Archive for the ‘economics’ tag
Currencies of the World Map
I really liked Ross Douthat’s column yesterday about the way work and politics fits together:
But the universal 15-hour workweek is not exactly with us yet. Instead, a different trend seems to be emerging, in which well-educated professionals — inspired by rising pay and status-obsessed competition — often work longer hours than they did a few decades ago, while poorer Americans, especially poorer men, are increasingly disconnected from the labor force entirely. (That this trend coincides with widening inequality is not coincidental.)
National Geographic made this really cool map a few years back (which I just caught on /r/MapPorn) of where people live, and how much money they make. Pretty cool just to look at, but if you click through you can drill deeper into the tiers of wealth that they shaded the map with.
I won’t say anything of his news is huge or mind-blowing. I’m linking to it at least in part because Bill Gates has a blog and I’ve never linked to it. But it’s hard to say it’s not good:
Child mortality went down—again. One of the yearly reports I keep an eye out for is “Levels and Trends in Child Mortality.” The title doesn’t sound especially uplifting, but the 2013 report shows amazing progress—for example, half as many children died in 2012 as in 1990. That’s the biggest decline ever recorded. And hardly anyone knows about it! If you want to learn more—and I’d urge you to—the report has a good at-a-glance summary on page 3.
I’ve got a bit a (well-earned) reputation for seeing Christmas as inefficient economically. Tyler Cowen raises some interesting points both for and against that view which are worth a look. This idea made me chuckle, though that hardly makes it wrong:
Clustering a lot of the buying and marketing at the same time may lead to a better matching of purchases and products, a bit like “speed dating.”
Since the start of the current economic downturn all those years ago, this question comes up pretty regularly, and never really gets a satisfying answer. I don’t know that I’d call Jed S. Rakoff’s explanations “satisfying”, but it’s both less political and more plausible than any other explanation I’ve seen:
In recent decades, however, prosecutors have been increasingly attracted to prosecuting companies, often even without indicting a single person. This shift has often been rationalized as part of an attempt to transform “corporate cultures,” so as to prevent future such crimes; and as a result, government policy has taken the form of “deferred prosecution agreements” or even “nonprosecution agreements,” in which the company, under threat of criminal prosecution, agrees to take various prophylactic measures to prevent future wrongdoing. Such agreements have become, in the words of Lanny Breuer, the former head of the Department of Justice’s Criminal Division, “a mainstay of white-collar criminal law enforcement,” with the department entering into 233 such agreements over the last decade.
This site got linked from everywhere this week, and that’s because it’s amazing.
Planet Money is a great and approachable podcast about the American economy from NPR, and their long project to make a t-shirt has culminated in an amazing multimedia experiences of a site, with a story that reminds me of I, Pencil (on Link Banana). Truly great.
I read this essay over the summer, but then forgot about it until I saw a tweet from Paul Ford. It’s an interesting consideration of the economics of bike theft. The heart of the issue, as you may already recognize, is this:
For all practical purposes, stealing a bike is risk-free crime. It turns out there is a near zero chance you will be caught stealing a bike (see here) and if you are, the consequences are minimal.
Conor Friedersdorf has an interesting theory about the online illegal drug marketplace, The Silk Road, that authorities shut down a few weeks ago:
But for all of the DOJ details that, if accurate, make The Silk Road an indefensible enterprise, I can’t help but conclude, after reading the complaint, that the world is actually going to be a more dangerous place in the absence of the online marketplace.
It’s an interesting idea, and one I find believable.
That said, I do think it’s likely that this specific market contained almost exclusively nerdy and/or upper-class shoppers. I find it hard to buy that those demographics are typically involved (or victimized by) violent drug markets. Suburban (or more controversially: white, rich) drug distribution is a almost always — for better or worse — ignored by authorities specifically because it’s free of the side-effects Friedersdorf is positing that the Silk Road didn’t have.
Perhaps this just shows that I like Apple, but I really like John Gruber’s essay about why Clayton Christensen’s famous disruption theory seems to be sustainably inaccurate in the case of Apple.
There have been periods of low-end Clayton Christensen-style disruption — the Japanese imports in the ’70s and ’80s and corresponding collapse of Ford, GM, and Chrysler’s collective market dominance is a good example. But it is undeniably true that there is a sustainable and profitable high-end of the market, occupied by companies like BMW, Mercedes-Benz, and Porsche. Point this out and someone will inevitably argue that sure, those companies are thriving, but they all have tiny market share. But Apple is sort of like BMW, Mercedes, Porsche, and Lexus all rolled into one. There just aren’t that many competitors for this segment of the market in phones and tablets, and most of them aren’t very good.
Building on his idea of three capitalisms (LB), I really liked this piece from Michael O. Church about how we can understand the economy in terms of the biological idea of breeding strategies. It won’t blow up your head, but it’s a really interesting lens to apply.
An r-strategist doesn’t care about social stability, because the general assumption is that with a few hundred offspring, some will thrive no matter how damaged the environment becomes. K-strategists, on the other hand, want social progress because a fair, reasonable, predictable, and progressively improving society is the one in which quality offspring have the best chances.
I enjoyed Freddie Deboer’s review of Jaron Lanier’s Who Owns the Future, a book about which it seems I was right to be both interested in and dubious of. This paragraph is, I’m increasingly convinced, the trenchant and unanswered question facing the future of the capitalistic economies:
It is hard to overstate: This country, in its current condition, has no other option but something close to full employment. Our pathetic social safety net, even absent the contracting effect of austerity measures, can’t fill in the gaps caused by the demise of ubiquitous employment. Even the counterrevolution has no other idiom; the most common epithet directed toward Occupy protests, after all, was “Get a job!” That the near impossibility of getting a job was the point for many who were protesting was too destabilizing a notion to be understood. In the short term, I have no doubt that the unemployment rate will fall. The question is the long-term structural dependability of a social contract built on mass employment.
I’m no economist nor libertarian, but I was pretty intrigued by the points Michael Munger makes about recycling in this essay. A non-recycling thing (that turns out to be pretty important) I was surprised by:
Officials need keep landfill prices artificially low to discourage illegal dumping and burning.
This is one of those points that’s obvious once stated but rarely considered. The Heteconomist breaks down exactly why the kind of job you want to have is precisely the opposite of the kind of job an employer wants to offer.
Satisfying jobs – let’s call them ‘good jobs’ – will generally be ones where learning occurs at a steady pace more or less indefinitely, probably as part of a defined career path. Bosses would prefer not to offer these, and will always be looking for ways to deskill roles that, for now at least, need to allow workers greater autonomy, ingenuity, and scope for on-the-job learning.
(via Marginal Revolution)
Jared Diamond’s review of Why Nations Fail isn’t all that positive, but this distinction from the book was one I’d never thought of:
Among non-European countries colonized by Europeans during the last five hundred years, those that were initially richer and more advanced tend paradoxically to be poorer today. That’s because, in formerly rich countries with dense native populations, such as Peru, Indonesia, and India, Europeans introduced corrupt “extractive” economic institutions, such as forced labor and confiscation of produce, to drain wealth and labor from the natives. (By extractive economic institutions, Acemoglu and Robinson mean practices and policies “designed to extract incomes and wealth from one subset of society [the masses] to benefit a different subset [the governing elite].”)
But in formerly poor countries with sparse native populations, such as Costa Rica and Australia, European settlers had to work themselves and developed institutional incentives rewarding work. When the former colonies achieved independence, they variously inherited either the extractive institutions that coerced the masses to produce wealth for dictators and the elite, or else institutions by which the government shared power and gave people incentives to pursue. The extractive institutions retarded economic development, but incentivizing institutions promoted it.
By all accounts I’ve seen Charles Murray’s new book is important. David Brooks offers a pretty succinct summary of why:
His story starts in 1963. There was a gap between rich and poor then, but it wasn’t that big. A house in an upper-crust suburb cost only twice as much as the average new American home. The tippy-top luxury car, the Cadillac Eldorado Biarritz, cost about $47,000 in 2010 dollars. That’s pricey, but nowhere near the price of the top luxury cars today.
I enjoy occasional dips into the field of Marxist cultural analysis, but I know it’s not for everyone. If you like it too, or are just interested to try some, this piece by Slavoj Žižek highlights many of the best things that those theories can contribute to out modern understanding of the world. A sample:
If the old capitalism ideally involved an entrepreneur who invested (his own or borrowed) money into production that he organised and ran and then reaped the profit, a new ideal type is emerging today: no longer the entrepreneur who owns his company, but the expert manager (or a managerial board presided over by a CEO) who runs a company owned by banks (also run by managers who don’t own the bank) or dispersed investors. In this new ideal type of capitalism, the old bourgeoisie, rendered non-functional, is refunctionalised as salaried management: the new bourgeoisie gets wages, and even if they own part of their company, they earn stocks as part of their remuneration for their work (‘bonuses’ for their ‘success’).
(via The Browser)
Have I ever told you how much I love David Brooks? (Yes, yes I have.) It’s because he says sensible things like this:
In sum, in the progressive era, the country was young and vibrant. The job was to impose economic order. Today, the country is middle-aged but self-indulgent. Bad habits have accumulated. Interest groups have emerged to protect the status quo. The job is to restore old disciplines, strip away decaying structures and reform the welfare state. The country needs a productive midlife crisis.