All the hand-wringing about getting into good colleges is probably a waste of time

Wednesday, July 10th, 2019

Scott Alexander looks at increasingly competitive college admissions and ends with this summary:

  1. There is strong evidence for more competition for places at top colleges now than 10, 50, or 100 years ago. There is medium evidence that this is also true for upper-to-medium-tier colleges. It is still easy to get into medium-to-lower-tier colleges.
  2. Until 1900, there was no competition for top colleges, medical schools, or law schools. A secular trend towards increasing admissions (increasing wealth + demand for skills?) plus two shocks from the GI Bill and the Vietnam draft led to a glut of applicants that overwhelmed schools and forced them to begin selecting applicants.
  3. Changes up until ten years ago were because of a growing applicant pool, after which the applicant pool (both domestic and international) stopped growing and started shrinking. Increased competition since ten years ago does not involve applicant pool size.
  4. Changes after ten years ago are less clear, but the most important factor is probably the ease of applying to more colleges. This causes an increase in applications-per-admission which is mostly illusory. However, part of it may be real if it means students are stratifying themselves by ability more effectively. There might also be increased competition just because students got themselves stuck in a high-competition equilibrium (ie an arms race), but in the absence of data this is just speculation.
  5. Medical schools are getting harder to get into, but law schools are getting easier to get into. There is no good data for graduate schools.
  6. All the hand-wringing about getting into good colleges is probably a waste of time, unless you are from a disadvantaged background. For most people, admission to a more selective college does not translate into a more lucrative career or a higher chance of admission to postgraduate education. There may be isolated exceptions at the very top, like for Supreme Court justices.

The trees are ready to cut

Tuesday, July 9th, 2019

A new federal program in the 1980s offered farmers money to reforest depleted land:

Pine trees appealed to Mr. George. He bought loblolly seedlings and pulled his pickup into a parking lot where hands-for-hire congregated.

“We figured we’d plant trees and come back and harvest it in 30 years and in the meantime go into town to make a living doing something else,” he said.

Three decades later the trees are ready to cut, and Mr. George is learning how many other Southerners had the same idea.

A glut of timber has piled up in the Southeast. There are far more ready-to-cut trees than the region’s mills can saw or pulp. The surfeit has crushed timber prices in Mississippi, Alabama and several other states.

The volume of Southern yellow pine, used in housing and to make paper, has surged in recent decades as farmers replaced cropland with trees and as clear-cut forests were replanted. By 2020, the amount of wood growing per acre of timberland in many counties will have more than quadrupled since 1980, U.S. forestry officials estimate.

It has been a big loser for some financial investors, among them the country’s largest pension fund. The California Public Employees’ Retirement System spent more than $2 billion on Southern timberland, and harvested trees at depressed prices to pay interest on money borrowed to buy. Calpers sold much of its land this summer at a loss. A spokeswoman for the pension fund declined to comment.

It has also been tough for the individuals and families who own much of the South’s forestland, and who had banked on its operating as a college fund or retirement account. The region has more than six million owners of at least 10 wooded acres, say academics and forestry consultants. Many of the owners were counting on forests as a long-term investment that could be replenished and passed on to heirs.

How would fifty guineas for a night’s work suit you?

Friday, July 5th, 2019

I was listening to Stephen Fry’s narration of “The Adventure of the Engineer’s Thumb,” when the young (unemployed) engineer at the center of the story was offered 50 guineas for a night’s work:

The guinea was a coin of approximately one quarter ounce of gold that was minted in Great Britain between 1663 and 1814. The name came from the Guinea region in West Africa, where much of the gold used to make the coins originated. It was the first English machine-struck gold coin, originally worth one pound sterling, equal to twenty shillings, but rises in the price of gold relative to silver caused the value of the guinea to increase, at times to as high as thirty shillings. From 1717 to 1816, its value was officially fixed at twenty-one shillings.

When Britain adopted the gold standard the guinea became a colloquial or specialised term. Although the coin itself no longer circulated, the term guinea survived as a unit of account in some fields. Notable usages included professional fees (medical, legal etc), which were often invoiced in guineas, and horse racing and greyhound racing, and the sale of rams. In each case a guinea meant an amount of one pound and one shilling (21 shillings), or one pound and five pence (£1.05) in decimalised currency.

One pound in 1892 has inflated to well over 100 pounds today, so 50 guineas would be worth over 6,000 pounds in 2019.

Average per-capita consumption rates of resources are about 32 times higher in the First World than in the developing world

Monday, June 24th, 2019

Naturally Jared Diamond (Upheaval) is concerned about the environment — and about the rest of the world trying to live like us:

The most discussed primary effect of CO2 release is to act as a so-called greenhouse gas in the atmosphere. That’s because atmospheric CO2 is transparent to the sun’s shortwave radiation, allowing incoming sunlight to pass through the atmosphere and warm the Earth’s surface. The Earth re-radiates that energy back towards space, but at longer thermal infrared wavelengths to which CO2 is opaque. Hence the CO2 absorbs that re-radiated energy and re-emits it in all directions, including back down to the Earth’s surface.

[...]

But there are two other primary effects of CO2 release. One is that the CO2 that we produce also gets stored in the oceans as carbonic acid. But the ocean’s acidity is already higher than at any time in the last 15 million years. That dissolves the skeletons of coral, killing coral reefs, which are a major breeding nursery of the ocean’s fish, and which protect tropical and subtropical sea-coasts against storm waves and tsunamis. At present, the world’s coral reefs are contracting by 1% or 2% per year, so they will mostly be gone within this century, and that means big declines in tropical coastal safety and protein availability from seafood.

[...]

For instance, when non-poisonous chlorofluorocarbon gases (CFCs) replaced the poisonous gases previously used in refrigerators until the 1940’s, it seemed like a wonderful and safe engineering solution to the refrigerator gas problem, especially because laboratory testing had revealed no downside to CFCs. Unfortunately, lab tests couldn’t reveal how CFCs, once they got into the atmosphere, would begin to destroy the ozone layer that protects us from ultraviolet radiation.

[...]

France has generated most of its national electricity requirements from nuclear reactors for many decades without an accident.

[...]

Europeans are discouraged from buying expensive big cars with high fuel consumption and low gas mileage, because the purchase tax on cars in some European countries is set at 100%, doubling the cost of the car.

[...]

Also, European government taxes on gasoline drive gas prices to more than $9 per gallon, another disincentive to buying a fuel-inefficient car.

[...]

These various resources differ in four respects important for understanding their potential for creating problems for us: their renewability, and the resulting management problems; their potential for limiting human societies; their international dimensions; and the international competition that they provoke, including wars.

[...]

There have already been some attempts to exploit all three: after World War One the German chemist Fritz Haber worked on a process to extract gold from ocean water; at least one attempt has been made to tow an iceberg from Antarctica to a water-poor Middle Eastern nation; and efforts are far advanced to mine some minerals from the ocean floor.

[...]

Fresh water is also mobile: many rivers flow between two or more countries, and many lakes are bordered by two or more countries, hence one country can draw down or pollute fresh water that another country wants to use.

[...]

Average per-capita consumption rates of resources like oil and metals, and average per-capita production rates of wastes like plastics and greenhouse gases, are about 32 times higher in the First World than in the developing world.

[...]

The First World consists of about 1 billion people who live mostly in North America, Europe, Japan, and Australia, and who have relative average per-capita consumption rates of 32.

[...]

Many decades ago, American diplomats used to play a game of debating which of the world’s countries were most irrelevant to U.S. national interests. Popular answers were “Afghanistan” and “Somalia”: those two countries were so poor, and so remote, that it seemed that they could never do anything to create problems for us.

[...]

Among the ways in which globalization has made differences in living standards around the world untenable, three stand out. One is the spread of emerging diseases from poor remote countries to rich countries.

[...]

Many people in poor countries get frustrated and angry when they become aware of the comfortable lifestyles available elsewhere in the world. Some of them become terrorists, and many others who aren’t terrorists themselves tolerate or support terrorists.

[...]

Only in poor countries, where much of the population does feel desperate and angry, is there toleration or support for terrorists.

[...]

They have two ways of achieving it. First, governments of developing countries consider an increase in living standards, including consumption rates, as a prime goal of national policy. Second, tens of millions of people in the developing world are unwilling to wait to see whether their government can deliver high living standards within their lifetime. Instead, they seek the First World lifestyle now, by emigrating to the First World, with or without permission: especially by emigrating to Western Europe and the U.S., and also to Australia; and especially from Africa and parts of Asia, and also from Central and South America. It’s proving impossible to keep out the immigrants.

The U.S. is resource-rich, self-sufficient in food and most raw materials, and large in area

Friday, June 21st, 2019

Jared Diamond argues (in Upheaval) that the US is facing its own crisis — but first a geography lesson:

The reason for the U.S.’s large population is its large area of fertile land. The only two larger countries, Russia and Canada, have much lower populations, because a large fraction of their area is Arctic, suitable only for sparse habitation and no agriculture.

[...]

The reason for this apparent contradiction is that the U.S. is resource-rich, self-sufficient in food and most raw materials, and large in area, and has a population density less than 1/10th of Japan’s.

[...]

The only countries in the world with per-capita GDPs or incomes higher than the U.S.’s are either small (populations of just 2–9 million: Kuwait, Norway, Qatar, Singapore, Switzerland, and the United Arab Emirates) or tiny (populations of 30,000–500,000: Brunei, Liechtenstein, Luxembourg, and San Marino).

[...]

Their wealth comes mainly from oil or finance, whose earnings are spread over few people, resulting in high GDP or income per person but a low rank in total national economic output (which equals output per person times population).

[...]

As regards geography, we are fortunate to be endowed with excellent real estate. The U.S.’s lower 48 states lie entirely within the temperate zones, which are the world’s most productive zone for agriculture, and the safest from the perspective of public health.

[...]

Thus, North America’s wedge shape and history of repeated past glaciations, combined with the moderate rainfall prevailing over most of the continent today, are the underlying reasons why the U.S. has high agricultural productivity and is the world’s largest exporter of food.

[...]

The other major geographic advantage of the U.S. is our waterways, both coastal and interior. They constitute a big money-saver, because transport by sea is 10–30 times cheaper than transport overland by road or by rail.

[...]

Once barriers to navigation on those rivers had been engineered out of existence by construction of canals and locks, ships could sail 1,200 miles into the interior of the central U.S. from the Gulf Coast (Plate 9.4).

[...]

When one adds the intra-coastal waterway to the Mississippi / Great Lakes system, the U.S. ends up with more navigable internal waterways than all the rest of the world combined.

[...]

The other advantage of our sea-coasts is as protection against invasion.

Japan is, and prides itself on being, the most ethnically homogenous affluent or populous country in the world

Thursday, June 20th, 2019

Jared Diamond argues (in Upheaval) that modern Japan is facing a crisis, of sorts:

Japan today has the world’s third-largest economy, only recently overtaken by China’s.

[...]

Japan’s national output is high both because Japan has a large population (second only to that of the United States among rich democracies) and because it has high average individual productivity.

[...]

In relative terms, Japan’s proportion of its gross domestic product (abbreviated GDP) that it devotes to R & D, 3.5%, is nearly double that of the U.S. (only 1.8%), and still considerably higher than that of two other countries known for their R & D investments, Germany (2.9%) and China (2.0%).

[...]

Japanese life expectancy is the highest in the world: 80 years for men, 86 for women.

[...]

Japan is the world’s third-most egalitarian nation in its distribution of income, behind only Denmark and Sweden.

[...]

Literacy and attained educational levels in Japan are close to the highest in the world.

[...]

As foreign visitors to Japan quickly notice, its capital Tokyo rivals Singapore as the cleanest city in Asia, and is one of the cleanest in the world.

[...]

(Interpretative texts at Japanese archaeological sites sometimes proudly point out site evidence for Japanese cleanliness already in ancient times.)

[...]

Visitors also notice the safety and low crime rates of Japanese cities.

[...]

Ethnic tensions are low compared to the U.S. and Europe, because of Japan’s ethnic homogeneity and very small ethnic minorities.

[...]

Japanese agricultural productivity is high because of Japan’s combination of temperate climate, freedom from tropical agricultural pests, high rainfall concentrated in the summer growing season, and fertile volcanic soils.

[...]

As a result of all those environmental advantages, Japan was unusual in the ancient world in that, already at least 10,000 years before the adoption of agriculture, Japanese hunter-gatherers had settled down in villages and made pottery, rather than living as nomads with few material possessions.

[...]

Until Japan’s population explosion within the last century-and-a-half, Japan was self-sufficient in food.

[...]

The debt is currently about 2.5 times Japan’s annual GDP, i.e., the value of everything produced in Japan in one year.

[...]

First, most of the debt is not owed to foreign creditors, but to bond-holding Japanese individuals, Japanese businesses and pension funds (many of them owned by the government itself), and the Bank of Japan, none of which play tough with the Japanese government.

[...]

Despite all the debt that the Japanese government owes to Japanese themselves, Japan is a net creditor nation for other countries, which owe money to Japan.

[...]

Second, interest rates in Japan are kept low (below 1%) by government policy, in order to keep a lid on government interest payments.

[...]

Finally, Japanese as well as foreign creditors still have so much confidence in the government’s ability to pay that they continue to buy government bonds.

[...]

The other fundamental problems most often acknowledged by Japanese people themselves are the four linked issues of women’s roles, Japan’s low and declining birth rate, its declining population size, and its aging population.

[...]

Whereas women account for 49% of Japanese university students and 45% of entry-level job holders, they account for only 14% of university faculty positions (versus 33%–44% in the U.S., United Kingdom, Germany, and France), 11% of middle-level to senior management positions, 2% of positions on boards of directors, 1% of business executive committee members, and less than 1% of CEOs.

[...]

Work obstacles for women include the long work hours, the expectation of post-work employee socializing, and the problem of who will take care of the children if a working mother is expected to stay out socializing, and if her husband is also unavailable or unwilling.

[...]

Instead, 70% of Japanese working women quit work upon the birth of their first child, and most of them don’t return to work for many years, if ever.

[...]

Little child care is available to Japanese working mothers because of the lack of immigrant women to do private child care (see below), and because there are so few private or government child-care centers, unlike the situation in the U.S. and in Scandinavia, respectively.

[...]

Low and dropping birth rates prevail throughout the First World. But Japan has nearly the world’s lowest birth rate: 7 births per year per 1,000 people, compared to 13 in the U.S., 19 averaged over the whole world, and more than 40 in some African countries.

[...]

For the whole world that number averages 2.5 babies; for the First World countries with the biggest economies, it varies between 1.3 and 2.0 babies (e.g., 1.9 for the U.S.). The number for Japan is only 1.27 babies, at the low end of the spectrum; South Korea and Poland are among the few countries with lower values.

[...]

Part of the reason for Japan’s falling birth rate is that Japan’s age of first marriage has been rising: it’s now around 30 for both men and women.

[...]

A bigger reason for the falling birth rate is that the rate of marriage itself (i.e., the number of marriages per 1,000 people per year) is falling rapidly in Japan. One might object that the marriage rate is also falling in most other developed countries without causing the catastrophic drop in the birth rate that Japan is experiencing, because so many births are to unwed mothers: 40% of all births in the U.S., 50% in France, and 66% in Iceland. But that mitigation doesn’t apply to Japan, where unwed mothers account for a negligible proportion of births: only 2%.

[...]

Japan is already the country with the world’s highest life expectancy (84, compared to 77 for the U.S. and just 40–45 for many African countries), and with the highest percentage of old people. Already now, 23% of Japan’s population is over 65, and 6% is over 80. By the year 2050 those numbers are projected to be nearly 40% and 16%, respectively. (The corresponding numbers for the African country of Mali are only 3% and 0.1%.)

[...]

Japan’s ratio of workers to retirees has been falling catastrophically: from 9 workers per retiree in 1965, to 2.4 today, to a projected 1.3 in 2050.

[...]

Japan is, and prides itself on being, the most ethnically homogenous affluent or populous country in the world. It doesn’t welcome immigrants, makes it difficult for anyone who wants to immigrate to do so, and makes it even more difficult for anyone who has succeeded in immigrating to receive Japanese citizenship.

[...]

As a percentage of a country’s total population, immigrants and their children constitute 28% of Australia’s population, 21% of Canada’s, 16% of Sweden’s, and 14% of the U.S.’s, but only 1.9% of Japan’s.

[...]

Among refugees seeking asylum, Sweden accepts 92%, Germany 70%, Canada 48%, but Japan only 0.2%.

[...]

Foreign workers constitute 15% of the workforce in the U.S. and 9% in Germany, but only 1.3% in Japan.

[...]

For instance, it is not widely known that 10% of the victims killed at Hiroshima by the first atomic bomb were Korean laborers working there.

[...]

The percentage of Japanese opposed to increasing the number of foreign residents is 63%; 72% agree that immigrants increase crime rates; and 80% deny that immigrants improve society by introducing new ideas, unlike the 57%–75% of Americans, Canadians, and Australians who do believe that immigrants improve society.

[...]

“Unlike Germans, the Japanese have not had a catharsis and rid themselves of the poison in their system. They have not educated their young about the wrong they had done. Hashimoto [a Japanese prime minister] expressed his ‘deepest regrets’ on the 52nd anniversary of the end of World War Two (1997) and his ‘profound remorse’ during his visit to Beijing in September 1997. However, he did not apologize, as the Chinese and Koreans wished Japan’s leader to do. I do not understand why the Japanese are so unwilling to admit the past, apologize for it, and move on. For some reason, they do not want to apologize. To apologize is to admit having done a wrong. To express regrets or remorse merely expresses their present subjective feelings. They denied the massacre of Nanking took place; that Korean, Filipino, Dutch, and other women were kidnapped or otherwise forced to be ‘comfort women’ (a euphemism for sex slaves) for Japanese soldiers at the war fronts; that they carried out cruel biological experiments on live Chinese, Korean, Mongolian, Russian, and other prisoners in Manchuria. In each case, only after irrefutable evidence was produced from their own records did they make reluctant admissions. This fed suspicions of Japan’s future intentions. Present Japanese attitudes are an indication of their future conduct. If they are ashamed of their past, they are less likely to repeat it.”

[...]

Until 1853, while Japan was closed to the outside world and did negligible importing, it was self-sufficient in natural resources.

[...]

Forced to depend on its own forests, and alarmed by their declines in the 1600’s, Japan pioneered in developing scientific forestry methods independently of Germany and Switzerland, in order to manage its forests.

[...]

Japan is also the major country most dependent on imported food to feed its citizens. Japan today has the highest ratio (a factor of 20) of agricultural imports to agricultural exports among major countries.

[...]

Japan appears to be the developed country with the least support for and the strongest opposition to sustainable resource policies overseas.

[...]

“In spite of my experiences during the Japanese occupation and the Japanese traits I had learned to fear, I now respect and admire them. Their group solidarity, discipline, intelligence, industriousness, and willingness to sacrifice for the nation make them a formidable and productive force. Conscious of the poverty of their resources, they will continue to make that extra effort to achieve the unachievable. Because of their cultural values, they will be lonely survivors after any catastrophe. From time to time they are hit by the unpredictable forces of nature—earthquakes, typhoons, and tsunamis. They take their casualties, pick themselves up, and rebuild.… I was amazed at how life was returning to normal when I visited Kobe in November 1996, one-and-a-half years after the [massive] earthquake. They had taken this catastrophe in their stride and settled to a new daily routine.”

The influence of those Asian immigrants has been far out of proportion to their numbers

Wednesday, June 19th, 2019

Australia has accepted many Asian immigrants, Jared Diamond notes (in Upheaval):

Under the Colombo Plan for Asian development, Australia accepted 10,000 Asian student visitors in the 1950’s.

[...]

The despised dictation test for prospective immigrants was dropped in 1958.

[...]

The Migration Act of that same year allowed “distinguished and highly qualified Asians” to immigrate.

[...]

Between 1978 and 1982 Australia admitted more Indochinese refugees, as a percentage of its population, than any other country in the world.

[...]

By the late 1980’s, nearly half of Australians were either born overseas or had at least one overseas-born parent.

[...]

By 1991, Asians represented over 50% of immigrants to Australia.

[...]

The influence of those Asian immigrants has been far out of proportion to their numbers: Asian students have come to occupy over 70% of the places in Sydney’s top schools, Asian university students appeared to account for a sizeable fraction of the students whom I saw strolling across the University of Queensland campus in 2008, and Asians and other non-Europeans now make up more than half of Australian medical students.

[...]

In 1986 Australia ended the right of final appeal to Britain’s Privy Council, thereby abolishing the last real trace of British sovereignty and making Australia fully independent at last.

[...]

In 1999 Australia’s High Court declared Britain to be a “foreign country.”

It was regarded as a betrayal of Australia by its British mother country

Tuesday, June 18th, 2019

World War Two had immediate consequences for Australia’s immigration policy, Jared Diamond notes (in Upheaval):

But Australia’s main contribution to World War One was to contribute a huge volunteer force—400,000 soldiers, constituting more than half of all Australian men eligible to serve, out of a total Australian population under 5 million—to defend British interests half-way around the world from Australia, in France and the Mideast.

[...]

More than 300,000 were sent overseas, of whom two-thirds ended up wounded or killed.

[...]

Almost every small rural Australian town still has a cenotaph in the town center, listing the names of local men killed in the war.

[...]

Australia abolished the draft in 1930 and built only a small air force and navy.

[...]

On February 15, 1942, the British general in command at Singapore surrendered to the Japanese army, sending 100,000 British and Empire troops into prisoner-of-war camps—the most severe military defeat that Britain has suffered in its history (Plate 7.7).

[...]

Sadly, those troops surrendering included 2,000 Australian soldiers who had arrived in Singapore only three weeks earlier, on January 24, in order to serve in the hopeless task of its defense.

[...]

In the absence of British ships to protect Australia, the same Japanese aircraft carriers that had bombed the American naval base at Pearl Harbor heavily bombed the Australian city of Darwin on February 19, 1942 (Plate 7.8).

[...]

To Australians, the fall of Singapore was not just a shock and a frightening military setback: it was regarded as a betrayal of Australia by its British mother country.

[...]

As a result, although Australia was attacked directly in World War Two but not in World War One, Australia’s casualties in World War Two were paradoxically less than half of those in World War One.

[...]

After World War Two there unfolded a gradual loosening of Australia’s ties to Britain and a shift in Australians’ self-identification as “loyal British in Australia,” resulting in a dismantling of the White Australia policy.

[...]

World War Two had immediate consequences for Australia’s immigration policy. Already in 1943, Australia’s prime minister concluded that the tiny population of Australians (less than 8 million in 1945) could not hold their huge continent against threats from Japan (population then over 100 million), Indonesia (just 200 miles away) with a population approaching 200 million, and China (population 1 billion).

[...]

All of Japan and Java is wet and fertile, and much of the area of those islands is suitable for highly productive agriculture. But most of Australia’s area is barren desert, and only a tiny fraction is productive farmland.

[...]

But Australia’s prime ministers in the 1940’s were neither ecologists nor economists, and so post-war Australia did embark on a crash program of encouraging immigration.

[...]

As a first step in that direction, Italian and German prisoners of war who had been brought to Australia were permitted to remain.

[...]

Australia’s minister for immigration from 1945 to 1949, Arthur Calwell, was an outspoken racist. He even refused to allow Australian men who had been so unpatriotic as to marry Japanese, Chinese, or Indonesian women to bring their war-brides or children into Australia. Calwell wrote, “No Japanese women, or any half-castes either, will be admitted to Australia; they are simply not wanted and are permanently undesirable… a mongrel Australia is impossible.”

[...]

In 1947 Calwell toured refugee camps in post-war Europe, found that they offered “splendid human material,” and noted approvingly of the Baltic Republics, “Many of their people were red-headed and blue-eyed. There were also a number of natural platinum blonds of both sexes.” The result of that selective encouragement of immigration was that, from 1945 to 1950, Australia received about 700,000 immigrants (a number nearly equal to 10% of its 1945 population), half of them reassuringly British, the rest from other European countries.

[...]

The undermining of the White Australia policy that produced the Asian immigrants and Asian restaurants awaiting me in Brisbane in 2008 resulted from five considerations: military protection, political developments in Asia, shifts of Australian trade, the immigrants themselves, and British policy.

[...]

To the shock of Australians, in 1967 Britain announced its intent to withdraw all of its military forces east of the Suez Canal. That marked the official end to Britain’s long-standing role as Australia’s protector.

[...]

By the 1980’s Australia’s leading trade partner was—Japan!—followed by the U.S., with Britain far behind.

[...]

Hence Britain applied to join the EEC. That application and its sequels constituted a shock to Australia’s and Britain’s relationship even more fundamental than had been the fall of Singapore, although the latter was more dramatic and symbolic, and lingers today as a bigger cause of festering resentment to Australians.

[...]

Britain’s Commonwealth Immigration Act of 1962, actually aimed at halting Commonwealth immigration from the West Indies and Pakistan, avoided appearances of racism by ending the automatic right of all Commonwealth citizens (including Australians) to enter and reside in Britain.

[...]

Britain’s 1968 Immigration Act barred automatic right of entry into Britain for all FOREIGNERS (Australians were now declared to be foreigners!) without at least one British-born grandparent, thereby excluding a large fraction of Australians at that time.

[...]

In 1972 Britain declared Australians to be ALIENS (!).

[...]

From an Australian perspective, it may seem that Australian identity changed suddenly and comprehensively in 1972, when Australia’s Labour Party under Prime Minister Gough Whitlam came to power for the first time in 23 years. In his first 19 days in office, even before he had appointed a new cabinet, Whitlam and his deputy embarked on a crash program of selective change in Australia, for which there are few parallels in the modern world in its speed and comprehensiveness. The changes introduced in those 19 days included: end of the military draft (national conscription); withdrawal of all Australian troops from Vietnam; recognition of the People’s Republic of China; announced independence for Papua New Guinea, which Australia had been administering for over half-a-century under a mandate from the League of Nations and then from the United Nations; banning visits by racially selected overseas athletic teams (a rule aimed especially at all-white South African teams); abolishing the nomination of Australians for Britain’s system of honors (knighthoods, OBEs, KCMGs, and so on) and replacing them with a new system of Australian honors; and—officially repudiating the White Australia policy.

[...]

Once Whitlam’s whole cabinet had been approved, it then adopted more steps in the crash program: reduction of the voting age to 18; increase in the minimum wage; giving representation to both the Northern Territory and the Australian Capital Territory in the federal Senate; granting legislative councils to both of those territories; requiring environmental impact statements for industrial developments; increased spending on Aborigines; equal pay for women; no-fault divorce; a comprehensive medical insurance scheme; and big changes in education that included abolishing university fees, boosts in financial aid for schools, and transfer from the states to the Australian Commonwealth of the responsibility for funding tertiary education.

[...]

Whitlam correctly described his reforms as a “recognition of what has already happened” rather than as a revolution arising out of nothing.

[...]

In 1954 the first visit to Australia by a reigning British monarch, Queen Elizabeth, was greeted by an enormous outpouring of pro-British sentiment: over 75% of all Australians turned out on the streets to cheer her (Plate 7.9). But—by the time that Queen Elizabeth visited Australia again in 1963, two years after Britain’s first EEC application, Australians were much less interested in her and in Britain.

The Western Allies needed West Germany to become strong again

Friday, June 14th, 2019

Jared Diamond explains (in Upheaval) the challenge of rebuilding Germany after the war:

Millions of Germans were searching for missing family members, of whom some miraculously turned up alive years later. But most never turned up, and for many of them the time and place and circumstances of their deaths remain forever unknown. My first German teacher, living in exile in 1954, happened to mention having a son. When I naïvely asked him about his son, my teacher burst out in pain, “They took him away, and we never heard anything about him again!” By the time that I met my teacher, he and his wife had been living with that uncertainty for 10 years. Two of my later German friends were “luckier”: one learned of her father’s probable death “only” a year after the last news from him, and another learned of his brother’s death after three years.

[...]

The term “German Democratic Republic” is remembered as a big lie, like the name “Democratic People’s Republic of Korea” that North Korea adopts for itself today. It’s easy now to forget that not just Soviet brute force but also German communist idealism contributed to East Germany’s founding, and that numerous German intellectuals chose to move to East Germany from West Germany or from exile overseas.

[...]

The pre-war public transport system in Berlin (U-Bahn and S-Bahn) included lines that connected West and East Berlin, so that anyone in East Berlin could get into West Berlin just by hopping on a train. When I first visited Berlin in 1960, like other Western tourists I took the U-Bahn to visit East Berlin and to return to West Berlin.

[...]

In 1953 dissatisfaction in East Germany blew up in a strike that turned into a rebellion, crushed by Soviet troops.

[...]

Finally, on the night of August 13, 1961, while I was living in Germany, the East German regime suddenly closed the East Berlin U-Bahn stations and erected a wall between East and West Berlin, patrolled by border guards who shot and killed people trying to cross the wall (Plate 6.3). I recall the disbelief, shock, and rage of my West German friends the morning after the wall’s erection.

[...]

As late as 1961, when I was about to go live in Germany, my (American) father advised me in all seriousness to be ready to flee to a safe refuge in Switzerland at the first signs of danger in Europe.

[...]

The Western Allies needed West Germany to become strong again, as a bulwark against communism. Their other motives for wanting Germany to become strong were to reduce the risk that a weak and frustrated Germany might descend again into political extremism (as had happened after World War One), and to reduce the economic costs to the Allies of having to continue to feed and support an economically weak West Germany.

[...]

By the time that I moved from Britain to West Germany, West Germany felt more prosperous and contented than was Britain.

[...]

Politically, by 1955 West Germany had regained sovereignty, and Allied military occupation ended.

[...]

At the end of World War Two, the Allies prosecuted the 24 top surviving Nazi leaders at Nuremberg for war crimes. Ten were condemned to death, of whom the highest ranking were the foreign minister Joachim von Ribbentrop and the Luftwaffe chief Hermann Göring. (The latter succeeded in committing suicide by poison during the night before his scheduled execution.) Seven others were sentenced to long or lifelong prison terms.
LOCATION: 3032

[...]

In Germany the trials became dismissed as “Siegerjustiz”: mere revenge taken by the victors upon the vanquished.

[...]

Adenauer’s policy upon becoming chancellor was described as “amnesty and integration,” which was a euphemism for not asking individual Germans about what they had been doing during the Nazi era.

[...]

Instead, the government’s focus was overwhelmingly on the urgent tasks of feeding and housing tens of millions of underfed and homeless Germans, rebuilding Germany’s bombed cities and ruined economy, and re-establishing democratic government after 12 years of Nazi rule.

[...]

As a result, most Germans came to adopt the view that Nazi crimes were the fault of just a tiny clique of evil individual leaders, that the vast majority of Germans were innocent, that ordinary German soldiers who had fought heroically against the Soviets were guiltless, and that (by around the mid-1950’s) there were no further important investigations of Nazi crimes left to be carried out.

[...]

Further contributing to that failure of the West German government to prosecute Nazis was the widespread presence of former Nazis among post-war government prosecutors themselves: for instance, it turned out that 33 out of 47 officials in the West German federal criminal bureau (Bundeskriminalamt), and many members of the West German intelligence service, had been leaders of the Nazi fanatical SS organization.

[...]

Bauer did not succeed in tracking down Mengele, who eventually died in Brazil in 1979, or Bormann, who it later turned out had committed suicide in 1945 around the same time as did Hitler.

[...]

But Bauer did receive information about the location of Eichmann, who had fled to Argentina.

[...]

Instead, he relayed the news of Eichmann’s whereabouts to the Israeli Secret Service, which eventually succeeded in kidnapping Eichmann in Argentina, secretly flying him to Israel in an El Al jet, putting him on public trial, and eventually hanging him after a trial that drew worldwide attention not just to Eichmann but to the whole subject of individual responsibility for Nazi crimes.

[...]

The Nazi defendants being prosecuted by Bauer all tended to offer the same set of excuses: I was merely following orders; I was conforming to the standards and laws of my society at the time; I was not the person who had responsibility for those people getting killed; I merely organized railroad transport of Jews being transported to extermination camps; I was just a pharmacist or a guard at Auschwitz; I didn’t personally kill anyone myself; I was blinded by belief in authority and ideology proclaimed by the Nazi government, and that made me incapable of recognizing that what I was doing was wrong.

The coup was welcomed with relief and broad support

Monday, June 10th, 2019

Chile’s long-expected coup took place on September 11, 1973, after all three branches of the armed forces — army, navy, and air force — had agreed on a plan 10 days previously. Jared Diamond explains (in Upheaval):

The Chilean air force bombed the president’s palace in Santiago, while Chilean army tanks shelled it (Plate 4.3). Recognizing his situation to be hopeless, Allende killed himself with the machine gun presented to him by Fidel Castro. I confess that I had been skeptical about that claim, and had suspected that Allende had actually been killed by coup soldiers. But an investigative commission set up by Chile’s restored democratic government after the end of military government concluded that Allende really did die alone, by suicide. That conclusion was confirmed for me by a Chilean friend who knew a fireman of the fire brigade that went to the burning palace and met Allende’s surviving final companions, including the last person to see Allende alive.

The coup was welcomed with relief and broad support from centrist and rightist Chileans, much of the middle class, and of course the oligarchs.

[...]

One Chilean friend recounted to me the story of a dinner party of 18 people that he had attended in December 1973, just three months after the coup. When the subject of conversation turned to the question how long the guests present expected the junta to remain in power, 17 of the 18 guests predicted just two years. The 18th guest’s prediction of seven years was considered absurd by the other guests; they said that that couldn’t happen in Chile, where all previous military governments had quickly returned power to a civilian government. No one at that dinner party foresaw that the junta would remain in power for almost 17 years. It suspended all political activity, closed Congress, banned left-wing political parties and even the centrist Christian Democrats (to the great surprise of those centrists), took over Chile’s universities, and appointed military commanders as university rectors.

The junta member who became its leader, essentially by accident, had joined it at the last minute and had not led the coup planning: General Augusto Pinochet (Plate 4.4).

[...]

The CIA’s appraisal of Pinochet was: quiet, mild-mannered, honest, harmless, friendly, hard-working, businesslike, religious, modest in lifestyle, a devoted tolerant husband and father, with no known interests outside the military and the Catholic Church and his family—in short, not a person likely to lead a coup. The junta expected itself to be a committee of equals, with rotating leadership. They chose Pinochet as their initial leader mainly because he was its oldest member, because he was chief of staff of the largest branch of the Chilean armed forces (the army itself), and perhaps because they shared the CIA’s view of Pinochet as unthreatening.

[...]

Within the first 10 days, thousands of Chilean leftists were taken to two sports stadiums in Santiago, interrogated, tortured, and killed.

[...]

Hundreds of Chileans were tracked down and killed in other South American countries, Europe, and even one in the U.S. The U.S. case occurred in 1976, in Washington, DC, only 14 blocks from the White House, when a car bomb killed the former Chilean diplomat Orlando Letelier (minister of defense under Allende), plus an American colleague.

[...]

By 1976, Pinochet’s government had arrested 130,000 Chileans, or 1% of Chile’s population. While the majority of them were eventually released, DINA and other junta agents killed or “disappeared” thousands of Chileans (most of them under the age of 35), plus four American citizens and various citizens of other countries.

[...]

South American military governments usually prefer an economy that they control themselves for their own benefit, rather than a free-market economy that they don’t control. Hence the junta’s adoption of the Chicago Boys’ policies was unexpected, and it remains uncertain why it happened.

[...]

The adoption is sometimes attributed to the 1975 Chilean visit of Milton Friedman himself, who met with Pinochet for 45 minutes and followed up the meeting by sending Pinochet a long letter full of recommendations. But Friedman came away from the meeting with a low opinion of Pinochet, who asked Friedman only one question during their conversation. In fact, the Chicago Boys’ program differed significantly from Friedman’s recommendations and drew on detailed plans that Chilean economists had already laid out in a document nicknamed “the brick” (because it was so lengthy and heavy).

[...]

Whatever the motives, the resulting free-market policies included the re-privatization of hundreds of state-owned businesses nationalized under Allende (but not of the copper companies); the slashing of the government deficit by across-the-board cuts of every government department’s budget by 15% to 25%; the slashing of average import duties from 120% to 10%; and the opening of Chile’s economy to international competition.

[...]

That caused the Chicago Boys’ program to be opposed by Chile’s oligarchy of industrialists and traditional powerful families, whose inefficient businesses had previously been shielded from international competition by high duties and were now forced to compete and innovate.

[...]

But the results were that the rate of inflation declined from its level of 600% per year under Allende to just 9% per year, the Chilean economy grew at almost 10% per year, foreign investments soared, Chilean consumer spending rose, and Chilean exports eventually diversified and increased.

[...]

In a democracy it would have been difficult to inflict such widespread suffering on poor Chileans, as well as to impose government policies opposed by rich business oligarchs.

[...]

Thus, Chile after Pinochet reverted to being a functioning democracy still anomalous for Latin America, but with a huge selective change: a willingness to tolerate, compromise, and share and alternate power.

[...]

The new governments continued most of Pinochet’s free-market economic policies, because those policies were seen to have been largely beneficial in the long run. In fact, Concertación governments carried those policies even further, by reducing import tariffs so that they came to average only 3% by 2007, the lowest in the world.

[...]

Average incomes in Chile were only 19% of U.S. averages in 1975; that proportion had risen to 44% by the year 2000, while average incomes in the rest of Latin America were dropping over that same time. Inflation rates in Chile are low, the rule of law is strong, private property rights are well protected, and the pervasive corruption with which I had to deal during my 1967 visit has decreased.

[...]

But even Chilean rightists were shocked by a U.S. Senate subcommittee’s revelation that Pinochet had stashed $30 million in 125 secret U.S. bank accounts. While rightists had been prepared to tolerate torturing and killing, they were disillusioned to learn that Pinochet, whom they had considered different from and better than other dishonest Latin American dictators, stole and hid money.

Chile had a long history of democratic government

Sunday, June 9th, 2019

In 1967 Jared Diamond spent a sabbatical in Chile, at a time when everything there seemed peaceful, as he explains in Upheaval:

My Chilean hosts emphasized to me that Chile was very different from other Latin American countries. Chile had a long history of democratic government, they explained, punctuated by only a few relatively bloodless military coups. Chile didn’t have frequent military governments, as did Peru and Argentina and other South and Central American countries. It rated as the most politically stable country in all of Latin America.

[...]

“We Chileans know how to govern ourselves.”

[...]

In the course of a military coup on September 11, Chile’s democratically elected president committed suicide in the presidential palace. Not only did the Chilean junta kill Chileans in large numbers, torture them in larger numbers, devise vile new techniques of psychological and physical torture, and drive still more Chileans into exile.

[...]

It also directed terrorist political killings outside Chile, including what was, until the World Trade Towers attack of September 11 of 2001 (coincidentally on the anniversary of Chile’s coup), the only terrorist political killing of an American citizen on American soil (in Washington, DC, in 1976).

[...]

When you look at a map you’ll be struck by the fact that Chile is the longest and thinnest country in the world.

[...]

Geographically, Chile is isolated from other countries by the high chain of the Andes in the east separating it from Argentina, and by the world’s most barren desert in the north separating it from Bolivia and Peru.

[...]

Those advantages are the higher average agricultural productivity and the lower average disease burden of temperate-zone areas compared to the tropics.

[...]

As for Chile’s history and people, before European arrival the area that is now Chile supported only a sparse Native American population, lacking the cultural and political achievements of the rich, populous, powerful Inca Empire to the north in what is now Bolivia, Peru, and Ecuador.

[...]

Already in his student days he became a declared Marxist, and a founder of Chile’s Socialist Party, which was more extreme left-wing than Chile’s Communist Party. But Allende rated as moderate by Chilean socialist standards, because his aim was to bring Marxist government to Chile by democratic means, not by armed revolution.

[...]

In the 1970 elections Allende received the largest share of the popular vote (36%), but only barely, because the much larger percentage (64%) of the electorate opposed to him was split between a right-wing coalition (35%, only 1.4% lower than Allende’s share!) and a center coalition (28%). Since Allende had obtained only a plurality rather than a majority of votes, his election required confirmation by Congress, which did confirm him in return for a series of constitutional amendments guaranteeing freedom of the press and other freedoms.

[...]

Under President Frei, Chile had already expropriated (and paid for) a 51% interest in the companies; the U.S. feared (correctly, as it turned out) that Allende might expropriate the remaining 49% without paying.

[...]

Even though he knew that his candidacy had been supported by only 36% of Chilean voters and had been opposed by the Chilean armed forces and the U.S. government, he rejected moderation, caution, and compromise, and instead pursued policies guaranteed to be anathema to those opposing forces. His first measure, with the unanimous support of Chile’s Congress, was to nationalize the U.S.-owned copper companies without paying compensation; that’s a recipe for making powerful international enemies.

[...]

He nationalized other big international businesses. He horrified the Chilean armed forces by bringing large numbers of Cubans into Chile, by carrying a personal machine gun given to him by Fidel Castro, and by inviting Castro to Chile for a visit that stretched out to five weeks. He froze prices (even of small consumer items like shoe-laces), replaced free-market elements of Chile’s economy with socialist-style state planning, granted big wage increases, greatly increased government spending, and printed paper money to cover the resulting government deficits. He extended President Frei’s agrarian reform by expropriating large estates and turning them over to peasant cooperatives. While that agrarian reform and others of Allende’s goals were well-intentioned, they were carried out incompetently. For instance, one Chilean friend of mine, at that time still a 19-year-old not-yet-graduated student economist, was given major responsibility for setting Chilean prices of consumer goods.

[...]

The outcome of all those developments was the 1973 coup that many of my Chilean friends characterize as inevitable, even though the form that the coup took was not inevitable.

[...]

“Allende fell because his economic policies depended on populist measures that had failed again and again in other countries. They produced short-term benefits, at the cost of mortgaging Chile’s future and creating runaway inflation.”

[...]

I keep asking myself: why on earth did Allende, an experienced politician and a moderate, pursue extremist policies that he knew were unacceptable to most Chileans, as well as to Chile’s armed forces?

Plastic bags are thought to endanger marine animals

Tuesday, May 14th, 2019

Plastic bags are thought to endanger marine animals, but they may protect us humans:

San Francisco County was the first major US jurisdiction to enact such a regulation, implementing a ban in 2007 and extending it to all retailers in 2012. There is evidence, however, that reusable grocery bags, a common substitute for plastic bags, contain potentially harmful bacteria, especially coliform bacteria such as E. coli. We examine deaths and emergency room admissions related to these bacteria in the wake of the San Francisco ban. We find that both deaths and ER visits spiked as soon as the ban went into effect. Relative to other counties, deaths in San Francisco increase by 50-100 percent, and ER visits increase by a comparable amount. Subsequent bans by other cities in California appear to be associated with similar effects.

“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

Debt is free and Western criticisms of excessive infrastructure investment are nonsense

Friday, May 10th, 2019

T. Greer describes the central problems with China’s Belt and Road initiative:

There is also a gap between how BRI projects are supposed to be chosen and how they actually have been selected. Xi and other party leaders have characterized BRI investment in Eurasia as following along defined “economic corridors” that would directly connect China to markets and peoples in other parts of the continent. By these means the party hopes to channel capital into areas where it will have the largest long-term benefit and will make cumulative infrastructure improvements possible.

This has not happened: one analysis of 173 BRI projects concluded that with the exception of the China-Pakistan Economic Corridor (CPEC) “there appears to be no significant relationship between corridor participation and project activity… [suggesting that] interest groups within and outside China are skewing President Xi’s signature foreign policy vision.”

This skew is an inevitable result of China’s internal political system. BRI projects are not centrally directed. Instead, lower state bodies like provincial and regional governments have been tasked with developing their own BRI projects. The officials in charge of these projects have no incentive to approve financially sound investments: by the time any given project materializes, they will have been transferred elsewhere. BRI projects are shaped first and foremost by the political incentives their planners face in China: There is no better way to signal one’s loyalty to Xi than by laboring for his favored foreign-policy initiative. From this perspective, the most important criteria for a project is how easily the BRI label can be slapped on to it…..

The problems China has had with the BRI stem from contradictions inherent in the ends party leaders envision for the initiative and the means they have supplied to reach them. BRI projects are chosen through a decentralized project-management system and then funded through concessional loans offered primarily by PRC policy banks. This is a recipe for cost escalation and corruption. In countries like Cambodia, a one-party state ruled by autocrats, this state of affairs is viable, for there is little chance that leaders will be held accountable for lining their pockets (or, more rarely, the coffers of their local communities) at the entire nation’s expense. But most BRI countries are not Cambodia. In democracies this way of doing things is simply not sustainable, and in most BRI countries it is only so long before an angry opposition eager to pin their opponents with malfeasance comes to power, armed with the evidence of misplaced or exploitative projects.

He goes on to cite Andrew Batson’s explanation:

Local governments discovered they could borrow basically without limit to fund infrastructure projects, and despite many predictions of doom, those debts have not yet collapsed. The lesson China has learned is that debt is free and that Western criticisms of excessive infrastructure investment are nonsense, so there is never any downside to borrowing to build more infrastructure. China’s infrastructure-building complex, facing diminishing returns domestically, is now applying that lesson to the whole world.

In Belt and Road projects, foreign countries simply take the place of Chinese local governments in this model (those who detect a neo-imperial vibe around the Belt and Road are, in this sense, onto something). Even the players are the same. In the 1990s, China Development Bank helped invent the local-government financing vehicle structure that underpinned the massive domestic infrastructure boom. Now, China Development Bank is one of the biggest lenders for overseas construction projects.

Those who defend the Belt and Road against the charge of debt-trap diplomacy are technically correct. But those same defenders also tend to portray the lack of competitive tenders and over-reliance on Chinese construction companies in Belt and Road projects as “problems” that detract from the initiative’s promise. They miss the central role of the SOE infrastructure-complex interest group in driving the Belt and Road. Structures that funnel projects funded by state banks to Chinese SOEs aren’t “problems” from China’s perspective – they are the whole point.

Economists love property taxes, but no one else does

Wednesday, April 17th, 2019

Economists love property taxes, but no one else does:

When the value of land rises, it’s generally not because of something the landowner has done. The resulting rents and other monetary gains, Adam Smith wrote in 1776, “are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own.”

This made the landowner, Smith continued in The Wealth of Nations, an excellent target for taxation.

[...]

Income taxes and Social Security contributions are withheld from paychecks before the recipients get their hands on the money. Sales taxes (and value-added taxes outside the U.S.) are remitted by merchants and other business. It’s only with property taxes that a regular person gets a bill and has to pay it.

There’s clearly something to that, although for many homeowners property taxes are bundled into mortgage payments and thus a bit less obviously visible. Still, I can think of at least two other reasons for property taxes’ unpopularity that are actually side effects of what economists like about them. To wit:

  1. Property tax bills can rise without property owners doing anything, and
  2. Rising tax bills can push property owners (homeowners in particular) to make economic decisions they might prefer to avoid.

People can adjust their spending, and often their income. But they can’t help it if, say, house prices go up 80 percent in just three years — as they did in California from 1975 to 1978. Well, actually, they could help it, by going to the polls in June 1978 and approving Proposition 13, a set of restrictions on property tax rates and assessments that have shaped the state’s economy and government ever since.

[...]

Also, taxing property is in general more problematic politically than it was back when Henry George’s ideas were in vogue in the late 1800s and early 1900s — because homeowners have gone from a minority of the U.S. population to a majority with an especially high propensity to vote.

The contemporary world is always testing his belief in central banking

Sunday, April 14th, 2019

Tyler Cowen considers some arguments for a gold standard:

Historical data indicates that industrial production volatility was not higher before 1914, when the U.S. was on the gold standard, compared to after 1947, when it mostly wasn’t. And there are similar results for the volatility of unemployment. That’s not quite an argument for the gold standard, but it should cause opponents of the gold standard to think twice. Whatever the imperfections of a gold standard might be, monetary authorities make a lot of mistakes, too.

Furthermore, in the broader historical context, including the more distant past, the gold standard doesn’t look so bad. The age of the gold standard (and sometimes silver standard, and sometimes bimetallism) in the 19th century was largely one of peace and economic growth, running from 1815 until World War I. The fiat money era that followed was a disaster, as the 1920s brought monetary chaos, competitive devaluations, and even some hyperinflations and deflations, a few of which were driven by the desire to restore the old gold par at incorrect rates. It would have been better had the world managed to keep its gold-centered monetary order of 1913.

Even the Bretton Woods arrangement, which has a good record in terms of stability and growth, involved gold convertibility of a sort, albeit with no domestic convertibility and lots of pressures to discourage actual conversion from foreigners. Once the tie of the dollar to gold broke entirely in the early 1970s, inflation and interest rates were high and again monetary chaos followed. From the vantage point of, say, 1979, some form of gold standard really did seem better.

What was not obvious then was that monetary policy was going to be so good and so stable for the next four decades, albeit with a number of mistakes. Today’s case for the gold standard is based on the view that these recent decades of good fiat money management are a historical outlier and cannot be sustained. I don’t share that opinion, but neither do I think it is crazy or a sign of extreme ignorance.

So why don’t I favor a gold standard? First, governments have a long history of interfering with gold standards, for better or worse. So it doesn’t really remove politics from monetary policy. Second, central banks should respond with extreme countercyclical pressure when a financial crisis hits, such as in 2008. That is harder to do with a gold standard, and usually it requires the suspension of gold convertibility. Third, the price of gold is now greatly influenced by demand from China and India, and it seems unwise for that to partially drive what is in essence U.S. monetary policy. Most generally, I still think central bank governance can do a better job than a gold-based system that sometimes creates excess deflationary pressures.

Nonetheless, the contemporary world is always testing my belief in central banking.