Morning roundup

The morning's worthies, as I try to trim the tabs...

• Alcohol available for consumption, per capita, continues its long slow decline.
• Noah Smith on how America became the build-nothing country. The rant would apply well in New Zealand too.
• Great piece on minimum wages and crime, wading through a mess of seemingly-conflicting results. 
• Nikki Mandow with some nice examples of co-governance working well.
• Another solar plant planned. Just the electricity market working as it should. 
• Genesis power cutting its carbon emissions and planning more low-carbon generation. Just the electricity market and ETS working as they should. 
• NZ emissions increasingly decoupling from GDP growth. Just look at this track. 

Afternoon roundup

The closing of the browser tabs, so the poor thing can reboot, brings some worthies:

• Work from home is proving sticky in New York. The number of workers going into NYC offices is well under half of what it was pre-Covid. They're looking to turn underused commercial skyscrapers. That's what living with Covid looks like, in places that have been living with it longer than us. I don't think removing NZ's traffic light settings are going to return us to December 2019. 
• Nice. Now do contracting for PCR testing. 
• Face it. The NIMBYs are going to try to block your development in court no matter what you do to appease them. Spread the costs of inevitable lawsuits across more dwellings.
• It's not cancel-culture, it's cancel technology. 
• The Parliamentary Commissioner for the Environment warns against locking into hydrogen. Always the danger with winner-picking: you might bet the wrong one. Why not just let ETS prices take lead?
• Oh this is neat. ORBIS gives you the travel time between places in the Roman world. Rome to Alexandria in July? 14 days by fastest route and by cheapest route. Rome to Londinium? 39 days by cheapest route; 27 days by fastest route. 
• Fix the select committees already. 
• Covid testing is cheap relative to the alternative, but costs are still adding up for businesses.
• The return of the shibboleth.
• This looks fun: Townscaper.
• NZIER's tallied up employment, contribution to GDP and such for the alcohol sector. Here's the media release from the NZ Alcohol Beverages Council, and here's the report. We have 134 distilleries! There's a lot of the usual drill in portraying employment as a benefit rather than a cost, but it's a useful compilation of a pile of stats. I expect I'll be regularly googling the blog here to re-find the link to it. 
• Paranoia about the Mont Pelerin Society. Alas, it's just not that influential. 
• Would that more public goods could be coin-operated. 

Nerd Pride

Tyler Cowen reminds us of a Hanson point: politics is about status.

I was disappointed but not surprised by this passage by Gary Silverman:

What I like about Obamacare is that it shows some respect for “those people” – as Hudson called them in Giant – who are good enough to work the fields and mow the lawns, and build the roads and sew the clothes, and diaper the babies and wash the dishes, but somehow aren’t good enough to see a doctor from time to time to make sure there is nothing wrong inside.

That is in fact what most of politics is about, namely debates over which groups should enjoy higher social status and which groups should receive lower social status. Of course critics of Obamacare have their own versions of desired status reallocation, typically involving higher status for the economically productive.

...

The deeper point is that virtually all of us argue this way, albeit with more subtlety. A lot of the more innocuous-sounding arguments we use all the time come perilously close to committing the same fallacies as do these quite transparent and I would say quite obnoxious mistaken excerpts. One of the best paths for becoming a good reader of economics and politics blog posts (and other material) is to learn when you are encountering these kinds of arguments in disguised form.

I agree.

And so we come to Noah Smith's article wishing for higher nerd status, or at least an end to nerd-bashing.

Seriously, America. The nerd-bashing has gone too far. Sure, there is a grain of truth in all of the criticisms of the tech industry -- but only a grain. Yes, startups are riskier than many founders realize; but founders are people with good skills who will never go hungry. Yes, San Francisco rents are out of control, but this is more about development policy and NIMBYism than Google and Apple. Yes, inequality is increasing, but it’s increasing across all industries and classes, and bashing Silicon Valley isn't going to stop the march of automation. Yes, big American companies and corporate governance need to improve, but bashing “disruptive” startups isn't going to help the situation. Yes, some tech companies ignore the public interest when pushing for deregulation, but show me an industry that doesn’t do that. Yes, there are sociopaths and wackos among the ranks of tech entrepreneurs, but they’re certainly a tiny minority. (The only tech industry problem that really seems to live up to the hype is the sexism.)

...

We’re looking for rich, successful people to bash. And Silicon Valley happens to be where the rich, successful people are right now. So we’ve turned on the nerds.

... 

Still, I’m irked. I’m a child of the 1980s, when jocks ruled the high schools, and nerds were confined to the basement while the good ol’ boys slapped backs and made deals. When the bespectacled Bill Gates became the world’s richest person, something changed for the better, and I don’t want to go back to the old days. The tech backlash is just another situation where America needs to put aside its urge to turn inward and demonize some subset of the population. We should work to fix the problems associated with the industry, of course, but vitriol isn't the way to do it. The nerds are not the hosts of Mordor.

 Bryan Caplan arguably predicted much of this in his nerd/jock theory of history:

Notice: For financial success, the main measure where nerds now excel, governments make quite an effort to equalize differences. But on other margins of social success, where many nerds still struggle, laissez-faire prevails.

It's suspicious - and if you combine the Jock/Nerd Theory with some evolutionary psych, it makes sense. When the best hunter in the tribe gets rich, his neighbors will probably ask nicely for a share, if they dare to ask at all. But if the biggest nerd in the tribe gets rich, how long will it take before the jocks show up and warn him that "You'd better share and share alike"?

Punchline: Through the lens of the Jock/Nerd Theory of History, the welfare state doesn't look like a serious effort to "equalize outcomes." It looks more like a serious effort to block the "revenge of the nerds" - to keep them from using their financial success to unseat the jocks on every dimension of social status.

I'd love to see a version of Piketty that looks at inequality in dating success for those aged 16-25. Has that inequality gotten larger or smaller over time? Does anyone know? Does anyone other than the nerds care?

It wouldn't be hard to build a stylised case that social changes from the 1960s through to present that decoupled dating from marriage-search for the first decade of dating strongly benefited the jocks at the expense of the nerds. But we have no empirics on it. How would a Herfindahl dating concentration index change over time? Or a Gini coefficient?

Which inequalities matter is more interesting than what's going on on any particular margin of inequality.

So we won't all be fired then

Whenever I read stories about the growth of MITx or other equivalents, I get a bit nervous about the long run for academics. I've consoled myself with that academia is really a rather more complicated product than just book-learning: there's all kinds of consumption and complex human capital formation bundled in with it; MITx can't easily replicate that bundle.

Noah Smith helps ease my mind.

Economists (including at least one in my PhD graduating class) have dedicated untold numbers of papers to showing that college doesn't produce useful skills. But I think that this is missing the point; useful skills, which you mostly learn on the job, are not the only valuable form of human capital. There are three extremely important forms of human capital that you can't acquire on the job:
1) Motivation,
2) Perspective, and
3) Human networks.
These, I believe, are the types of capital that college is designed to build, both in Japan and in the United States.

Motivation, in Noah's setup, isn't about showing that you can complete arbitrary tasks on a deadline (like assignments); rather, it's about building a network of people who will smack you around if you slack off.

Perspective is what you get when you're immersed in a rich environment different from the one you came from - you learn from others just what it is that you want to do. I knew going into university what I didn't want to do: farming and working outdoors where temperatures can hit -40. I didn't know that I wanted to be an economics prof until a few years into study.

And the human networks are self-explanatory.

MITx can replicate the book learning. If it's awfully careful in how it sets up local tutorial groups, it might be able to replicate some of the motivation aspect, but not unless you can get a substantial number of high quality students to flip from traditional universities to the MITx model. I have a harder time seeing how it replicates the "figuring out what I want to do with my life" aspect of university; human network formation too requires some push from the university equilibrium to the MITx equilibrium.

College is useless as a mechanism for signaling intelligence. It's probably somewhat useful for signaling the ability to work hard and resist temptation, at least in the U.S. where many colleges require hard work (but not in Japan). It is about consumption, but it's too concentrated in time to be mostly about consumption. College is really about human capital, of the kind not conveyed in classes - motivation, perspective, and networking. Rather than a hideously, inefficiently expensive signaling mechanism, college is an ingenious technology for building the kinds of human capital that are scarce among smart people in rich countries.

The biggest risk isn't from students wanting to switch from universities to online options like MITx, it's from governments deciding that massive subsidies to help high human capital types better network with each other isn't worth the public investment. The best counterargument is that publicly funded tertiary education with a strong bias towards subsidizing lower income students directly rather than having broad-based tuition subsidies or interest-free loans is probably the best way of facilitating upwards mobility among kids born in lower deciles but with higher innate ability. Noah's 'Perspective' argument here seems pretty critical. If you go to trade school to become a mechanic, you learn to be a mechanic, but you don't get exposure to the wider range of potential life options.