Today is the last Sunday of 2020. The disruption to employment and rise of remote work might be the bigger story of 2020. However, for a significant fraction of Americans, 2020 is also the year their ability to meet as an in-person church was curtailed. Gathering in a room with many people singing is an efficient means of spreading the virus. For some, church has been an online-only experience since March.
Social scientists are interested in religiosity. Christian devotion has often been measured by asking how many times a person goes to church.
My colleagues who study the economics of religion will have an important issue to study. How does the switch to online church in 2020 affect Christian engagement in the future? How will this affect our ability to track long-term trends on religiosity?
If it is true that large gatherings are safe in a year from now, it will be interesting to compare in-person church attendance in 2022 to 2019. If it turns out that attendance has decreased, then we would need to see a break in the trend to conclude that Covid is the cause. Here’s a graph of church attendance in an article from B.C. (Before Covid).
A book that was published in the 1950s made it sound like, even then, people who attended church weekly were in the minority. Joy Davidman published Smoke on the Mountain in 1953.
The inspiration for this post was reading this line about “remote” church experiences:
Others, instead of stirring their stumps, listen in comfortable living rooms to a sermon on the radio, arguing that it is “just the same.” They have forgotten that one of the first necessities of a Christian life is a congregation…
Overall, Davidman is disappointed in how few of her American countrymen attend church. Early in life, she was a militant atheist. She’s a Christian at the time of writing, but still somewhat militant.
Davidman frowns on radio church, when in-person church was available. However, virtual church today is closer to the traditional visual church experience. Going forward, it will be important to consider whether people who use the internet for church experiences should get counted.
Here are some examples of what churches have been up to, virtually:
Larger churches have been podcasting and Youtube-ing for years. One of the top productions is Bethel Church of Redding, CA. They even already had their own Bethel.tv ecosystem, so shutting down in-person services for Covid probably coincided with an increase in viewership for them.
What to do on the Monday before Christmas? My 5-y-o son was beginning a long winter break from school. Thanks to Covid, we were home all day. I wanted my son to do a few chores and some learning.
There were some fun activities I knew we would end up doing that day, such as playing chess and letting him watch some TV. One option would have been for me to order him around all day. If he balked at cleaning up his room, I could threaten to withhold TV. Instead, I made a jar of activities written on slips of paper.
He picked papers out one at a time. The only rule I imposed was that he would do that activity immediately. If he drew tidying his room, then we went straight to his room. Mixing in papers that read “30 minutes of TV” and “pick a snack to share” made the game seem fun. He would have ended up watching TV anyway. I included a paper in the bowl that said, “give Mommy a compliment.” Everyone needs some affirmation!
This tactic was so successful that it got me thinking about how adults, including myself, could benefit from something similar. Adults need structure. I contemplated whether I would want someone to put all my activities for the day in a jar. Something I have done and even paid for is to go to a gym and have a fitness instructor tell me what to do for an hour.
One reason the jar game worked is that my son could not do all the fun activities first before the more unpleasant tasks (i.e. math worksheet). Almost every successful writer says that they write first thing in the morning. They don’t procrastinate.
If you’d like to hear from a real live human who actually does the writing scheduling thing, you can listen to Jennifer Doleac’s recent interview on The Hidden Curriculum podcast. She really does the thing! No wonder she’s so amazing and professionally successful. (She’s also generous with her time and supportive of young scholars.)
I think many of us could think of an excuse for not scheduling every hour of our work days a week ahead of time, as she does. I feel like I have excuses, but I also bet I could get closer. A great book on productivity is Deep Work. Something I took away from that book is that, even if you can’t go full Doleac, every person can do better.
The author, Cal Newport, points out something we all know by now: constantly checking email and social media eats up your day and reduces productivity. After arguing that it’s optimal to block out hours for exclusive intense focus, Newport deals with the objection that some people need to be accessible to others throughout the day. A manager or teacher needs to read and respond to emails promptly. Newport’s response was something like “Ok. However, you can probably check your email LESS frequently than you currently do.”
The New Year is coming. Let’s try again. Let’s try harder. I want to waste LESS time than I currently do. And I’ll so some more of the surprise jar game with my son.
Along with the colorful phrase “pork barrel” spending, logrolling is a term used to describe the process of vote trading in elected legislative bodies. The process has long been maligned by political scientists, pundits, and the general public. It’s also come up in the debate about the proposed Budget/COVID Relief Bill.
President Grant tried to stop logrolling. He failed.
What’s bad about logrolling? I think there are two general lines of argument. First, it just seems immoral. Citizens can’t legally trade their votes, and many see any attempt to do so as wrong. You get one vote, and one vote only. For someone to have more votes than others rubs our intuitions the wrong way, similar to the ability for wealthy individuals or corporations to essentially have more votes by influencing politicians through campaign contributions.
More pragmatically, logrolling gets a bad name because it could lead to wasteful spending, particularly the “pork barrel” type that Americans really hate (unless it is coming to their district, of course). If you vote for my bill, I will vote for yours, even though I might not care about your bill. Maybe even I think your bill is kinda bad, but I think my bill is really good, so I am willing to hold my nose and vote for your bill, if it gets me what I want.
Buchanan and Tullock (1962) turned this logic on its head. Logrolling is efficient because it allows members to express their preferences, specifically the intensity of their preferences. Moreover, it allows legislative bodies to get things done that are beneficial for society, even if none of those things would pass in a simple referendum.
Money can be simplistically defined as “A medium that can be exchanged for goods and services and is used as a measure of their values on the market, and/or a liquifiable asset which can readily be converted to the medium of exchange”. Earlier we described the amounts of various classes of “money” in the U.S. Here is a chart showing the amount of currency in circulation (coins and bills; lowest line on the chart) for 2005-2020, and also M1 (green), M2 (upper curve, purple) and “monetary base” (currency plus reserves at the Fed; red line).
To recap what M1 and M2 are:
M1: Physical currency circulating outside of the Fed and private banking system, plus the amount of demand deposits, travelers’ checks and other checkable deposits. This is highly “liquid” money, i.e. accepted and used for transactions in the private economy.
M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).
The funds in these additional savings and money market accounts can in general be easily transferred to checkable accounts, and thus could go towards making purchases if desired.
Physical currency is made and put into circulation by the government or quasi-governmental agencies (the Treasury mints coins, and the Federal Reserve prints bills). But what about all the other money (M1, M2, etc.), which dwarfs the physical currency? How does it grow?
Without getting into all the weeds, it turns out that the major driver of money creation in modern economies is the process of bank loans. The vast majority of money in countries like the U.S. is not created directly by government or central bank operations, but is created in the private sector when commercial banks make loans. When individuals or companies decide to take out more loans (including loans for cars, houses, or business investment), the effective money supply in the nation increases. This is true for other modern economies. For instance, the Bank of England states:
There are three types of money in the UK economy:
3% Notes and coins
18% Reserves
79% Bank deposits
A typical scenario of how bank lending increases money might go something like this: Fred would like to add an enclosed back porch to his house, but doesn’t have the money in hand to pay a carpenter to build it for him. So the base case is no payment to the carpenter and no porch for Fred. However, Fred realizes he can go the bank and get a loan to pay for the porch. So he obtains a $20,000 loan from the bank, which first shows up as a $20,000 credit to Fred’s checking account. The bank credits Fred’s account, and in exchange obtains a contract from Fred promising that Fred will pay it back, with interest.
Fred writes a check for $20,000 to the carpenter, who in turn pays $10,000 to a lumberyard for materials and keeps the other $10,000 as his fee. The lumberyard is able to pay its workers for that day, and order replacement lumber from a mill. The workers spent their pay on various items. The carpenter puts $5000 of his $10,000 fee in a savings account, and pays the rest to a car dealer for a used car.
The initial loan to Fred set off a chain of spending and economic activity, which would not have otherwise occurred. Fred has his porch, the lumberyard workers continue to be employed and supporting their local merchants, the carpenter gets a second car, and this money keeps ricocheting around until it gets drained away into stagnant savings, or is used to pay down prior debt. Although they are not aware of it, part of the lumberyard workers’ pay for that day came out of the debt incurred by Fred.
The granting of that loan created $20,000 of spending capability, i.e. money. As far as the economy is concerned, that $20,000 did not exist as effective money prior to the loan. Thus, the money came into existence simultaneously with the debt associated with the loan. Fred received the capacity to spend $20,000 today, but in turn accepted the obligation to pay back this money, with interest. It is assumed that Fred had a stable income, such that he would in fact be able to pay back the loan in the future.
In general, increasing debt increases the money supply, and paying down debt extinguishes money. For simplicity, suppose Fred repays the $20,000 loan (with $2000 interest added) in one big lump, two years later. In that year, he will presumably spend into the economy something like $22,000 less than he would have otherwise. Thus, his paying down of his debt will act as a decrease in the circulating money.
In normal times, as one person is paying down his loan (and thereby shrinking the money supply), someone else is taking out a new and even larger loan, so total debt and the amount of money in circulation stays about the same, or grows somewhat. A feature of the 2008-2009 recession, however, was a big drop in consumer demand for credit; folks decided to pay down debts and not borrow so much money to buy stuff. The effect was a big drop in spending and thus in overall economic activity (GDP) and in employment.
Where was that $20,000 before Fred borrowed it? We might think that it was sitting unused in the bank vaults, just waiting to be borrowed. That turns out to be an incorrect picture of the lending process.
Bank loans differ in key ways from, say, an interpersonal loan. If I lend you money, I might draw down my checking deposit and give you a check which you would deposit in your bank account. No new money is created. You may hand me an I.O.U. slip stating when you will pay me back and with what interest, but that would still be just the same funds being traded back and forth between the two of us. I would have to have the money in my account to start with before I could loan it to you.
Bank lending is different. A bank can lend money and hence create a new deposit, which amounts to brand-new money, even if the bank does not have that money to start with. This is counterintuitive. In a later post we may flesh out this seemingly magical aspect of bank lending. See Overview of the U. S. Monetary System for a more complete discussion.
If you can tolerate a moment’s grandiosity, there’s no more important application of game theory than the evolutionary transition from prokaryotic cells to eukaryotic cells. All due deference to every game theorist ever, but the solution to the Prisoner’s Dilemma is literally in our DNA. One day cells were swimming around the primordial soup competing with each other in a zero-sum fight to the death for resources, the next they’re bonding together to form tissues to jointly acquire them. A couple billion years later and you’ve got hyper-specialization to the point of which cellular differentiation remains a bleeding-edge subject of biological research.
But this isn’t a post about the miracle of a body when it’s functioning perfectly. It’s about what happens when a cell goes rogue. When it defects on its neighbors and a cooperative strategy literal eons in the making. It starts gobbling up resources and reproduces at rates that threaten the whole enterprise, growing into a terrible little tumor of defection. The cooperative strategy in question moved passed simplicity countless generations ago: tissues employing Tit-for-Tat disaggregated back into the soup the first evolutionary round through. No, the strategy now is so fine-tuned it hasn’t had to deal with a major defector in eons of its collective evolutionary memory. If it is to succeed, it will have to selectively cut out those defecting cells without abandoning its core strategy, and do it fast, before it’s too late.
Which naturally brings me to the Republican party.
Political parties succeed based on two achievements. 1) They solve the collective action problem and, in doing so, achieve a scale of cooperation and exceed some critical mass threshold sufficient to self-perpetuate through the electoral process. The number of parties that can succeed at once, and the critical mass necessary to get to that point, are determined by the governing political institutions. 2) They maintain their cooperation at a scale sufficient to thwart the emergence of an alternative rival party.
Staying a dominant party is much easier than becoming one, but that doesn’t mean continued success is guaranteed. The weakness(es) of a party will depend on how it got there in the first place. The strategies for solving the collective action problem of this scale will be far more complicated than Tit-for-Tat or “Walk Away” and similar solutions distilled to the point of abstraction. They will involve all the solutions employed by cartels, religious groups, military forces, and every other collective dependent on high-levels of persistent cooperation. With that complexity comes weaknesses. Fault lines and backdoors that are typically guarded through a variety of social and legal barriers.
And they must be guarded, because the combination of scale and success will never cease to attract defectors. Those roaming cells, ostracized and cast out, always met with a wary eye, looking for a way in. Just imagine you are that rogue cell and you come across a population trained to always cooperate no matter what so long as it is deemed a member of the group. They seems so naïve! So vulnerable. But that’s how we succeeded! Always cooperate within the group. How big might your greed grow knowing you could defect and defect for all eternity, growing fatter and fatter off this suddenly maladapted globule of political ambition that can’t help but tear itself to shreds while giving you everything you ever wanted? It’s not just about the weakness of the party, but the kinds of agents these prospects are likely to attract.
In the coming weeks I’ll revisit this and ramble more about discuss some of the specific strategies employed by political parties, and the kinds of invasive agents and strategies they should expect. I’ll also speculate on how groups might institutionally respond and better protect themselves from both invading sociopaths, as well as their own hubris.
Inspiring articles:
Aimone, Jason A., et al. “Endogenous group formation via unproductive costs.” Review of Economic Studies 80.4 (2013): 1215-1236.
Aktipis, C. Athena, et al. “Cancer across the tree of life: cooperation and cheating in multicellularity.” Philosophical Transactions of the Royal Society B: Biological Sciences 370.1673 (2015): 20140219.
One of the many things I meant to do and did not have time for this Fall was a photo study of the political signs in my neighborhood. I did snap a few pictures, such as this one of a conservative house:
The next one is not a Biden/Harris sign, but they are supporting the Democrat senator Doug Jones.
The Biden signs far outnumbered the Trump signs. It’s a safe assumption that most Trump voters did not put out signs.
Tonight, you cannot tell which households supported which candidate. I think my election photo journalism failure might actually turn into a different story. Observe this street
Something CUTE that my Alabama neighbors do is put up an outdoor Christmas tree with white lights, like so:
When you drive down a street past dozens of these in a row, the effect is wonderful (and hard to capture adequately with my phone camera). It’s neither a political statement nor an anti-political statement. It’s a community that thrives despite their differences. This is something beautiful they do to enjoy together.
Like many neighborhoods, we also have “that house”:
Forget “The Christmas Prince” or “The Prince Christmas” or whatever is on Netflix. Why not spend your holiday refreshing this new vaccine dashboard?
Here’s the announcement:
Launching a new dashboard to track local news reports and state press releases on how many vaccine doses will be allocated to each state, since there seems to be no public federal effort. Browse each state's allocations and a map of doses per capita.https://t.co/CUP2W2ph7X
I personally know a few health care workers who got their shots (do not say “jab” to me) this past week. It’s all very exciting! Here at University of Alabama at Birmingham (UAB), the medical community has freezers, fortunately.
Jeremy and Doug have both talked about allocation this week. Economists get really jazzed about allocating scarce resources. It’s been frustrating to watch first tests and now vaccines not be available on a market. Excellent points are also made every week over at Marginal Revolution on how we are missing an opportunity to get the incentives right. Supply. Curves. Slope. Up. (Thousands. Dying. Every. Week.)
If you haven’t read Jeremy’s earlier post on vaccine allocation take a few minutes, it’s worth the read. We have fewer vaccines than people who want vaccines. Also, who actually gets vaccines is being decided through a priority system established by the federal government.
People do not seem outraged about the priority system. Probably this is because the priority queue has some grounding in our moral intuitions. In the absence of market allocation, you are forced into some allocation criteria other than price. What would the “right” allocation be? People seem to gravitate towards principles of merit, need, and equality (see my earlier post here) and one could view the allocation to healthcare workers as meeting the criteria of merit. These individuals are currently on the frontlines of exposure to the virus and have endured significant stress the last nine months.
At the same time, it is worth asking whether a switch to the allocation of vaccines through a market mechanism is better. Markets are appealing because there is so much information to take into account (e.g. should an X-Ray tech get the vaccine before a teacher). The presence of externalities complicates the story and implies that non-market allocation could do better. Though there appear to be substantial coordination problems with our current central planning approach.
Like other economists, I see the power of markets to coordinate plans and that makes me lean towards an auction format. I am not confident the government can centrally plan towards a more efficient allocation. However, I admit the ethics of distribution according to willingness to pay makes me reluctant to use auctions. I would favor randomization of who gets the vaccine (all have an equal chance which is morally appealing) with opportunities for side-payments where people can take advantage of their local information. Jeremy suggested a lump sum transfer for the poor but it seems this would introduce new complications like who counts as poor (what percent of FPL) and the correct size of the lump sum transfer.
This approach of randomization likely has the added benefit that it randomizes potentially adverse shocks. Because the vaccines were expedited in clinical trials, there could be unique and unknown long term consequences due to the nature of our current situation and how studies are conducted. If something bad does happen, shocks will be less concentrated within industries and medical distrust will be less concentrated within a subgroup. That seems like a valuable outcome that I haven’t seen people discuss (though I have been busy this week submitting grades and preparing for a new semester).
In the short term, there are only a few million doses of the COVID vaccines available, but well over 100 million adults in the US that want to take the vaccine if offered for free to the consumer. There are also billions worldwide that would like the vaccine.
So who should get it first? In practice in the US, the allocation method has already been determined politically: the federal government will allocate vaccines to the states, and states will allocate them to individuals based on a priority list: health workers and the most vulnerable first, then teachers, etc. The NY Times has a tool that shows you your probable place in line.
But essentially the allocation method being used is central planning.
John Cochrane has proposed a “free market” solution: sell the vaccine to the highest bidder. Or at least, sell some doses to the highest bidder.
As an economist, there is always some appeal in thinking about a free market solution. But there is a problem in this case: there are positive externalities from taking the vaccine. It not only benefits me, but it also benefits others. My willingness to pay only reflects the benefit to me, the private benefit. The social benefit is mostly ignored by a simple auction, and in the aggregate for a vaccine most of the benefits are likely to be social benefits. But positive externalities don’t imply we need to use central planning!
If you haven’t been living under a rock, you probably saw at least one image of Elon Musk’s “Starship” rocket blowing up last week. This is a really big rocket, some 165 ft high, which Musk intends to use to ferry humans to Mars, as early as 2026. And before that, paying passengers like you and I are to climb aboard for brief tourist excursions to outer space.
The rocket is designed to land back on its launchpad, to be ready for its next flight. That part is what went wrong last Wednesday. I snagged three screenshots from the live-streamed SpaceX video on YouTube to show what happened. The first image shows the vessel descending on its rocket jets, obviously dropping way too fast as it neared the ground.
This is what happened upon impact:
Ouch. It turns out that not enough fuel was getting to the rocket engines to slow the vessel’s descent.
Here are the smoking ruins:
Another man may have been chagrined over this outcome, but not the indomitable Musk. He had given this flight only one in three odds of landing intact, and he was ecstatic over the vast majority of things that went right, and the useful data collected. After all, the rocket did successfully take off, ascend to 40,000 ft (12 km), and mainly descend in the desired horizontal orientation to minimize overheating. Right after the blast he tweeted:
“Fuel header tank pressure was low during landing burn, causing touchdown velocity to be high & RUD, but we got all the data we needed! Congrats SpaceX team hell yeah!!”
When you are Elon Musk, a little RUD (Rapid Uncontrolled Disassembly) is all in a day’s work. Which may be partly why he accomplishes so much more than most of us.
Economist Writing Every Day 