I’m on the record as being against preschool classroom Valentine’s Day parties. As Scrooge said, people are “spending the mortgage money on frivolities”. The parents sending in gifts is the pinnacle of the rotten heap. I would abolish daycare Valentine’s Day parties entirely – outlaw them like those super sized soda cups.
Now, with Covid subsiding and my son in elementary school, I’m getting to see school-aged-kid birthday parties (as I mentioned yesterday). The parties as events that build social capital are great. The gifting aspect of it is mostly dumb. I abhor waste. I put “no gifts” on the birthday invitation for my son.* Most guests brought a present anyway. Next year, should I write “if you bring a gift I will burn it in the driveway before you can enter”? These parents would say they are worried about the island of plastic trash in the Pacific, but what do their actions tell?
It would be nice if school birthday parties could adopt the white elephant/Yankee swap convention that keeps present volumes down at Christmas/holiday parties, but it’s impossible for logistical reasons. If it were socially acceptable to grab a lightly used board game out of your basement and wrap it up to give a school friend, that would also be better. Maybe I should write that on our invitation next year and report back to you all! What do the really really crunchy parents do?
Economists think it’s clever to say, “Haha. You thought Christmas presents were wholesome, but they are inefficient. Merry Deadweight Loss.” Personally, I like most Christmas/holiday presents for the signaling value. I’d be happy with Christmas presents if we could get plastic junk for kids under control and heavily curtail presents at other times of the year.
Related resources: 1) Alex and Tyler donned Christmas sweaters to bring you this video on Christmas gift giving 2) Zachary has written about Christmas gifts
*Do you like funny stories? My son can read. When he noticed that I had written “no gifts,” he got mad at me. I explained that people can still bring gifts if they want to. Then I was mortified when he came home from school reporting that he had told his classmates that they can still get him presents.
I am preparing to host my son’s first grade class at our house for a birthday party. Even leading up to today (Friday), it has been a lot of work. Now I’m in the home stretch and will not have time to write a real blog. I have no problem blogging while I’m “on vacation” (in quotes because I’m an academic and I never go a day without fielding emails), but this is another level.
Mental load on women – it’s real!
There is a sweet convention in elementary school here that the entire class gets invited to a birthday party. My son is not “the popular kid” in his class, but he still gets chances to enter into homes and social life through these occasional birthday parties. This is weird and speculative… but there are some adults who would benefit from somehow getting integrated into one of these birthday rings. (my previous post on loneliness)
Scott posted this on stablecoins last month. He had said, “…The potentially problematic aspect of this type of stablecoins is the change in value of the collateral and the reliance on supplementary instruments. …” …which is relevant because a major algorithmic stablecoin, TerraCoin, collapsed this week, leading to its de-listing by major crypto exchanges.
Courtesy of the St. Louis Fed, you can download a report published in 1958 titled “Automation and Employment Opportunities for Office-Workers: A Report on the Effect of Electronic Computers on Employment of Clerical Workers, with a Special Report on Programmers.”
I teach students about data and software to prepare them to enter the hot field of business analytics. It has been a growing field for a few years, especially since the advent of “Big Data”. Something I explain in class is how brand-new technology has changed business.
Reading this report forced me to re-think just how new data analytics is. The authors saw machines in use for data processing and correctly predicted that this would be a dynamic source of new jobs.
The introduction states that millions of “clerical workers” were employed in the United States. That fact would have been obvious at the time, but today we might not realize just how many humans would be needed to store and fetch the files we access regularly on our computers. The creation of clerical jobs was especially important for women.
In view of the volume of work that needed to be done, installing new computers was economical. “A computer system can automatically do such jobs as prepare payrolls for thousands of employees, control inventory on a multitude of items…”
“Although computers are often described as machines that can “think,” that is, of course, not so. Like other machines, they must be operated or controlled by people… The people who prepare the instructions are called programmers.”
“Electronic computers were developed during World War II as an aid in solving intricate scientific and engineering problems such as gunfire control, but their application to the processing of office data is more recent. The Federal Government lead the way in 1951, when an electronic computer was installed by the Bureau of the Census…”
The authors see the primary role of computers in business as a way to automate the routine work that could be performed by clerks. Secondly, they state that computers can by used for solving complex math problems “such as those related to launching and tracking earth satellites.”
The report was created for young people who are considering their own choices for education and careers. The authors describe the programming but also various machine support roles. For example, the Coding Clerk’s job is to convert the programmers’ instructions into “machine language”.
The authors recognize that computers will replace some of the traditional clerk roles. “These developments will not only increase the output of clerical workers and slow down growth in clerical employment, but will also change the character of many jobs… Many of the new jobs … will generally pay better and require higher levels of skill and training than most other clerical jobs.” The next sentence is where the authors fail to predict PCs and the internet: “Moreover, a continued increase is expected in the number of officeworkers in jobs not greatly affected by office automation – for example, secretary, stenographer, messenger, receptionist, and others involving contacts with customers and the public.”
The discussion of women in the workplace is clinical in tone. Turnover is high in the clerical fields because many young women stop working when they get married or have children.
There is a special report on “programmers”, one of the newest occupations in the country. Programmers specialize in either of the following: 1) “processing the great masses of data which have to be handled in large business and government offices” 2) “solving scientific and engineering problems”.
The authors describe typical training and career paths. At the time, a college student could not major in computer science. Companies were filling most positions by selecting employees familiar with the subject matter and giving them training in programming. A few colleges purchased computers and provided some training opportunities.
The culture was different back then. “Although many employers recognize the ability of women to do programming, they are reluctant to pay for their training in view of the large proportion of women who stop working…” The authors tip off their female readers that they are more likely to get training in government than industry, if they aspire to be programmers in the 1950’s. Today, the risk and cost of training has largely shifted from the employer to the worker. If you are interested in the topic of bootcamps and STEM pipelines, read the document for their discussion of education.
These authors made a good long-term prediction because they anticipated the business analytics boom. “Continued expansion in employment of programmers is expected over the long run… In offices where the volume of recordkeeping is great, there will continue to be need to reduce the cost of processing tremendous amounts of data and to produce more timely reports on which management decision can be based.” After explaining salary, they talk about perks: “Programmers usually work in well lighted, air-conditioned, modern offices. Employers make special efforts to provide better than average surroundings for programmers, so that they may concentrate to achieve the extreme accuracy necessary for programming.” The nap pods of Silicon Valley have a long history that can be traced back to the Census Bureau.
Anyone can comment on this blog. We’d love to see more comments. Challenging our ideas is fine. Telling us that you like our work is encouraging.
If you are in the know, then you assume we have a comment moderation policy, because everyone needs one. If you have never run a website then you might think it is possible to simply have an open form that anyone could type into and get immediately published on the platform.
Comments come in every day, but most of them never get posted. We are not against free speech or silencing an opposition. Most of the comments, if you can even call them comments, are spam. Sometimes spammers try to get posted by saying that they love the site, and sometimes the text seems like AI-generated pornography. The words are not written by humans or at least not humans who have actually read our content.
I don’t think it’s smart to be 100% transparent about our “algorithm” for filtering out this spam. That would make it easier to for bad actors to accomplish what they want to accomplish.
To our human readers, please comment. Your comment will get posted, although sometimes it might take a minute or even hours to get through. We are not censoring ideas, yet we need a moderation policy or else this place would not be fun. People would not want to wade through spam.
Elon Musk buying Twitter is the big news this week. He wants to enhance free speech on the site and, according to him, make it more open and fun. Some fans are hoping that he will make the content moderation and ban policy more transparent. Maybe that’s possible. Maybe he can improve the site.
My point is that if you have not been on the admin side of an internet forum then you might not realize the challenge it presents. There are trade offs involved. I believe that there can be improvements to the current system at Twitter. However, if you want to be taken seriously be tech folk then ask for a system that is possible. A substantially better experience might be incompatible with the site being free to users.
In our case, we could improve our system at EWED. Real people who comment will not like the lag, and fixing that is a technical problem. More time and money could solve it, but this site makes no money.
The economics insight is that you get what you pay for. Studio executives make the movies they believe you will pay for. We get the politicians we bother to vote for. Journalists report what they get paid to write.
Twitter could create a paid user tier. Paid users would be entitled to speak to a human on staff at Twitter in the event that they get censored and have the option of an appeals process.
I am used to getting a lot of services for free online. New companies roll out a huge free initial offering to harvest users and data. I have spent most of my adult life in that roll out phase. Eventually the party stops and investors want to see a revenue stream. Maybe I should start paying for the internet services I value. Maybe part of the reason the conversation is so rancorous is that we are transitioning away from everything being free. Inventing social media is sort of like humans discovering fire and cocaine at the same time! We are still figuring out how to use these tools effectively and safely.
I think a bad scenario happens if we cannot transition over to a patronage model. Remaining trapped in a free stuff mentality would be worse in the long run. I hope Napster didn’t ruin me. In an ideal world, I would be willing to pay for social media and also never spend more than 2 hours a day scrolling on any open platform. We should try for that. We should supplement our online reading with content that has made it past a publisher. For now, one way to get around Twitter censorship is to buy and read books.
On the Bretton Goods podcast, host Pradyumna Prasad asked student Trevor Chow about blogs. To start the segment, Prasad noted that there has been an increase in what he called “econ blogs” in the past 2-3 years. Will that trend continue? Prasad believes that this is not sustainable because: 1) he thinks the paid subscriber model will not support many writers, which leads to 2) bloggers writing for free will run out of time and energy.
Chow replied that he thinks the recent explosion is partly due to Substack, which makes it easy to start blogging. Chow described the current climate as a “flourishing blogosphere.” He assumes that some people started during a Covid shutdown when the opportunity cost was low. Some of the younger people might shift their focus, as he did when his interests changed, but he believes that many of the blogs started in this phase are here to stay. Both young men think about longevity.
Prasad asked, “What are the qualities of the most successful bloggers across time?”
Chow replied that the only blog that has influenced him “across time” is Marginal Revolution, partly because few writers stick with blogging. Chow thinks a successful blogger over time would find a special niche. I have a similar intuition, even though MR is not about a niche topic. If everyone is checking MR for their “daily links”, then it’s unlikely that inferior new aggregator blogs will attract large numbers of readers. Also, Twitter largely fills that role now.
The fact that duration was discussed more than quality is interesting. To blog is to enter a network and join a community. Part of sticking around for a while is not just writing but also reading and paying attention to the work of others. Good writing is a necessary but not sufficient component of what would be considered a successful blog.
As an economist, I was happy to hear Prasad open this segment by talking about “econ blogs”. Econ blogging occurs when people are interesting online, even if the topic is outside of the traditional domain of economists. I think this is partly due to Tyler Cowen both being prolific and also willing to engage non-standard thinkers.
I enjoyed the podcast. It raised some questions which I posed to Tyler Cowen, the OG econ blogger. We all know that MR generates a high level of engagement, today. My first question was:
1. What was the evolution of reader engagement with MR? How long did you work before a lot of people were reading, commenting?
Cowen: It took us 3-4 years to have a lot of readers. but I never tracked the numbers very closely. When I started, I was thrilled by the notion of 5,000 readers a day — of course we have done many times more than that.
2. The consensus is that many new people have started since 2020, which I believe is something that you called for. Do you now see the space as, in some sense, saturated, or would you encourage more people to keep joining now?
Cowen: I don’t think it is saturated now.
3. For bloggers who started since 2020, should they quit if the opportunity cost increases?
Cowen: The main thing is simply whether you enjoy it and learn from it! If so, reason to continue. That sounds trivial, but it is really the bottom line.
Should the new bloggers keep going? Yes, if you enjoy it and learn from it. Is it too late to start? No, if you will enjoy blogging and learn from it.
The blog form is better than a 280-character tweet for capturing nuance. Something I learn from blogging, which might not be obvious from the outside, is that I have some bad ideas. Sometimes trying to write out a piece teaches me that I had an unsupported thought. It would be good if more people would stop scrolling for an hour a week and try to write out an argument.
Co-blogger Mike alerted me to this comic:
This summary by @ZachWeiner of "The University" as an institution is so darkly and romantically pitch perfect I stopped breathing for a few seconds. https://t.co/QbSAv2lTV3
The comic first describes a cynical take on academia, with which I don’t fully agree. Then, the woman paints a picture of an alternative haven for intellectual conversation. Can econ blogs be an old pub where the people are always and only there in earnest? “Most people don’t even want to go in, and you certainly don’t get credentials for descending the stairs.”
As someone who has dabbled in lab experiments for over a decade, I’m familiar with complaints about external validity. If an experiment is run with only college students, then how can we know if the finding will generalize to other populations? It’s a question worth asking, but many questions are worth asking and it doesn’t mean that controlled experimentation can’t add value to the economics literature. In the age of general suspicion of small studies, people say that replications are needed. We should only trust a conclusion that is supported by multiple studies. The thing about replications is that the process has to start somewhere. Empirical work has to get read and published. Replications are composed of individual studies.
I just met John List at the Alabama stop on his epic national book tour. He directed me to his work of art: Ungated Link. He wrote a play in response to the attacks on his work concerning external validity. He employs a rhetorical strategy of making your critics look obtuse. Even though the play is absolutely silly (thoroughly entertaining), he builds a strong defense for doing experiments. It is literally presented as the arguments of a defense lawyer. Before the trial begins, a “reporter” summarizes the conflict that has created the need for a formal trial:
Court Reporter Clifton Hillegass: Thank you Judge Learner. While it is never easy to convey succinctly the key points of a debate, this dispute has crystallized in a manner that leaves no middle ground. The prosecution, led by Mr. Naiv Ete, argues that all empirical work in economics must pass a set of necessary external validity conditions before being published in academic journals or used by policymakers. To date, in this courtroom no empirical work has passed his conditions, effectively rendering the question of generalizability beyond dispute, or as Livius Andronicus reminded us, Non est Disputandum de Generalizability. Ms. Minerva, Lead Defense, has argued that this line of reasoning leaves only theoretical exercises and thought experiments to advance science and guide policymaking, an approach that she fears will return us to the dark ages.
The paper is called “NON EST DISPUTANDUM DE GENERALIZABILITY?” It’s a good refresher on the history of science, not just economics.
Maybe the first best is for you to spend your weekend reading dense technical papers. But if you aren’t feeling up to that, then this play will make you feel like you learned something without even trying.
I’ll link this up to some of the posts I wrote last year about experiments and critics:
By one definition of the word, Las Vegas is the textbook example of decadence. Is the physical structure of The Strip evidence of American decline? Ross Douthat specifically mentions Disneyland and Las Vegas together in his book, The Decadent Society. He calls them “consumer sublime” which, along with the iPhone, creates a fake experience rather than building something real (like Space Travel).
In his CWT, Douthat expounds on Vegas explaining that, “it represents a kind of simulated sublimity where you are creating models of all of the great achievements of the human species in the modern world and practicing various forms of entertainment around them. So in that sense, it is under my definition too, not just the chocolates-and-bondage-dens definition. I think it is decadent.”
I wrote about Disney World last month and I happened to have just been to Vegas. These places are nice, especially in Spring when it is sunny but not yet too hot.
The New York-New York resort was built in Las Vegas in 1997, followed by the opulent Bellagio in 1998. Paris and the Venetian, both nods to Old World centers of art and culture, were finished in 1999. This construction explosion was all happening during my childhood, and now it is established in modern culture by films such as Ocean’s 11 and The Hangover.
One thing Vegas has all to itself is its sign.
It also boasts to be a place where you are encouraged to overdose on drugs, alcohol, sex, and gambling. That’s not great, but it’s not what Douthat means by decadent. What I noticed is that it’s a loosely regulated place where they will sell you anything that gets you to take out your credit card. There are marijuana stores right across the street from Gucci stores. You pass slot machines on the way out of fancy restaurants.
Tattoo shop next to weed shop, directly across the street from upscale fashion boutiques. l’Arc de Triomphe brought to you by Martha Stewart
The entertainment-by-spending-money enterprise (Walt Disney World was expensive, too) all takes place in a cool physical setting. The pedestrian bridges on the main streets make it fun and practical to walk around, right past all the stores. The Strip is bordered by shiny tall hotels that each have a theme. The centerpiece, in my opinion, is the Paris resort.
How do you signal that civilization is here, when you are in the middle of Nevada-Mars? Meme the heart of European culture. Considering how yucky activity can get on the Strip, that nod to Europe provides a veneer of respectability to lure in rich people with families. I don’t only think of it in that cynical way. Plenty of Las Vegas is unique and new, but humans can only handle so much new at once. The Eiffel Tower is code. It’s a form of language that people understand. It makes us feel safe and perhaps even makes us safe by setting a tone for the style of partying.
Tourists are in a new place surrounded by strangers. Are we going to attack each other? Are Russian soldiers about to come through and massacre us? Do we agree about what is admirable? Everything feels like it is going to be fine, because we are here in civilization. If Americans ever do settle Mars, we’ll build an Eiffel Tower there, too.
This might all seem trivial, except that I have heard multiple people saying something about how Putin thought he could attack Ukraine at this moment because “he thinks the West is decadent.” That makes investigating the issue seem worthwhile.
As I concluded about Disney World, the problem is not that we have a few nice areas to practice escapism. A progressive society would build more of these places with access for more people. Let’s build a bigger Eiffel Tower in the desert that more people can fit under. If the French object, then make it a fake Empire State building. Big Ben, anyone?
The non-superficial problems Douthat mentions are serious. Our declining birth rate has plunged further since he published his book. Our political system seems just as sclerotic (Vegas is the place where developers got a “yes” while every other American city was saying “no”). As I said in my previous post, everyone should read his book and ponder.
To leave Las Vegas, I took an Uber for a morning flight. My driver came from Afghanistan three years ago. I told him I was glad he made it out before the Taliban took over and he said that it is bad there right now. He had to learn English in 6 months out of dire necessity so that he could get better jobs. Now he dreams, like so many Americans, of “getting out of this town”. What does he think of Las Vegas? His complaints are that it is too sunny and boring.
The destinations of his dreams are San Francisco or New York City. I informed him of the places I know that have less sunny days. I wish we could have talked more, but from what I can tell he has embarked on his American Dream. He was located with his parents (and perhaps more family members) in Las Vegas directly from Afghanistan. He’s young and dreams of leaving. However, he said his parents like where they are and want to stay put now that they have found a secure home. That puts the city in a new perspective. It may not be the aesthetic that Ross prefers, but families have found a home where there used to be uninhabited wilderness.
This is from The Price of Peace by Zachary Carter. What strikes me is the fact that a fleeing refugee doctor enabled Keynes to join the fight, again at the age of 58.
The following passage starts on page 316: “In the meantime, Keynes was at last in good health again. He owed his new energy in part to Hitler’s aggression. In 1939, Keynes had hired János Plesch, a Hungarian Jewish doctor who had relocated to London after fleeing Nazi persecution.
[Plesch resolved Keynes persistent throat infections by administering one of the earliest antibiotics (that was developed in German labs by Bayer before the war!).]
“After two decades of depression, however, the British economy was entering the fight of its life in ragged condition. … On the eve of war, worker productivity was 125 percent higher in the United States than it was in Britain.
“In the meantime, Germany had shifted its offensive focus to London. The Blitz…
“British diplomats didn’t have time to waste. After trying everything else, they brought in Keynes.”
“So Keynes went to Washington in May 1941 to negotiate more practical terms of cooperation and promptly infuriated nearly everyone he met.”
My thoughts: Money wins wars. Wars redistribute talent. Talent makes money. Is the cycle still going? Is this a post-industrialization phenomenon only? Will Tyler’s upcoming book on talent shed any light on this topic?
Podcast with Anne Applebaum on dictators (May overlap considerably with your Twitter stream of info, but at least you could walk while learning and take a scrolling break.)
The destruction of value is graphic and tragic, caused by Russia invading Ukraine this month. Of course violence is common, around the world and throughout history. Violence and repression lead to poverty. Only in rare circumstances have autocracy and despotism been escaped, so that commerce can flourish and wealth can be shared.
Last week I blogged about my nice experience at Disney World. I was happy to see them telling the story of technological growth at The Carousel of Progress ride. At Disney, people really commit to their stories. Adults don’t wear mouse ears or Jedi robes ironically, in the park. The Carousel of Progress message is 100% optimistic about our future, without any cynicism or hedging. There is no mention of government institutions or which legal arrangements will allow progress to continue.
Here is some political economy that is missing from the ride. I quote, without indenting, from the late P.J. O’Rourke’s book On the Wealth of Nations. O’Rourke explains, sometimes using Adam Smith’s words, how in rare circumstances humans managed to rise out of poverty and subjugation.
Beginning of Chapter 7: The first two books of The Wealth of Nations are Adam Smith’s creed of economic progress. Smith placed his faith… in the logic of common sense. We are required to care for ourselves. We act upon this requirement. Our actions are demonstrably beneficial to others. The economy progresses, QED. Or it would, Smith wrote, “if human institutions had never thwarted those natural inclinations.”
More from Chapter 7, on pre-Medieval history of Europe: Smith wrote that the “rapine and violence which the barbarians exercised” left Western Europe “sunk into the lowest state of poverty.” Commerce was destroyed, towns were deserted, fields were left uncultivated. But although the rule of law and the legal title to property that goes with it were destroyed, the result was not “Imagine no possessions/ I wonder if you can.”
End of Chapter 7, an explanation of how economic progress started in the Westwhen the merchants gained some freedom: Adam Smith argued that the inclination of the feudal overlords to be selfish was so strong that it overwhelmed their instinct for self-preservation:
All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind. As soon, therefore, as they could find a method of consuming the whole value of their rents themselves, they had no disposition to share them with other persons. For a pair of diamond buckles… they exchanged… the price of the maintenance of a thousand men for a year, and with it the weight and authority which it could give them. The buckles, however, were to be all their own… whereas in the more ancient method of experience they must have shared with at least a thousand people… and thus, for the gratification of… vanities, they gradually bartered their whole power and authority.
Never complain that the people in power are stupid. It is their best trait.
Joy writing again: “Stupid” refers to the fact that the European lords could have maintained their own power if they had been willing to keep themselves and everyone else poor through continued violence. Consider who is currently being being crazy versus “stupid,” in Europe and elsewhere.
In Disney World’s Magic Kingdom, you can get off the Carousel of Progress and walk across the park, past the Main Street shops, to a dark scary ride called The Pirates of the Caribbean. Someone could teach a travel course where students do both rides and then discuss wealth creation. It would pair nicely with a Doug North reading. Then, everyone could ride “It’s Small World” ironically.
Last week I went to Disney World for the first time. The decorations live up to the hype. The whole enterprise down to the efficient parking systems was impressive.
Galaxy’s Edge is a new Star Wars themed area in Hollywood Studios
In his book The Decadent Society, Ross Douthat argues that following the Apollo mission, Americans underwent a period of economic stagnation, demographic decline, and intellectual and cultural repetition. I think he makes good points, and every American should grapple with his proposition.
He specifically mentions Disneyland on page 36-37:
But has anything that fits this description happened since the moon mission? … There has been a growth in what [David] Nye calls “the consumer’s sublime” of Disneyland and Las Vegas. … But the hyperloop is a blueprint, Las Vegas is a simulacrum…
Has Douthat been to Orlando recently? Walt Disney was not complacent, and neither are the Disney employees who continue to carry out his vision. Orlando is a place where Americans have built stuff in the past few decades instead of trying to veto all progress.
Perhaps it is a decadent society that overvalues the Disney World pilgrimage. My parents never took me, so I am proof that you can have a good childhood without it. However, to build this zone and enjoy it seems like a perfectly legitimate peacetime activity for a country. People desire to stroll down a safe, beautiful, clean, walkable street with their families. The problem is that so many Americans can only do that for a few days per decade and empty their savings to Disney for the privilege.
There is a pernicious idea that respectable Americans live in towns that look just like 1950 and they do tourism at sites that look like 1850. Walt Disney obviously did not think that way. On Twitter, @EliDourado and @mnolangray are agitating every day to build more better stuff. We don’t need Donald Duck on every corner, but we could create cities that serve families better.
One surprise I found inside of the Tomorrowland zone of Magic Kingdom is an old ride called The Carousel of Progress.
Economist Writing Every Day 