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Javier E

Robert W. Fogel Investigates Human Evolution - NYTimes.com - 0 views

www.nytimes.com/...estigates-human-evolution.html

nutrition health economic longevity econometrics cleometrics Fogel human evolution research world history

shared by Javier E on 27 Apr 11 - No Cached
  • the basic argument is rather simple: that the health and nutrition of pregnant mothers and their children contribute to the strength and longevity of the next generation. If babies are deprived of sufficient nutrition in the womb and early in life, they will be more fragile and more vulnerable to diseases later on. These weakened adults will, in turn, produce weaker offspring in a self-reinforcing spiral.
  • Technology rescued humankind from centuries of physical maladies and malnutrition, Mr. Fogel argues. Before the 19th century, most people were caught in an endless cycle of subsistence farming. A colonial-era farmer, for example, worked about 78 hours during a five-and-a-half-day week. People needed more food to grow and gain strength, but they were unable to produce more food without being stronger.
  • “In many parts of the world, including the United States in the 20th century, medical advances appear to be at least as important as improvements in nutritional intake,”
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  • the Harvard School of Public Health published a paper that used the height of women in 54 low- and middle-income countries to indicate how children in Africa, Latin America, Asia and the Middle East were faring. (The answer was not good: height had stayed the same or declined, particularly in Africa, suggesting that living conditions and disease controls for children have deteriorated.)
  • If food production is the most important factor, then focusing on economic growth might be the best policy, but if infectious disease is a major reason for chronic illness and premature death, then more aggressive public health measures might also be needed.
  • historians have not paid enough attention to changes in height (as a useful measure of nutrition and disease) or in lifespan. History textbooks, she complained, almost completely ignore the topic.
Javier E

The Curse of Econ 101 - The Atlantic - 1 views

www.theatlantic.com/...513155

economics policy minimum wage

shared by Javier E on 15 Jan 17 - No Cached
  • Poverty in the midst of plenty exists because many working people simply don’t make very much money. This is possible because the minimum wage that businesses must pay is low: only $7.25 per hour in the United States in 2016 (although it is higher in some states and cities). At that rate, a person working full-time for a whole year, with no vacations or holidays, earns about $15,000—which is below the poverty line for a family of two, let alone a family of four.
  • A minimum-wage employee is poor enough to qualify for food stamps and, in most states, Medicaid. Adjusted for inflation, the federal minimum is roughly the same as in the 1960s and 1970s, despite significant increases in average living standards over that period.
  • At first glance, it seems that raising the minimum wage would be a good way to combat poverty.
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  • The United States currently has the lowest minimum wage, as a proportion of its average wage, of any advanced economy,
  • On the other hand, two recent meta-studies (which pool together the results of multiple analyses) have found that increasing the minimum wage does not have a significant impact on employment.
  • The minimum wage has been a hobgoblin of economism since its origins
  • Think tanks including Cato, Heritage, and the Manhattan Institute have reliably attacked the minimum wage for decades, all the while emphasizing the key lesson from Economics 101: Higher wages cause employers to cut jobs.
  • In today’s environment of increasing economic inequality, the minimum wage is a centerpiece of political debate
  • The real impact of the minimum wage, however, is much less clear than these talking points might indicate.
  • In 1994, David Card and Alan Krueger evaluated an increase in New Jersey’s minimum wage by comparing fast-food restaurants on both sides of the New Jersey-Pennsylvania border. They concluded, “Contrary to the central prediction of the textbook model ... we find no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.”
  • Card and Krueger’s findings have been vigorously contested across dozens of empirical studies. Today, people on both sides of the debate can cite papers supporting their position, and reviews of the academic research disagree on what conclusions to draw.
  • economists who have long argued against the minimum wage, reviewed more than one hundred empirical papers in 2006. Although the studies had a wide range of results, they concluded that the “preponderance of the evidence” indicated that a higher minimum wage does increase unemployment.
  • The argument against increasing the minimum wage often relies on what I call “economism”—the misleading application of basic lessons from Economics 101 to real-world problems, creating the illusion of consensus and reducing a complex topic to a simple, open-and-shut case.
  • The profession as a whole is divided on the topic: When the University of Chicago Booth School of Business asked a panel of prominent economists in 2013 whether increasing the minimum wage to $9 would “make it noticeably harder for low-skilled workers to find employment,” the responses were split down the middle.
  • The idea that a higher minimum wage might not increase unemployment runs directly counter to the lessons of Economics 101
  • there are several reasons why the real world does not behave so predictably.
  • In short, whether the minimum wage should be increased (or eliminated) is a complicated question. The economic research is difficult to parse, and arguments often turn on sophisticated econometric details. Any change in the minimum wage would have different effects on different groups of peop
  • At the other extreme, very large employers may have enough market power that the usual supply-and-demand model doesn’t apply to them. They can reduce the wage level by hiring fewer workers
  • In the above examples, a higher minimum wage will raise labor costs. But many companies can recoup cost increases in the form of higher prices; because most of their customers are not poor, the net effect is to transfer money from higher-income to lower-income families.
  • In addition, companies that pay more often benefit from higher employee productivity, offsetting the growth in labor costs.
  • why higher wages boost productivity: They motivate people to work harder, they attract higher-skilled workers, and they reduce employee turnover, lowering hiring and training costs, among other things
  • If fewer people quit their jobs, that also reduces the number of people who are out of work at any one time because they’re looking for something better. A higher minimum wage motivates more people to enter the labor force, raising both employment and output
  • Finally, higher pay increases workers’ buying power. Because poor people spend a relatively large proportion of their income, a higher minimum wage can boost overall economic activity and stimulate economic growth
  • Even if a higher minimum wage does cause some people to lose their jobs, that cost has to be balanced against the benefit of greater earnings for other low-income workers.
  • Although the standard model predicts that employers will replace workers with machines if wages increase, additional labor-saving technologies are not available to every company at a reasonable cost
  • Nevertheless, when the topic reaches the national stage, it is economism’s facile punch line that gets delivered, along with its all-purpose dismissal: people who want a higher minimum wage just don’t understand economics (although, by that standard, several Nobel Prize winners don’t understand economics
  • This conviction that the minimum wage hurts the poor is an example of economism in action
  • one particular result of one particular model is presented as an unassailable economic theorem.
  • A recent study by researchers at the Cornell School of Hotel Administration, however, found that higher minimum wages have not affected either the number of restaurants or the number of people that they employ, contrary to the industry’s dire predictions, while they have modestly increased workers’ pay.
  • The fact that this is the debate already demonstrates the historical influence of economism
  • Low- and middle-income workers’ reduced bargaining power is a major reason why their wages have not kept pace with the overall growth of the economy. According to an analysis by the sociologists Bruce Western and Jake Rosenfeld, one-fifth to one-third of the increase in inequality between 1973 and 2007 results from the decline of unions.
  • With unions only a distant memory for many people, federal minimum-wage legislation has become the best hope for propping up wages for low-income workers. And again, the worldview of economism comes to the aid of employers by abstracting away from the reality of low-wage work to a pristine world ruled by the “law” of supply and demand.
Javier E

What Happened to Amazon's Bookstore? - The New York Times - 0 views

www.nytimes.com/...amazon-bookstore.html

amazon book publishing market history policy monopoly

shared by Javier E on 06 Dec 21 - No Cached
  • “Should we care as a society that a single firm controls half of our most precious cultural commodity and its automation isn’t working right?” asked Christopher Sagers, the author of “Antitrust: Examples & Explanations.”
  • “People think Amazon’s algorithms are better than they actually are,” Mr. Sagers explained.
  • Amazon declined to say what percentage of its book sales are done through third parties. (For the entire marketplace it is over half.)
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  • “In some ways Amazon doesn’t really want to be a retailer,” said Juozas Kaziukenas of Marketplace Pulse, an e-commerce consultant. “It doesn’t want to do curation or offer human interaction,” two of the essential qualities of retail for centuries.
  • Offering tens of millions of items to hundreds of millions of customers prevents any human touch — but opens up a lot of space for advertising, and for confusion and duplicity.
  • It’s the paradox of plenty: The more things there are to buy, the more difficult it is to find the right thing among the plethora of ads and competition, new material and secondhand, quality and garbage.
  • “Amazon knows what I buy, how often I buy, what I search for,” Mr. Kaziukenas said. “But decades after it launched, it can’t answer a simple question — what would Juozas like to buy? Instead it shows me thousands of deals, with some basic filters like category and price, and hopes I will find what I like. Amazon is so much work.”
  • Once upon a time, when the dot-coms roamed the earth, the Amazon bookstore was a simple place. It had knowledgeable human editors, bountiful discounts and delivery that was speedy for the era. For the book-obsessed, it offered every publisher’s backlist, obscure but irresistible titles that had previously been difficult to discover and acquire.
  • Amazon “doesn’t care if this third-party stuff is a chaotic free-for-all,” she added. “In fact, it’s better for Amazon if legitimate businesses don’t stand a chance. In the same way Amazon wants to turn all work into gig jobs, it wants to turn running a business into a gig job. That way it can walk off with all the spoils.”
  • Third-party sellers were an Amazon innovation in the late 1990s. Before that, stores either entirely controlled the shopping experience or, if they had a lot of sellers under one roof, were called flea markets and were not quite reputable.
  • Amazon in theory offered the brisk competition of the latter while exercising the oversight of the former. Bringing in third-party sellers was also a way for Amazon to champion how it was helping small businesses, which helped defuse controversies about its size and behavior.
  • A new report from the Institute for Local Self-Reliance, a research and advocacy group often critical of Amazon, details the most direct benefit of third-party sellers to the retailer: profits. A third-party seller pays Amazon $34 out of every $100 in sales, the nonprofit institute calculates, up from $19 in 2014.
  • The money comes from fees, ads and premium logistics that make the merchandise more visible to potential buyers. Amazon called the report “intentionally misleading” because the site does not force sellers to advertise or use its logistics system.
  • The combination of all those things in one place was a sensation. Amazon quickly took market share from independent stores and chains.
  • “Best sellers and other books that you might find at a local bookstore are almost all sold by Amazon itself at prices that keep those competitors at bay,” Ms. Mitchell said. “Then Amazon lets third-party sellers do the rest of the books, taking a huge cut of their sales.”
  • Bookselling at Amazon is a two-tier system, said Stacy Mitchell, a co-director of the institute and the author of the report, “Amazon’s Toll Road: How the Tech Giant Funds Its Monopoly Empire by Exploiting Small Businesses.”
  • Extraordinary prices for ordinary books have been an Amazon mystery for years, but the backdating of titles to gain a commercial edge appears to be a new phenomenon. A listing with a fake date gets a different Amazon page from a listing with the correct date. In essence, those Boland books were in another virtual aisle of the bookstore. That could power sales.
  • Mark Lemley, the director of the Stanford Program in Law, Science and Technology, said the company was probably right. “I don’t think Amazon will be liable for misstatements posted by others, and certainly not if it wasn’t aware of them,” he said.
  • In 2019, Mr. Bezos celebrated the fact that Amazon’s two million independent sellers were doing so well. “To put it bluntly: Third-party sellers are kicking our first party butt,” he wrote. They were pulling in $90,000 a year on average, the company said.
  • The U.S. attorney’s office in the Western District of Michigan recently announced arrests in a case involving Amazon’s textbook rental program. Geoffrey Mark Hays Talsma was charged with selling his rentals of “Using Econometrics: A Practical Guide,” “Chemistry: Atoms First” and other volumes instead of returning them.
  • At Amazon, the customer is king. According to the indictment, Mr. Talsma profited by repeatedly saying he had received the wrong products. He said, for instance, he had mistakenly been shipped flammable products that could not be returned, like a bottle of Tiki Torch Fuel that was leaking. Amazon would then credit his account.
  • What’s remarkable is the scale, length and profitability of this alleged activity. Amazon allows customers to rent up to 15 textbooks at a time. With the help of three confederates, Mr. Talsma rented more than 14,000 textbooks from Amazon over five years, making $3.4 million, prosecutors say. His lawyer declined to comment.
  • It’s the same story over and over again, Mr. Boland said: “Amazon has done a great job of expanding the marketplace for books. It’s too bad they’ve decided not to police their own platform, because it’s leading to all sorts of trouble.”
  • Amazon has resisted requiring its sellers to share more information about themselves. It has opposed lawmakers’ efforts to demand more transparency, saying it would violate sellers’ privacy. Recently it signaled guarded approval of a weaker bill but noted that there were a few parts of it “that could be refined.”
  • “It doesn’t seem like anyone at Amazon is saying: ‘We’re junking the store up. We have to decide what’s best for the customer,’” said Ms. Friedman, the publishing consultant.
  • Small presses say it’s hard to get Amazon to acknowledge a mistake, because it’s hard to get hold of a human being who could fix it. Valancourt Books, a publisher in Richmond, Va., that has won acclaim for its reissues of horror and gay interest titles, frequently runs afoul of the site.
Javier E

Chartbook 328 An economics Nobel for Biden's neocon moment. On AJR's "Whig" philosophy ... - 0 views

adamtooze.substack.com/...artbook-328-an-economics-nobel

nobel biden policy culture history US politics neocon china

shared by Javier E on 19 Oct 24 - No Cached
  • Through their many papers and books including Why Nations Fail and Power and Progress, these economists have gone well beyond standard analysis of supply and demand, elevating the role of institutions, power, inclusivity, and exploitation in understanding cross-country differences in economic outcomes. Such an expansion of the scope of what’s fair game for economic analysis has had real world implications for our Administration’s policy agenda. The work of these newly-minted Nobelists has significantly informed CEA’s analysis, in areas such as inequality, worker bargaining power, race, gender, climate, and pathways to opportunity. We are thrilled to see such important, pathbreaking, historically-grounded, and timely work get the credit and acknowledgement it deserves.
  • I must admit that before reading the Boushey and Bernstein comments, I had not made the connection between the work of AJR and Bidenomics. On reflection, I think it is very illuminating.
  • a series of key aspects of their research agenda were clear: 1. institutions shape economic growth as much as economic growth shapes institutions. They are skeptical, therefore, of crude materialist or modernization theories, that see the influence running from technology and economics to institutions and do not allow for a reverse flow
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  • 2. They are interested in history and in geography, but do not accept either as fate. Political choices are decisive
  • 3. Political choices have ultimately to be explained by struggles within elites and between elites and the populations they govern.
  • They will go on, as the Nobel citation explains, to combine an account of historical opportunities, provided by crises, with a study of elite dynamics and struggles between the population and the ruling elite.
  • because they operate in the sphere of economics it is often also cast in terms of models that formalize political economy in mathematical terms. To be honest it is not obvious what is gained by those exercises in formalization. But they are de rigeur in the discipline.
  • Already in 2009 James Robinson was pleading for an empirical approach to industrial policy.
  • hose institutions are decided by politics. And the most propitious institutions for long-run economic growth driven by innovation, are institutions based on rights and freedom
  • This is Acemoglu writing in 2012:
  • Boushey cites Acemoglu’s work from the 2010s where he moved beyond the consensus amongst economists that focused on carbon pricing and carbon taxing to insist on the need to use policy to promote the development of clean energy technology, thus enabling more rapid switching to renewable energy.
  • The head of President Biden’s CEA, Jared Bernstein, studied music and social work. He has no degree in economics. Some of Kamala Harris’ top economic advisers — from Brian Deese to Mike Pyle to Deanne Millison — are all lawyers. And on issues from free trade to immigration to tax policy to rent and price controls, both the Trump and Harris campaigns are throwing bedrock economic ideas in the trash can and embracing heterodox, populist ideas that might get you laughed at in economics courses.
  • I discuss the role of industrial policy in development. I make five arguments. First, from a theoretical point of view there are good grounds for believing that industrial policy can play an important role in promoting development
  • Second, there certainly are examples where industrial policy has played this role
  • Third, for every such example there are others where industrial policy has been a failure and may even have impeded development.
  • Fourth, the difference between these second and third cases rests in the politics of policy. Industrial policy has been successful when those with political power who have implemented the policy have either themselves directly wished for industrialization to succeed, or been forced to act in this way by the incentives generated by political institutions
  • These arguments imply that we need to stop thinking of normative industry policy and instead begin to develop a satisfactory positive approach if we are ever to help poor countries to industrialize.
  • The general conclusion, however, is extremely familiar. Technology and capital accumulation are key to economic growth. They themselves are shaped by institutions.
  • It is hardly surprising, therefore, that leading economic advisors in the Biden administration see them as kindred spirits. After all, the prevailing tone around the White House in recent years has been described by Allison Schrager at Bloomberg as Yale Law School economics.
  • The figure for whom this quip was coined was Jake Sullivan, who has had a huge influence in setting the economic agenda of the administration
  • the point has wider application
  • Clearly, AJR’s work over the last quarter century fits well with the new tone and self-conception of economics in policy-making in Washington today. Though highly competent in technical terms, they are not debating the finer points of monetary economics or time series econometrics. They are interested in the interface between economics, politics, law and institutions.
  • they share a worldview. They are skeptical of free trade. They bash big business. They see the decline of manufacturing not as a natural evolution of the economy but as a policy catastrophe that needs fixing. They support industrial policy, or a more muscular role for the government in shaping industry with policies like tariffs and subsidies
  • The President personally is enamored of the democracy v. autocracy framing. The more technical side of policy-making wagers that Western models of innovation and research will out perform their Chinese counterparts
  • The rise of the Yale Law School of Economics seems to say more about the political winds of our times and the declining popularity of economists and their ideas than anything. Free-market policies — sometimes called “neoliberalism” — are unpopular on both sides of the political aisle right now.
  • All this also means, that folks that I once described as gatekeepers - blue-blooded economists like Larry Summers, for instance - have lost influence.
  • Not that AJR are outsiders. But their arguments are capacious enough to embrace a variety of disciplines, to address big question and yet also avoid being excessively technically prescriptive. Their writing is policy relevant without intruding on the discretion of the actual policymakers.
  • Though Boushey and Bernstein point to more technical essays, in the current moment, it is actually’s AJR’s macrohistorical narrative that is most in keeping with the mood in Washington.
  • If there is a red thread running through the Biden administration it is a return to a neoconservative framing of the relationship between the US and China
  • China owes the growth it has so far achieved to the reforms of the 1980s and 1990s. In AJR’s terms these were a move towards a rights-based inclusive order. The slow down in recent year is then attributed to the failure to continue that reform momentum.
  • The link between the two levels is the presumption that “free societies” produce more first-class patents and top-class STEM researchers. This is precisely what Acemoglu’s “rights revolution” promises.
  • The historical narrative developed by Acemoglu and Robinson in books like Why Nations Fail, is very much in tune with this kind of thinking. Encompassing inclusive institutions brought about by political revolutions replace extractive elitist institutions and thus set the incentives for investment and private accumulation.
  • AJR do not simply dismiss the Chinese growth experience. As Acemoglu acknowledges: China has posed a “bit of a challenge” to that argument, as Beijing has been “pouring investment” into the innovative fields of artificial intelligence and electric vehicles.
  • The CCP in short acts as a non-liberal but inclusive regime. Its anti-corruption drives confirm this ambition and the work necessary to maintain that claim.
  • AJR are too realistic simply to deny these facts. But their claim is that though such structures can work for a while, in due course, if growth is to continue, there must be a transition.
  • They think a lot about dividing up the economic pie, Schrager says, and less about growing it
  • “Our analysis,” says Acemoglu, “is that China is experiencing growth under extractive institutions — under the authoritarian grip of the Communist Party, which has been able to monopolize power and mobilize resources at a scale that has allowed for a burst of economic growth starting from a very low base,” but it’s not sustainable because it doesn’t foster the degree of “creative destruction” that is so vital for innovation and higher incomes.
  • As Acemoglu remarked: “… my perspective is generally that these authoritarian regimes, for a variety of reasons, are going to have a harder time in achieving long-term, sustainable innovation outcomes,” he said.
  • “I think the conclusion of their work tells us that institutions are the most critical [to a country’s economic development]. This also has big implications for China’s way forward,” said prominent Chinese economist Xiang Songzuo, who added that the scholars’ conclusions were applicable to the China model. “Only by moving towards further marketising our economy, emphasising on the protection of intellectual property, private companies, fair market competition and upholding the spirit of entrepreneurship, can our economy attain sustainable growth, and our people can have higher incomes.”
  • tinkering with 77-article proposals from the NDRC does not do justice to the historical vision of Acemoglu and Robinson.
  • AJR’s agenda was once tightly formulated and specified. In recent years it has become increasingly wide-ranging. Whereas their aim at first was to insist on the exogenous importance of political institutions in economic development, increasingly their thinking has circled around the development of political institutions themselves and the interaction between politics, culture and the economy
  • As Cam and I discuss on the podcast, some of their arguments about culture are, frankly, hair-raising. With regard to China the issue they take to be at stake is the influence of Confucianism on Chinese institutions and, specifically, the prospects for the “rights revolution” and thus for innovation and long-run growth.
  • On the whole, their approach is non-dogmatic. Confucianism, they insist, offers many possibilities for the development of political culture and institutions. But for Acemoglu and Robinson what this entails is greater militancy.
  • While Confucius did say that “commoners do not debate matters of government,” he also emphasized that “a state cannot stand if it has lost the confidence of the people.” Confucian thought recommends respect and obedience to leaders only if they are virtuous. It thus follows that if a leader is not virtuous, he or she can – and perhaps should – be replaced. This perfectly valid interpretation of Confucian values underpins Taiwanese democracy
  • By contrast, CPC propaganda holds that Confucian values are utterly incompatible with democracy, and that there is no viable alternative to one-party rule. This is patently false. Democracy is as feasible in China as it is in Taiwan. No matter how strident the CPC’s bluster becomes, it will not extinguish people’s desire to participate in politics, complain about injustices, or replace leaders who misb
  • After reading those words you realize that the kind words from the Council of Economic Advisors undersell the association between the Biden administration’s agenda and AJR view of history. What are at stake here are not only freedom and prosperity, but injustice and ultimately nothing less than human desire
  • Regime changed advocated in the name of philosophical anthropology. As Cam remarked on the show, it makes one miss Frances Fukuyama and Kojève. Instead, the interpretation of modern history offered to us by this year’s Nobel prize winners in economics is an unreconstructed 21st-century Whiggery, fully in keeping with today’s neoconservative turn in America’s policy. It is Nobel sendoff for the Biden era.
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