What Should My Follow-Up Book Be?, &
BRIEFLY NOTED: For 2022-10-26 We
CONDITION: Slouching Towards Utopia Has Still More Fans:
Matt Yglesias: Transcript: ‘What are three books you would recommend to the audience?… Brad DeLong’s… Slouching Towards Utopia… a broad-based history of economic growth over the course of the long 20th century is really, really good…
FIRST: What Should My Follow-Up Book Be?
What should be the first things I rescue from the cutting room floor from the Slouching Towards Utopia <bit.ly/3pP3Krk> process and add to to turn into another—shorter—book?
Here is one possibility:
Ensorcelled by the Devil of Malthus
World Political-Economy History, -6000 to 1870
Between 1848 and 1873 John Stuart Mill published the successive additions of his Principles of Political Economy, with Some of Their Applications to Social Philosophy. In each edition of the book he included the following passage:
Hitherto it is questionable if all the mechanical inventions yet made have lightened the day's toil of any human being. They have enabled a greater population to live the same life of drudgery and imprisonment, and an increased number of manufacturers and others to make fortunes. They have increased the comforts of the middle classes. But they have not yet begun to effect… great changes in human destiny… <https://archive.org/details/in.ernet.dli.2015.36903>
1870 was not that long ago. For somebody like my son, born in 1990, it was the date of birth of his great-great grandparents. From 1870 to today is five generations. From -6000 to 1870 is 260 generations. Moreover, there was about as much proportional technological progress from -6000 to 1870 as there has been from 1870 to today. Yet between -6000 and 1870 typical human standards of living increased by only perhaps 40% as population grew from 5 to 1300 million—260-fold. By contrast between 1870 and today humanity’s collective standard of living has grown ten-fold as human population has grown from 1.3 to 7.8 billion—six-fold.
That population growth is the answer to the question of why humanity’s productivity and standard of living has risen so much since 1870, while it rose so little before. Before 1870, that greater population puts more pressure on resources caused nearly all of pre-1870 technological progress to be eaten up by the need to compensate for the smaller farm sizes and poorer near-surface ores available to the average member of the growing population. Before 1870, technology lost its race with fertility. After 1870, it won it.
Thus the first questions about the pre-1870 economy present themselves:
Why was technological progress so slow before 1870?
And why was population growth so relatively fast, by the yardstick of the contemporaneous rate of technological improvement, over the nearly 8 millennia between -6000 and 1870?
Why, and how?
Put a pin in those questions.
That technology lost its race with fertility over -6000 to 1870 profoundly shaped all of human history up to 1870. Technology’s loss of its race against fertility meant that the pre-1870 world was one of dire poverty: there was absolutely no chance, back then, for humanity to be productive enough to bake a sufficiently large economic pie for everyone to have enough. People, however, still desperately wanted enough for themselves and their families. What to do? Since you could not produce with high enough productivity, you chose—if you could—the alternative: to take. You established yourself as part of the elite, élbowed competitors for membership out of the way, dominated, and took: history was then a coalition of thugs-with-spears plus their accountants, bureaucrats, and propagandists. They lived the (relatively) good life that we remember as the high civilizations of the past. The strong did what they wished, while the weak suffered what they must.
This book is about those processes, and those years during which humanity was ensorcelled by the Devil of Malthus…
Very Briefly Noted:
App Economy Insights: 🚘Tesla: Bigger than Apple?🚘: ‘Why Elon Musk believes Tesla will be a $4 trillion company…
Tracy Alloway & Joe Weisenthal: That Sound You Hear Is a Reshuffling of Global Capital…
Wikipedia: Sankey diagram…
Michael A. Clemens & Ethan G. Lewis: The Effect of Low-Skill Immigration Restrictions on US Firms and Workers: Evidence from a Randomized Lottery: ‘We evaluate the marginal impact of the quota on firms entering the 2021 H-2B visa lottery using a novel survey and pre-analysis plan. Firms exogenously authorized to employ more immigrants significantly increase production (elasticity +0.16) with no decrease or an increase in U.S. employment (elasticity +0.10, statistically imprecise) across several pre-registered subsamples. The results imply very low substitutability of native for foreign labor in the policy-relevant occupations…
Norman Angell: The Great Illusion…
Robert Darnton: The Meaning of Mother Goose: ‘The mental world of the unenlightened during the Enlightenment…. Consider a story—a story everyone knows, though not in the following version, which is the tale more or less as it was told around firesides in peasant cottages during long winter evenings in eighteenth-century France…
Martin Wolf: Does Economics Drive All Politics: ‘That fever captured by the Brexiters… may now break, and we will get back to something more normal…. No one imagines we won’t have a fair election. Nobody imagines that we won’t be able to get rid of leaders who misbehave and that’s at least modestly encouraging.
Branko Milanovic & al.: Pre‐Industrial Inequality: ‘This article infers inequality across individuals within each of the 28 pre-industrial societies, for which data were available, using what are known as social tables. It applies two new concepts: the inequality possibility frontier and the inequality extraction ratio. They compare the observed income inequality to the maximum feasible inequality that, at a given level of income, might have been ‘extracted’ by those in power. The results give new insights into the connection between inequality and economic development in the very long run…
¶s:
If you want to claim that conservative governance is good for Britain and that Liz Truss’s proposed policies were “sound in economic policy terms”, do not:
Stress how British economic growth ceased under Cameron, May, Johnson, and Truss…
Lead with the fact that the lead element of her “sound plans” was a “£60 billion blowout”…
Stress how her tax cuts were too small for even swivel-eyed true believers to think they would have significant supply-side investment-boosting effects…
Wave hands about how this time red tape really would have been cut.,.
John Cochrane & Jon Hartley: The Liz Truss Tragedy: ‘The country’s economy is not growing. Its GDP per capita is lower than it was in 2007…. Sound as Truss’s plans were in economic-policy terms, her government’s handling of the messaging and the politics was spectacularly inept…. Truss’s announcement of a £60 billion ($68 billion) blowout to hold down gas prices…. By starting with taxes and subsidies, Truss and Kwarteng guaranteed that nobody would pay attention to the… essential pro-growth regulatory reforms that they had described in the 2012 book Britannia Unchained…. Truss had also planned to bring back North Sea oil production and lift the UK’s ban on fracking. These are sensible responses to a global energy crisis…. Truss’s critics seized on UK bond-market hiccups, though these were… largely attributable to the Bank of England raising rates, and to a pension risk regulation fiasco. Nonetheless, Truss quickly gave in…. When an iron lady was needed, Truss proved to be made of straw…
While Noah Smith thinks that any change to Twitter will ultimately get us out of the unsatisfactory rut we are stuck in and to a better place, I am much more skeptical. I am looking forward with some dread to a Night of the Chaos Monkey:
Matt Levine: Elon Musk Might Buy Twitter This Week: ‘Oh Elon. “The most entertaining outcome is the most likely,” Elon Musk once tweeted, as far as I can tell not about a particular event but as a general life philosophy…. It does seem like the deal will close this week. Bloomberg’s Paula Seligson, Katie Roof and Ed Hammond reported last week… bankers and lawyers are preparing paperwork… talks… have turned cordial… banks… led by Morgan Stanley, are also ironing out the steps needed to finalize funding…. Part of me feels like it will never really be over. Lots of story lines will continue past closing…. Musk Twitter is going to have to pay something like $1.2 billion a year in interest to its banks…. What if it doesn’t make enough money to cover the interest? Will Musk chip in some money out of his own pocket? Will he not, and dare Morgan Stanley et al. to try to take the company from him? What will they do? Imagine being Morgan Stanley and deciding whether to foreclose on Musk Twitter. The downsides of foreclosing are (1) Musk is the richest person in the world and an important client and now you have enraged him and (2) now you own Twitter. Does not seem fun…. There is something poetic about the world’s richest person issuing the world’s largest pile of unsellable debt…. Musk did not become the world’s richest person by being stable and conservative and always honoring the letter and spirit of his commitments. Will he pay back this debt? Maybe! We have a few years to find out. Also he’s going to fire everyone…. Musk’s basic content plans for Twitter are (1) less moderation and (2) less spam, and while those goals do not logically conflict with each other, there is an obvious practical tension…. Also it is “national emotional wellness month” at Twitter, oops…
Pro-egalitarian intellectual judo from the sensei:
Adam Smith: Wealth of Nations: ‘Is this improvement in the circumstances of the lower ranks of the people to be regarded as an advantage or as an inconveniency to the society? The answer seems at first sight abundantly plain. Servants, labourers, and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.
I would recommend Barry Eichengreen: Globalizing Capital, and Golden Fetters. I get very anxious when I start writing about such things, because I compare myself to Barry, and he is ssssoooo good…
Title: "Milton Friedman Questioned Keynesianism and Ended up Founding a Religious Cult in Economics Departments."
Subtitle: "But he was OK with that."