Adam Smith’s Big Project, & Þe Place of His Wealth of Nations in It; & BRIEFLY NOTED: For 2021-11-25 Th
Things that went whizzing by that I want to remember:
First: Adam Smith’s Big Project, and the Place of His Wealth of Nations in It:
J. Bradford DeLong: Lecture Notes: Adam Smith: ‘Adam Smith starts with the observation that humans are largely but not exclusively self-interested creatures: we are, largely but not exclusively greedy. Yet we have a complex and sophisticated societal division of labor. And that division of labor is essential to our prosperity. Indeed, it is essential to our survival: drop one of us into the Sierra Nevada, even in summer—or even in our environment of evolutionary adaptation in the Horn of Africa—and we will quite likely die. Drop 100 of us, and we will quite likely survive, and even flourish. How can animals that are by nature greedy nevertheless cooperate on a large scale? That is the deep moral-philosophical question that we can see both of Smith’s big books—his Theory of the Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations—as aimed at. As Robert Heilbroner puts it in his The Worldly Philosophers, Smith: is interested in laying bare the mechanism by which society hangs together….
Adam Smith says that our ability to create and maintain a complicated societal division of labor that is so productive rests on four facets of human nature:
language: in that we are an anthology intelligence—what one of us knows or learns, pretty quickly all of us within and many of us without earshot will quickly learn;
hierarchy: in that we tend to form and respect dominance hierarchies in which we can command and obey;
gift exchange: in that we bind ourselves together by forming gift-exchange relationships—what Adam Smith called our “natural propensity to truck and barter”: we firmly expect to be and are very happy when we trade favors with each other, and we are uneasy when we feel as though we are always giving or always receiving, for we want the exchange of gifts and favors to be reciprocal, and roughly balanced.
benevolence: in that our weak sense of fellow-feeling and empathy can be trained up to be quite strong and govern our decisions in gives us a powerful bias toward choosing win-win arrangements.
The Wealth of Nations, of course, is about (3). Back in our environment of evolutionary adaptation, we could form gift-exchange relationships only with a few: our close neighbors, our good friends, and our near kin. Trust, you see, is necessary for a long-term gift-exchange relationship, and short-term such relationships are rare because each has to have and be willing to give up something the other wants or needs right now. And since we are largely self-interested, trust is hard to generate and maintain without other binding social ties.
Hence the key importance of the human cultural invention of money in forming our large-scale human society: money means that any one of us can make a short-term one-shot exchange relationship with any other one of us, someone who we may well never see again. Money, you see, is manufactured trust, and it allows us to extend our societal division of labor to encompass, indirectly, nearly everybody else in the world…
LINK: <https://delong.typepad.com/files/lectureadam-smith-2019-11-21-1.pdf>
One Video:
MGMT: Electric Feel <https://www.youtube.com/watch?v=MmZexg8sxyk>:
Very Briefly Noted:
Susan Levenstein: Promising Pills, but Lengthening Shadows: ‘Paxlovid… Pfizer’s new combination… a novel antiviral, PF-07321332, tailor-made for SARS-CoV-2… [plus] a low dose of an AIDS drug called ritonavir that lets PF-07321332 hang around longer and stronger… <http://www.stethoscopeonrome.com/>
Wendy Edelberg: What Does Current Inflation Tell Us About the Future?: Some signal, but not a lot…. Because the factors that are leading to inflation are pandemic-related and therefore temporary, the current trend does not forecast the future… <https://www.hamiltonproject.org/blog/what_does_current_inflation_tell_us_about_the_future>
Nicholas Gruen: Discursive Collapse—Discursive Reversal: The Micro-Foundations: ‘The discipline exercises what Marcuse called ‘repressive tolerance’ which is to say it doesn’t directly repress the discussion, it tolerates it, and ignores its corrosive implications…. I’ll point to another brilliant explanation of what I take to be the same phenomenon in macro… <https://clubtroppo.com.au/2015/05/09/discursive-collapse-discursive-reversal-the-micro-foundations/>
Economist: Which Vaccine Is the Most Effective Against the Delta Variant? | The Economist: ‘The mRNA jabs seem best—but all offer protection… <https://www.economist.com/graphic-detail/2021/11/17/which-vaccine-is-the-most-effective-against-the-delta-variant>
Wikipedia: Xi Zhongxun <https://en.wikipedia.org/wiki/Xi_Zhongxun>
Rivka Galchen: Can Nuclear Fusion Put the Brakes on Climate Change?: ‘Amid an escalating crisis, the power source offers a dream—or a pipe dream—of limitless clean energy… <https://www.newyorker.com/magazine/2021/10/11/can-nuclear-fusion-put-the-brakes-on-climate-change>
Paragraphs:
Paul Krugman (May 21, 2020): Crying Fire! Fire! In Noah’s Flood: ‘I’m getting a lot of rage from people who want their deficit-and-inflation crisis, and won’t take no for an answer…. I was trying to come up with an explanation of the curious insistence that we’re facing an imminent interest rate and/or inflation crunch; then I realized that John Maynard Keynes had already done that, in explaining the hold classical economics retained on thought despite its obvious inability to account for the Great Depression: “The completeness of the Ricardian victory is something of a curiosity and a mystery. It must have been due to a complex of suitabilities in the doctrine to the environment into which it was projected. That it reached conclusions quite different from what the ordinary uninstructed person would expect, added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue. That it was adapted to carry a vast and consistent logical superstructure, gave it beauty. That it could explain much social injustice and apparent cruelty as an inevitable incident in the scheme of progress, and the attempt to change such things as likely on the whole to do more harm than good, commended it to authority. That it afforded a measure of justification to the free activities of the individual capitalist, attracted to it the support of the dominant social force behind authority…” And all of this has a real, damaging effect on policy. The econ team at Goldman Sachs (not online) makes the interesting point that FOMC inflation forecasts are pulled up by a small group that keeps forecasting much higher inflation than anyone else; this in turn helps limit the Fed’s willingness to support the economy. And the deficit hawks have, of course, killed any hope of more stimulus. Anyway, I’m sure that the usual suspects won’t change their tune. Even if we do have a Japan-style lost decade, they’ll keep predicting hyperinflation just around the corner…
LINK: <https://krugman.blogs.nytimes.com/2010/05/21/crying-fire-fire-in-noahs-flood-3/>
Robert Skidelsky: What Killed Macroeconomics?: ‘Mathematical refinement aside, economics is back to where it was a century ago: the study of the allocation of given resources, plus the quantity theory of money. Macroeconomics—the theory of output as a whole, which was invented by John Maynard Keynes—has virtually disappeared, despite the revival of key tools when crises erupt…. For example, what causes unemployment? The standard textbook answer is “downward wage rigidity.” A hairdresser who asks for a wage of $14 per hour, but who can be profitably employed only at $13 per hour, is choosing not to be employed. That choice is thus voluntary, reflecting a preference for leisure, or a decision not to be a hairdresser. The same is true of all workers in an economy. On this view, what is called unemployment is a choice not to work…. So, if the government expands the money supply in an effort to increase employment, the only result will be inflation, because monetary expansion does nothing to increase the supply of labor willing to work. Monetary policy should thus concern itself solely with the objective of price stability, which is best entrusted to an independent central bank free from political temptation. Most sensible economists have quailed before the logic of their own assumptions. Thus, in their recent textbook Macroeconomics… Daron Acemoglu… David Laibson, and… John List… [claim] cyclical… unemployment occurs because of “technology shocks, changing sentiments, and monetary/financial factors,” and is “amplified by downward wage rigidity and multipliers.”… Modern economic theory holds that obstacles to full employment are not inherent but contingent. Thus, they can be minimized by labor-market reforms designed to “unstick” sticky wages, and by better regulation of banks…. Unless economists recognize the existence of inescapable uncertainty, there can be no macroeconomic theory, only prudential responses to emergencies…
Charlie Stross: An Update on the Revolutionary Experiment: ‘November 2021, and Brexit is still on-going. I am trying to refrain from posting wall-to-wall blog essays about how badly the on-going brexit is going, but it’s been about 9–10 months since I last gnawed on the weeping sore, so here’s an interim update…. Brexit is a utopian nation-building program that about 25–30% of the nation are really crazily enthusiastic about (emphasis on “crazy”—it’s John Rogers’ crazification factor at work here), and because they vote Tory, Johnson is shoveling red meat into the gimp cage on a daily basis. Because Brexit is utopian it can never fail, it can only be failed. So it follows that if some aspect of Brexit goes sideways, traitors or insufficiently-enthusiastic wreckers must be at fault. (See also Bolshevism in the Lenin/early Stalin period.) Alas, it turns out that the Brexiter politicians neglected to inform themselves of what the EU they were leaving even was, namely a legalistic international treaty framework. So they keep blundering about blindly violating legal agreements that trigger, or will eventually trigger, sanctions by their trading partners…. In general, Conservative MPs fall into two baskets: True Believers and Corrupt Grifters. In normal times (i.e. not this century so far) the True Believers were tolerably useful insofar as they included Burkean small-c conservatives…. But Thatcher and her followers weren’t pragmatists, they were ideologues. And by divorcing government from measurable outcomes—instead, making loyalty to an abstract program the acid test—they opened the door for the grifters, who could spout doubleplusgood duckspeak with the best of the Thatcherites and meanwhile quietly milk their connections for profit-making opportunities…. When you’re a grifter and the marks are about to notice what you’re doing, standard procedure is to scream and shout and hork up a massive distraction. (Johnson’s own term for this is “throw a dead cat on the table”.) The Tories focus-group tested “culture wars” in the run up to the 2019 election and discovered there was a public appetite for such things among their voter base (who trend elderly and poorly educated). Think MAGA. The transphobia campaign currently running is one such culture war: so is the war on wokeness that cross-infected the UK from you-know-who. It’s insane. Turns out that about 80% of the shibboleths that infect the US hard right play well to the UK centre-right. The notable exception is vaccine resistance – anti-vaxxers are a noisy but tiny fringe…
LINK: <https://www.antipope.org/charlie/blog-static/2021/11/an-update-from-the-revolutiona.html#more>
Simon Kuper: What Truly Unites the Boris Johnson Party: ‘This Tory party is the Boris Johnson party. It has a new wing—former UK Independence party voters who are personally loyal to Johnson—and an updated inner circle of privately educated Brexiters who are his familial tribe. In short, it’s the quintessentially Johnsonian mix of anti-elitists and elite. And the only ideology uniting wing and circle is Brexit. The UK’s threat to renege on the Northern Ireland protocol that it agreed with the EU sets the tone. The party plans to spend this decade fighting Brussels, Scottish Nationalists and Remainers. What unites the Johnson party is Johnson. But all attempts to identify his personal ideology have failed. He isn’t a social liberal, given that his government hounds immigrants and seeks out conflicts with the “woke”. He isn’t a small-state Thatcherite, given that Britain’s tax burden is set to hit its highest level since the 1950s. And he isn’t a committed Brexiter, given that before the referendum he wrote two opposing newspaper columns to decide his own position…
LINK: <https://www.ft.com/content/29f84628-46aa-4196-ab11-fe2047fec8d3>
Timothy Burke: Academia: Straight to the Core: ‘I feel some attraction to the curricular ideal of a “core curriculum”…. Roosevelt Montas…. The program, he says, does have to focus on “core texts”, it does have to be chronological (which means that authors besides white men can only enter into the Core at the end of the sequence, in his view), and it does have to stay focused on how the Western tradition was shaped because that is “the lineage of thought and debate that has most shaped the Western world”. Cue the sad trombone noise, because that’s where the problem really lies with the idea as Columbia practices it…
LINK:
Daniel Larison: Why Hawks Keep Getting Russia Wrong: ‘Exaggerating the threat and misunderstanding what Russia wants are good ways to blunder into a serious crisis. Jeff Hawn makes a persuasive case that Russia is not going to attack Ukraine: “But is Russia actually about to attack Ukraine? The answer, based on the empirical evidence, seems to be a resounding no. These moves might be disturbing, especially given Russia’s history in Ukraine—but they don’t presage war.”… The likely economic and political costs that an invasion would entail would be significant, Russia would gain little or nothing from an invasion, and it would be saddled with occupying hostile territory indefinitely. Intervening in 2014 as Russia did had significant costs as well, but these were offset by the gain of securing Crimea. A Russian invasion of more Ukrainian territory would gain them nothing but escalating costs the longer that an occupation dragged on. I would add that Russia hawks keep sounding the alarm about a possible invasion because they have a distorted understanding of the Russian government’s interests and motivations. They also consistently project their own aggressive tendencies onto other states…. Leonid Bershidsky argues that Putin would not want to risk Nord Stream 2 by attacking Ukraine, and this also makes a lot of sense…
Phil Libin: mmhmm: ‘It was 42 days between the founding and when we released our private beta on July 7th [2020]…. We actually didn’t want publicity in July because we wanted to do a limited closed invite-only beta so that we could iterate quickly on the product. I had come up with a four year plan for our investors and it was just one word per year. Year one was, “get started.” Put something out into the world. We didn’t want fomo or marketing. A closed beta would allow us to invite a statistically significant number of new people every day so that we could test whether the previous day’s work had made things better or worse…. We decided to do one story and I’ve been friends with Casey Newton for a while so I reached out to him and he wrote a piece for the Verge…. Trying to keep it quiet failed. We had a hundred thousand sign ups within a few weeks and we were only letting in a couple of hundred people at a time so the list got pretty long. There was definitely a real pent up demand for something to make you smile a little bit on video, which we’re happy to do. We ran the private beta from July until a few months ago…. I have a whole quasi religion about metrics and there’s a framework that I use called State Machine. This is how we ran Evernote and I’ve applied it to every other product or company that I’ve worked on or invested in since. There’s a lot of different things to optimize for, but in the long term what we care about most is the growth of high value users…. Who are the people for whom we are having a meaningful impact on? Whose lives or jobs are meaningfully better off because we exist as a product? We want to measure that and we want that number to be growing every month. But on the way to that, there’s a bunch of other steps in the middle. We’ve been pretty intentional about how we think about how we measure value…. I think the most important job of a CEO is to isolate the rest of the company from fluctuations of the hype cycle because the hype cycle will destroy a company. It’ll shake it apart. In tech the hype cycles tend to be pretty intense. At mmhmm we are very much in the Venn diagram of two hype cycles. There’s a general hype cycle around video, which is going to be way up and down over the next few years…. There is also a hype cycle around early and mid stage startup investment…. I make a lot of demo videos. I do a lot of jazz hands. But that’s not actually my job. My job is to gather really brilliant people and then make sure that they’ve got a few years of not being buffeted by the hype cycle so they can actually do something great. That’s how I try to advise people when they make the mistake of asking for my advice on stuff like this…
LINK:
