, January 6th, 2018

Iran is dirt poor, Edward Luttwak reminds us:

I recently saw Iran’s general poverty at first-hand driving through one of Iran’s supposedly more prosperous rural districts. In an improvised small market next to a truck stop, several grown men were selling livestock side by side, namely ducks. Each had a stock of three or four ducks, which looked like their total inventory for the day.

That is what happens in an economy whose gross domestic product computes at under $6,000 per capita: very low productivity, very low incomes. The 500,000 or so Iranians employed in the country’s supposedly modern automobile industry are not productive enough to make exportable cars: Pistachio nuts are the country’s leading export, after oil and petroleum products.

[...]

Much of the economy is owned by bonyads, Islamic foundations that pay modest pensions to war widows and such, and very large amounts to those who run them, mostly clerics and their kin. The largest, the Mostazafan Bonyad, with more than 200,000 employees in some 350 separate companies in everything from farming to tourism, is a very generous employer for its crowds of clerical managers.

That is why the crowds have been shouting insults at the clerics—not all are corrupt, but high-living clerics are common enough to take a big bite out of that theoretical $6,000 per capita.

But the largest cause of popular anger is undoubtedly the pasdaran, a.k.a the Islamic Revolutionary Guards (IRGC), an altogether more costly lot than the several hundred aghazadeh or tens of thousands of high-living clerics.

Yeah, we’ll throw off the yoke

Tuesday, January 2nd, 2018

Tyler Cowen interviews Andy Weir (The Martian, Artemis) on the economics of space travel, and it veers off into some less technical topics:

Cowen; Now let me ask you some questions about governance in space. I’ve read some of your favorite works are by Robert Heinlein, The Moon Is a Harsh Mistress; Red Mars of course by Kim Stanley Robinson; Asimov’s Caves of Steel. And it’s a consistent theme in these stories. In fact, the stories you love, they involve an element of rebellion.

Weir; They do.

Cowen; If we had a colony on the Moon, how long do you think it would be before that colony would seek independence from Earth rule?

Weir; Well, first off, it wouldn’t be Earth rule. It would be ruled by some specific country. Right?

Cowen; Sure, or company.

Weir; Or… Country. You can’t really seek independence from a company.

Cowen; Well, it could be like the East India Company, right? The Kenya Space Corporation, they have some features of East India.

Weir; Right. They’re much nicer than the East India Company was.

Weir; Yeah, well, the Kenya Space Corporation in my book is just… They have a very simple business model. They build Artemis and then rent out lots. They don’t try to control its economy or its people or anything. They’re literally just landlords, and absentee landlords at that. But you can’t declare independence from a company because, by definition, the company owns all the assets. If you say, “I’m independent from the company,” what you’re doing is resigning. Right?

Cowen; Well, you’re stealing, in a way. But it happens, right?

Weir; Yeah. But if you’re talking about some sort of revolution or something like that, well I guess the first step is you’d have to be pretty sure that you are self-sufficient and independent. You have to be, like, Earth-independent. Which, in the case of Artemis, it’s not.

Cowen; But you have some allies. So what’s now the United States declares independence from what was then Britain, and the French help us. Other people who are upset at Britain help the American colonies to become independent.

So as long as you have some outside allies, wouldn’t you expect, within say 50 years’ time, a lunar colony, a Mars colony would try to seek independence so those rents could be captured by domestic interests?

Weir; Possibly. Ultimately, I believe that all major events in history are economic. And, I mean, independence was really about who gets to collect taxes, right? So if the people who live in a city are content with the economic status that they have, they’re not going to rebel. People don’t… People, despite what you see, I would challenge you to show me any situation where people revolted over purely ideology without any economic reason.

Cowen; But think about the American colonies. So the British were taxing us maybe 5 percent of GDP —

Weir; And the American colonies preferred that those taxes went to the American colonial governments.

Cowen; Yes, absolutely. But it wasn’t that much money, in a sense. That to me is what’s surprising.

Weir; Well, at that time, taxes globally were not that much money.

Cowen; Yeah.

When you read these books by Heinlein, Asimov, Kim Stanley Robinson . . .

Weir; Yeah, they always end up being political thrillers and that’s not what I’m going for. I’m showing the frontier town and the kind of cooperative aspects of human nature. I’m not…

For some reason, every book about colonizing space ultimately seems to lead to a revolution. Because that’s exciting, right? It’s Star Wars.

You know, you’ve got a rebellion, so “yeah, we’ll throw off the yoke,” and it has historical parallels and it’s all awesome like that. But I don’t necessarily think that’s going to be the case. Partially because as long as we keep following the rules of the Outer Space Treaty, which I believe we will, there’s no such thing as sovereign territory outside of Earth. So Artemis is, functionally speaking, an offshore platform.

Cowen; On Earth, do you think we should experiment more with seasteading? Set up sea colonies?

Weir; Yeah.

Cowen; Underground colonies?

Weir; Absolutely.

Cowen; Have them be politically autonomous, if they want?

Weir; You would have to change maritime law to be able to do that. Right now, under maritime law, you can seastead. I mean, you can do it right now. You can go out into the international waters and build something. You have to flag to some country, though.

Cowen; Right. A cruise ship, yeah.

Weir; Yeah. Well, yeah, you could flag to like Suriname or something like that. You could fly a flag of convenience. But, one way or another, you are subject to the laws of the country that you’re flying the flag of, just as Artemis is subject to the laws of Kenya.

The class clown is onto something

Friday, December 8th, 2017

Bryan Caplan’s The Case Against Education comes out soon, and he managed to get The Atlantic to publish a summary — which is sure to ruffle some feathers:

How, you may ask, can anyone call higher education wasteful in an age when its financial payoff is greater than ever? The earnings premium for college graduates has rocketed to 73 percent — that is, those with a bachelor’s degree earn, on average, 73 percent more than those who have only a high-school diploma, up from about 50 percent in the late 1970s. The key issue, however, isn’t whether college pays, but why. The simple, popular answer is that schools teach students useful job skills. But this dodges puzzling questions.

First and foremost: From kindergarten on, students spend thousands of hours studying subjects irrelevant to the modern labor market. Why do English classes focus on literature and poetry instead of business and technical writing? Why do advanced-math classes bother with proofs almost no student can follow? When will the typical student use history? Trigonometry? Art? Music? Physics? Latin? The class clown who snarks “What does this have to do with real life?” is onto something.

[...]

Suppose your law firm wants a summer associate. A law student with a doctorate in philosophy from Stanford applies. What do you infer? The applicant is probably brilliant, diligent, and willing to tolerate serious boredom. If you’re looking for that kind of worker — and what employer isn’t? — you’ll make an offer, knowing full well that nothing the philosopher learned at Stanford will be relevant to this job.

The labor market doesn’t pay you for the useless subjects you master; it pays you for the preexisting traits you signal by mastering them. This is not a fringe idea. Michael Spence, Kenneth Arrow, and Joseph Stiglitz — all Nobel laureates in economics — made seminal contributions to the theory of educational signaling. Every college student who does the least work required to get good grades silently endorses the theory. But signaling plays almost no role in public discourse or policy making. As a society, we continue to push ever larger numbers of students into ever higher levels of education. The main effect is not better jobs or greater skill levels, but a credentialist arms race.

Lest I be misinterpreted, I emphatically affirm that education confers some marketable skills, namely literacy and numeracy. Nonetheless, I believe that signaling accounts for at least half of college’s financial reward, and probably more.

Definitely read the whole thing. You might learn — and even retain — something.

An account which is both amoral and alegal

Monday, December 4th, 2017

Scott Alexander describes David Friedman’s A Positive Account of Property Rights as maybe the single most mind-opening essay he’s ever read. I came away with much the same impression. Read the whole thing, but here’s the last bit of the introduction:

For all of these reasons, I believe it is worth attempting a positive account of rights — an account which is both amoral and alegal. In part I of this essay I present such an account — one in which rights, in particular property rights, are a consequence of strategic behavior and may exist with no moral or legal support.[3] The account is presented both as an explanation of how rights could arise in a Hobbesian anarchy and as an explanation of the nature of rights as we observe them around us. In Part II I suggest ways in which something like the present structure of rights might have developed.

One puzzling feature of rights as we observe them is the degree to which the same conclusions seem to follow from very different assumptions. Thus roughly similar structures of rights can be and are deduced by libertarian philosophers trying to show what set of natural rights is just and by economists trying to show what set of legal rules would be efficient. And the structures of rights that they deduce seem similar to those observed in human behavior and embodied in the common law. In Part III of this essay I will try to suggest at least partial explanations for this triple coincidence — the apparent similarity between what is, what is just, and what is efficient.

There is no equality before the taxman

Thursday, November 30th, 2017

This is no libertarian tax reform, but there are provisions that Veronique de Rugy of Reason really likes:

Before breaking down these proposals, it is worth remembering that our current system is horribly complicated, making compliance costs exorbitant. It is incredibly unfair, extending privileges to some at the expense of others. There is no equality before the taxman.

Genuine tax reform would expand and simplify the tax base by getting rid of the thousands of loopholes to special interest groups. It would lower the top marginal rates and end the double taxation on saving and investment. It should restore some horizontal equity (two people making the same income paying the same taxes). It would also make as many provisions permanent — and predictable — as possible.

Good tax reform would require the federal government to make adjustments in spending, the way states and the District of Columbia operate, so the amount of tax collected more or less covers spending for a given year.

The House version goes after a large number of tax exemptions, breaks, credits and deductions that make our code so complicated and unfair. It takes some significantly steps to reduce the mortgage interest deductions. It also gets rid of most — with the exception of a $10,000 deduction — of the state and local tax deductions (SALT). Pretty impressive moves considering ending tax deductions is usually where tax reform goes to die.

The House plan doubles the standard deduction, meaning dramatically fewer taxpayers will itemize their taxes.

The Senate plan also doubles the standard deduction. (an estimated 90 percent of filers making under $200K would now claim the standard deduction). It gets rid of SALT entirely, but is more timid on the mortgage interest deductions. Moreover, it preserves many of the tax breaks with which the House dispenses. And rather than making the tax changes permanent, it includes a sunset date of 2025 reverting the standard deduction, the estate tax, the child tax credit, SALT, the pass-through deduction, and individual tax rates to 2017 levels.

President Trump’s intention to give a real tax break to the middle class is counter-productive considering the middle class barely shoulders any of the income tax as it is. The top 10 percent of income earners — households making $133K, not $1 million as most assume — currently pay more than 70 percent of all income tax revenue. The middle quintile pays, on average, 2.6 percent of the federal income tax.

And yet, in both the House and Senate plans the middle class receives the largest tax relief by reducing their marginal tax rates, increasing the child tax credit and doubling the standard deduction. The result is fewer taxpayers would be paying income tax at all, problematic from a small government perspective. It also means a more progressive income tax code than it already is.

[...]

Both plans cut the corporate income tax rate from its current 35 percent level to 20 percent. The Senate version implements the cut in 2019, the House version in 2018. Both have the good sense to make the change permanent. This is the most pro-growth/wage change. This is a measure worth passing to make the country tax environment more competitive.

There is also the phenomenon of government failure

Wednesday, November 29th, 2017

The paradox of profits, Arnold Kling argues, is that while the profits that accrue to any given individual may be unjust, the profit system itself is necessary in order to have a modern, progressive society:

Some people, like the management team that took over Freddie Mac in 2003, have enjoyed nice profits when they deserved instead to be punished. And some people, like me, benefit from luck and timing.
The bottom line, in my view, is that while the “millionaire next door” model of hard work, delayed gratification, and risk-taking has some truth to it, that model is not the whole story.

In a modern, large-scale economy, coordination takes place through a combination of bosses and profits:

Within any one organization, you take orders from a boss. Your only alternative is to leave that organization and find another boss or start your own organization.

Profits determine the success or failure of different organizations. Organizations that earn profits can continue to operate. Organizations that fail to earn profits have to go out of business, unless they can survive on donations or subsidies.

The profit system helps to discipline bosses. Really bad bosses, who use resources inefficiently (including mis-use of workers), tend to perform poorly in terms of profits. This poor performance eventually gets weeded out, either by the boss’s boss or by the inability of a poorly-performing firm to stay in business.

Profits are a measure of economic sustainability. A business earns a profit if it offers to consumers something that is more valuable than the costs of the resources used by the business to provide its goods and services. For the most part, a business that earns a profit is using resources efficiently. For the most part, a business that operates at a loss is wasting resources.

[...]

It is easy for a person to say, “I do not like the market outcome of X. I want to see the government change it.” But when you say that, you are saying that you want to be the boss. And no matter how much you think you know, the chances are that you are not as wise a boss as you think you are. That goes for trained economists, too.

And even if you happen to be the one who is wise about a particular issue, there is no guarantee that the government boss will make the choice that you would make. There is also the phenomenon of “government failure,” and often it is worse than market failure.

We cannot do without the profit system, but can we tinker with it effectively?

It is easy to criticize specific outcomes. However, the alternative is not some system that works for “the people” to provide perfect justice. The alternative is some form of intervention undertaken by a specific group of persons, presumably government officials, who themselves operate with gaps in knowledge and constraints on competence. Government intervention, when it does take place, ought to aim less at trying to directly fix problems and more toward fostering competition in order to take advantage of the profit system’s self-correction mechanisms.

Arnold Kling laments that he is almost entirely preaching to the converted.

Just a bunch of Gypsies who got together and committed murder

Wednesday, November 29th, 2017

While reviewing Friedman’s Legal Systems Very Different From Ours, Scott Alexander first turns to the Gypsies:

Gypsies living scattered in foreign countries have generally wanted to run their own communities by their own rules. Nothing stops some of them from calling themselves a “legislature” or a “court” and claiming to make laws or pass sentences. But something does stop them from trying to enforce them: from the State’s point of view, a “court” that executes an offender is just a bunch of Gypsies who got together and committed murder. So the Vlach Rom — Romanian Gypsies — organize courts called kris which enforce their sentences with threat of banishment from the community.

Gypsies traditionally believe in marime, a sort of awful pollution that infects people who don’t follow the right rituals; anyone who interacts with polluted people will become polluted themselves. Kris courts can declare the worst offenders polluted, ensuring their speedy ostracization from Gypsy society. And since non-Gypsies are polluted by default, the possibility of ostracism and forced integration into non-Gypsy society will seem intolerable:

The effectiveness of that threat [of ostracism] depends on how easily the exiled gypsy can function outside of his community. The marimé rules (and similar rules in other societies) provide a mechanism for isolating the members of the community. Gaije, non-gypsies, do not know the marimé rules and so do not and cannot obey them. It follows that they are all polluted, unclean, carriers of a contagious disease, people whom no Rom in his right mind would willingly choose to associate with; when and if such association is unavoidable it must be taken with great care. The gypsy view of gaije, reinforced by the gaije view of gypsies as uneducated and illiterate thieves and swindlers, eliminates the exit option and so empowers the kris to enforce gypsy law by the threat of exclusion from the only tolerable human society.

This reminds me of The Use And Abuse Of Witchdoctors For Life: once your culture has a weird superstition, it can get plugged into various social needs to become a load-bearing part of the community structure.

Handle’s theory of consolidation

Tuesday, November 28th, 2017

Hayek claimed that local knowledge favors decentralization. Socialists hoped that cybernetics — what we’d now call “IT” — would overcome this problem. Handle thinks we’re just about there:

IT and increasingly capable and sophisticated management information systems, which themselves benefit from massive economies of scale, and the management techniques they enable, has invalidated this argument. If anything, big companies now seem to have a clear advantage with regards to acquiring and leveraging “local knowledge,” and combined with the other advantages of brand recognition, size and sophistication and capacity for, e.g., rent-seeking and bearing the burden of compliance overhead, that leaves “the little, genuinely-independent guy” with zero chance in the long run.

The Internet vision of the 1990s is turning out to be wrong, Arnold Kling adds.

Through the lens of state-formation

Thursday, November 23rd, 2017

James C. Scott likes to second-guess structures that prop up the powerful:

He has written a classic study of peasant resistance, Weapons of the Weak, and another on the “moral economy” of village life, where neighbors live by a system of values that derive neither from the market nor from the state. In Seeing Like a State, he explained how the modern state imposes schematic visions on the world. To administer a territory and population, it needs to standardize reality, to make it measurable by ensuring that there is one system of property ownership, one currency in circulation, a naming practice that enables bureaucrats to keep track of people (first name, last name), and so forth. What you cannot measure and monitor, you cannot rule, and so the world must become orderly and legible. This ambition can become a kind of administrative mania. Bureaucratic modes of administration — from Le Corbusier’s vision for Brasilia’s streets to Prussian state agriculture to Soviet collectivization — have run roughshod over the complexity of actual life on the ground. Such governance can be tyrannical but also ironically fragile, as the state’s selective blindness makes it a stumbling giant.

Scott’s 2009 book The Art of Not Being Governed examined Southeast Asia from the standpoint of the highland regions that have evaded imperial authority up to the present day. Whereas most stories about empire tell how the dominant power expands and asserts itself, Scott emphasizes the places where people have retained their freedom by moving up mountain valleys, staying mobile, and practicing livelihoods that are hard to track or tax. From the highlanders’ perspective, the empires lapping at their edges are peripheral, fallen places. The effect is often like reading a fantasy novel, in a very good sense: Scott leaves you with the feeling that the world is packed with more ways of life, more stories, and different kinds of heroes and villains than you encountered in history class. Although Against the Grain is not a large book, it is a kind of thematic summa of Scott’s work so far, as it reworks the entire canvas of history by reconsidering its origins through the lens of state-formation.

The conventional story of human development, he shows, is based on faulty chronology. It turns out that cultivating grain — long thought to be the crucial step from roaming to civilization — does not naturally lead people to stay put in large settlements. New archaeological evidence suggests that people planted and harvested grain as part of a mix of food sources for many centuries, perhaps millennia, without settling into cities. And there were, in fact, places where people did settle down and build towns without farming grain: ecologically rich places, often wetlands bordering the migration routes of birds and animals, where foraging, fishing, and hunting made for a good life in all seasons. There is nothing about grain that fastens humanity’s foot to the earth, as President John Quincy Adams put it in one of the innumerable retellings of the standard story.

Grain is special, but for a different reason. It is easy to standardize — to plant in rows or paddies, and store and record in units such as bushels. This makes grain an ideal target for taxation. Unlike underground tubers or legumes, grain grows tall and needs harvesting all at once, so officials can easily estimate annual yields. And unlike fugitive wild foods, grain creates a relatively consistent surplus, allowing a ruling class to skim off peasant laborers’ production through a tax regime of manageable complexity. Grain, in Scott’s lexicon, is the kind of thing a state can see. On this account, the first cities were not so much a great leap forward for humanity as a new mode of exploitation that enabled the world’s first leisured ruling class to live on the sweat of the world’s first peasant-serfs. As for writing, that great gateway to history, Scott reports that its earliest uses suggest it was basically a grain-counting technology. Literary culture and shared memory existed in abundance both before and after the first pictographs and alphabets — consider Homer’s epics, the products of a nonliterate Greek “dark age” before the Classical period. Writing contributed a ledger of exploitation.

Scott’s retelling, however, goes deeper than scrambling the chronology and emphasizing the dark side of early institutions. Life in cities, he argues, was probably worse than foraging or herding. City dwellers were vulnerable to epidemics. Their diets were less varied than those of people on the outside. Unless they were in the small ruling class, they had less leisure, because they had to produce food not just for their own survival, but also to support their rulers. Their labor might be called on to build fortresses, monuments, and those ever-looming walls. Outside the walls, by contrast, a fortunate savage or barbarian might be a hunter in the morning, a herder or fisherman in the afternoon, and a bard singing tales around the fire in the evening. To enter the city meant joining the world’s first proletariat.

Tulipmania: More Boring Than You Thought

Sunday, October 22nd, 2017

Anne Goldgar’s Tulipmania: Money, Honor, and Knowledge in the Dutch Golden Age should be called Tulipmania: More Boring Than You Thought:

The Dutch learned that tulips could be grown from seeds or buds that grew on the mother bulb; a bulb that grows from seed would take 7 to 12 years before flowering, but a bulb itself could flower the very next year. Of particular interest to Clusius and other tulip traders were “broken bulbs” — tulips whose petals showed a striped, multicolor pattern rather than a single solid color. The effect was unpredictable, but the growing demand for these rare, “broken bulb” tulips led naturalists to study ways to reproduce them. (The pattern was later discovered to be the result of a mosaic virus that actually makes the bulbs sickly and less likely to reproduce.) “The high market price for tulips to which the current version of tulipmania refers were prices for particularly beautiful broken bulbs,” writes economist Peter Garber. “Since breaking was unpredictable, some have characterized tulipmania among growers as a gamble, with growers vying to produce better and more bizarre variegations and feathering.”

After all the money Dutch speculators spent on the bulbs, they only produced flowers for about a week — but for tulip lovers, that week was a glorious one. “As luxury objects, tulips fit well into a culture of both abundant capital and new cosmopolitanism,” Goldgar writes. Tulips required expertise, an appreciation of beauty and the exotic, and, of course, an abundance of money.

Here’s where the myth comes into play. According to popular legend, the tulip craze took hold of all levels of Dutch society in the 1630s. “The rage among the Dutch to possess them was so great that the ordinary industry of the country was neglected, and the population, even to its lowest dregs, embarked in the tulip trade,” wrote Scottish journalist Charles Mackay in his popular 1841 work Extraordinary Popular Delusions and the Madness of Crowds. According to this narrative, everyone from the wealthiest merchants to the poorest chimney sweeps jumped into the tulip fray, buying bulbs at high prices and selling them for even more. Companies formed just to deal with the tulip trade, which reached a fever pitch in late 1636. But by February 1637, the bottom fell out of the market. More and more people defaulted on their agreement to buy the tulips at the prices they’d promised, and the traders who had already made their payments were left in debt or bankrupted. At least that’s what has always been claimed.

In fact, “There weren’t that many people involved and the economic repercussions were pretty minor,” Goldgar says. “I couldn’t find anybody that went bankrupt. If there had been really a wholesale destruction of the economy as the myth suggests, that would’ve been a much harder thing to face.”

That’s not to say that everything about the story is wrong; merchants really did engage in a frantic tulip trade, and they paid incredibly high prices for some bulbs. And when a number of buyers announced they couldn’t pay the high price previously agreed upon, the market did fall apart and cause a small crisis — but only because it undermined social expectations.

“In this case it was very difficult to deal with the fact that almost all of your relationships are based on trust, and people said, ‘I don’t care that I said I’m going to buy this thing, I don’t want it anymore and I’m not going to pay for it.’ There was really no mechanism to make people pay because the courts were unwilling to get involved,” Goldgar says.

But the trade didn’t affect all levels of society, and it didn’t cause the collapse of industry in Amsterdam and elsewhere. As Garber, the economist, writes, “While the lack of data precludes a solid conclusion, the results of the study indicate that the bulb speculation was not obvious madness.”

So if tulipmania wasn’t actually a calamity, why was it made out to be one? We have tetchy Christian moralists to blame for that. With great wealth comes great social anxiety, or as historian Simon Schama writes in The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden Age, “The prodigious quality of their success went to their heads, but it also made them a bit queasy.” All the outlandish stories of economic ruin, of an innocent sailor thrown in prison for eating a tulip bulb, of chimney sweeps wading into the market in hopes of striking it rich — those come from propaganda pamphlets published by Dutch Calvinists worried that the tulip-propelled consumerism boom would lead to societal decay. Their insistence that such great wealth was ungodly has even stayed with us to this day.

Labour repression & the Indo-Japanese divergence

Saturday, October 14th, 2017

At the beginning of the 20th century, the Indian and the Japanese textile industries had similar levels of wages and productivity, and both were exporting to global markets:

But by the 1930s, Japan had surpassed the UK to become the world’s dominant exporter of textiles; while the Indian industry withdrew behind the tariff protection of the British Raj. Technology, human capital, and industrial policy were minor determinants of this divergence, or at least they mattered conditional on labour relations.

Indian textile mills were obstructed by militant workers who defended employment levels, resisted productivity-enhancing measures, and demanded high wages relative to effort. But Japanese mills suppressed strikes and busted unions; extracted from workers much greater effort for a given increase in wages; and imposed technical & organisational changes at will. The bargaining position of workers was much weaker in Japan than in India, because Japan had a true “surplus labour” economy with high rates of workers ‘released’ from agriculture into industry. But late colonial India was rather ‘Gerschenkronian’, where employers’ options were more limited by a relatively inelastic supply of labour.

The state also mattered. The British Raj did little to restrain on behalf of Indian capitalists the exercise of monopoly power by Indian workers. Britain had neither the incentive, nor the stomach, nor the legitimacy to do much about it. But a key element of the industrial policy of the pre-war Japanese state was repression of the labour movement, which kept the labour market more competitive than it otherwise would have been.

A close examination makes the precise imprecise

Tuesday, October 10th, 2017

Techniques of Systems Analysis notes that there are almost always large uncertainties when it comes to costs:

At first sight, costs look like a pretty concrete thing. You just grab an accountant and put him to work. However, as always, a close examination makes the precise imprecise. As we will explain later, when we talk about time-phasing, there is a real ambiguity in deciding the dollar cost of a system. Roughly speaking, this occurs because a military system is not bought at one instant of time by going into a department store and ordering it. It has to be built up over the past years and it is expect to have a continuous existence in the future. Under such circumstances one must always ask himself what it costs to use facilities which are already owned, and what will be the salvage value of any expenditures made this year in future years. Also, if one is procuring or developing a new system, he may have had no experience on which to base cost estimate.s It is surprising, in practice, how inaccurate even careful estimates of the costs of new systems have proved to be. Careless estimates tend to be out of this world.

There is another ambiguity in costs which the Analyst generally ignores but with which the policy make is sometimes concerned. Some dollars are harder to come by than others. Research and Development funds, for example, are ordinarily tighter than procurement funds. In the U.S., expensive gadgets are often easier to buy than high grade, but relatively low cost, people. Public works funds, for obvious reasons, are often easy to get and, of course, traditional expenditures are almost always easier to justify than new ones.

Finally, there are many costs which are not usually measured in dollars, such as crew lives, dislocations, political effects, etc.