No? Then I would like to direct your favorable attention to “What elites do instead of providing services”. The analysis in there of why the very wealthy and very powerful prefer big, grand showpieces rather than workaday, functional infrastructure is brilliant, and seems to me quite right — devastatingly right. Please go read, then subscribe.
Author: stevereads
Of all cities, Cambridge should be the very last one to try killing an innovative, useful service. This is highly upsetting. Cantabrigians, you should attend the License Commission hearing tonight.
Once in a very great while, I find something that I *swear* is an extended academic joke. I don’t mean “joke” in the sense that it’s unserious; I mean that the delivery of the whole thing is conducted with a tongue very forcefully rammed into a cheek. Maybe the best example of such a thing is Leo Harrington’s talk proposing an analogy between Hegelian logic and some topics in group theory. There’s just no way he’s serious there, but I’ll be damned if the man ever cracks a smile.
Pomeranz’s [book: The Great Divergence] is deadly serious. What could be more serious than a discussion of why the West won? The whole discussion is so often laden with moralistic Gregory Clark-style musings, and very often the whole exercise seems like an excuse to praise white people.
Which is why Pomeranz is so funny, to me at least. Throughout the book (I’m about halfway done) I hear him humming gently in the background, “It’s the slavery, stupid”. The rest of the book is very rigorous academic garb for that very simple idea.
I’m absolutely certain that I undervalue the importance of slavery to literally every bit of American history. That’s why constantly reminding myself, via something like Ta-Nehisi Coates’s reparations piece, is so vital.
The somewhat longer story, from Pomeranz, is that many nations were running up against fundamental labor and land constraints in the 1700s, and that Western Europe eliminated those constraints, respectively, by a) enslaving Africans and bringing them to the Americas, and b) taking over North America and killing all the native people there.
I really do hear Pomeranz saying throughout, in as measured a way as possible, “You are ignoring the biggest story of at least the last half-millennium if you ignore these.” That’s what I hear when he politely swats down one story, namely that white people had developed a habit of consumer acquisitiveness which started with increased consumption of sugar and tea. I hear Pomeranz quietly saying, “Interesting that you focus on the *consumers* of the sugar. Where do you think Western Europe got all that sugar?”
Thus far the bulk of the argument has been to show that the data don’t show any significant differences between Chinese culture and the Western European one; and to the extent that there are any such differences, they tend to tilt in China’s favor. Pomeranz shows that the Chinese government was no more resistant to urbanization than the British one; that it wasn’t any more insistent that women stay out of the workforce; and so forth.
That’s all by way of ideological thicket-clearing. Presumably the next steps in the argument from here cut to the heart of the matter and show that only slavery and extermination of the indigenous population are of the right magnitude to explain why the West rose when it did. Pomeranz has also hinted that the Chinese government’s remonetizing silver when it did was well-timed with the Spanish government’s mining of silver in the New World; it prolonged foreign investment when that infrastructure was needed. And part of *that* story is an interesting one about how long-distance trade requires sophisticated banking: if your goods disappear long before you receive payment for them, and if that payment ultimately comes from someone thousands of miles away, you need some strong guarantees that you’ll get your money; these guarantees, in turn, probably require strong institutions that allow people to trust each other; and so on down the line. Presumably Pomeranz will show at some point that these institutions were just as strong in China (which has famously had a strong central government since well before the time of Christ) as they were in the West.
This scope of argument can often make me experience vertigo. You’re explaining the growth of an entire civilization, after all, even while you’re pulling in the very worst acts that we’ve ever perpetrated against other humans. Pomeranz doesn’t often let us get lost staring at the stars, because — bless him — he is off in the weeds. He has to be: if people are going to argue that there’s something vital in the bourgeois souls of white folk — something which allowed white people to rise to take the mantle of leadership over the benighted races — then there are probably just about two options:
1. Engage with this on its own vague level, pointing out that the Chinese *are so* good people; or
2. Try to find data that can concretely address these sorts of claims.
You probably can guess that I prefer 2. to 1., despite the paucity of the data. I’d rather believe a small number of things based on the little bits of truth that we can polish here and there, than believe a lot of transparently self-serving metaphysical bollocks about the superiority of white people. So when Pomeranz goes off in the weeds on these sorts of things, I think we’re obliged to follow him.
This is probably the third time I’ve tried to make my way through [book: The Great Divergence], though, because the weeds have — I admit — thrown me off in the past. I’m over that now; I find the book fascinating, because its eyes really are focused on the stars even while it’s digging in the dirt. If you bear that in mind while you’re reading Pomeranz, I think you’ll appreciate it as much as I now do.
Inspired, I think, by Marco Arment, I trebly back up my computers:
1. To a Time Capsule at home.
2. Via SuperDuper to an external hard drive that sits at work. (I couldn’t really tell you how this differs from just using dd(1), other than that it has a nice UI, only copies the diffs, and seemingly makes the external disk bootable. In any case, it’s great.)
3. In the cloud to Backblaze.
I have my laptop set to automatically back up to the cloud at all times, and my girlfriend’s laptop set to do the same. Then I use the Backblaze iPhone app to periodically ensure that all my backups are up to date. It’s awesome. The best backup is the one you never have to think about, and I definitely don’t have to think about this one.
…and if you decide to use Backblaze, too, I can get a cut. It’s great. I would never recommend a product I didn’t use enthusiastically, and I wholeheartedly recommend Backblaze.
(As it happens, I also wholeheartedly recommend my Time Capsule and SuperDuper, but they offer me no way to get filthy rich, like Backblaze does.)
This Matt Yglesias post (about a Houston-area day spa for babies [sic]) makes me wonder if the following has been formalized appropriately. Imagine some microeconomic decision like how large a house to buy. Some part of that decision will come from your actual desire to own a larger or smaller home. Some part will come from zoning (maybe you *can’t* buy a 1000-square-foot ranch-style home in the gated community). And some part will come from a pointless arms race between neighbors: I need to have a larger house than you, and you need to have a larger one than me, and so we proceed, more and more garishly.
That last motive is a collective-action problem: I don’t actually care *where* I end up, so long as I end up ahead of you; you, of course, think the same way. This is an arms race, in other words. During the Cold War, neither the Soviet Union nor the U.S. *wanted* to build up a nuclear arsenal; they were both forced to, because neither side could credibly commit to the other that it would disarm. So it is, I think, with housing. If there were some way to forcibly disarm both of us — if there were a single superpower, to continue the analogy, with a monopoly on violence that could bring both the Soviet Union *and* the United States to heel, well then the problem would be solved.
As it happens, we have such a superpower in the United States. It’s called the U.S. government, and it has a magical power called “taxation”. Imagine if we taxed the wealthy to such an extent that they no longer had the choice to participate in housing arms races and could only buy ordinary-sized homes. In some sense they might not mind this: if the point is to get ahead of your neighbor, and your neighbor is getting taxed at the same high level as you are, you’re both reasonably happy with the situation. Of course, you’d be happier if you both had more money, but by stipulation you were already forced to throw money into a zero-sum pursuit of larger homes; now you’re just forced to throw money to the federal government.
I don’t claim that wealthy people would raise no tantrums at all if they were forced to pay higher taxes, but I *do* wonder whether much consumption among the wealthy is fundamentally about this sort of wasteful arms race.
There’s probability ε, for some very small ε, that economists haven’t already run through this idea. … Indeed, a moment’s Googling suggests that I’m talking about a positional good; Veblen’s (“conspicuous consumption”) name comes up, as I should have expected. Time to read some Veblen.
What I’m looking for, though, is a formal estimate of how much economic waste goes into the pursuit of positional goods, and maybe a theory of optimal taxation based around it. I wonder if any of you lovely people have seen such a thing.
1. Savings accounts suck. I have an account with Capital One 360 (ne ING Direct), where the interest rate is uncommonly high at 0.75%. The inflation rate, for comparison’s sake, was 1.2% last year. So the *real* interest rate on that savings account is -0.45% per year. I.e., you’re losing money every month.
I realized the other day that it’s actually even worse: your interest is taxable. Suppose your marginal rate is 28%; that means your interest rate drops to (1-.28)*0.75% = 0.54% in nominal terms, or -0.66% in real terms.
2. Somehow the world allowed me to become an adult at some point, which is weird to me. In part because of the realization in 1., I looked around the other day for some basic index funds to put some savings in, while leaving enough in my savings account to cover about six months of expenses. [1] So I just opened up an account on Vanguard and transferred a significant sum of money into it … like I’m some kind of adult who’s capable of handling his own money. Frankly, I think the world got something horribly wrong here, but I won’t tell them.
3. When I created the Vanguard account, I told it to seed the account with money from my bank account. The withdrawal happened with no roadblocks at all. But in order for me to *withdraw* money from Vanguard into the bank account, I need to go through a verification step that involves the standard “deposit two small sums of money into your bank and confirm that you know what the amounts were” trick. Q: does this make any sense at all?
4. I’ve decided for now not to buy a single-family home. a) The housing market here is just insane, b) any number of calculators tell me I shouldn’t buy unless my rent is insane (which it’s not), and c) my partner’s and my geographic location in this world isn’t entirely static for the next few years. I still think the economics of a multi-family home are different, but I need to save up the downpayment on that for a while longer.
Not that anyone asked about my finances. But since I’m off Facebook and Twitter, this is what I’ve got.
[1] – Why an index fund? Because I’m not smart enough to do better than the market. Or if I’m smart enough, I’m too lazy. There are people who get paid many millions of dollars a year to pick stocks as their full-time jobs. It’s hard to believe that I am going to win against them. Granted, there are well-known anomalies. Last I knew, there were even some persistent patterns, owing to people’s reluctance to end a quarter with a loss and so forth, such that there’s predictable non-randomness all over the place. And maybe in time I will get un-lazy enough that I will build a portfolio for myself based around these anomalies. It’s still hard for me to believe that hedge funds and so forth wouldn’t have already exploited these, but you never know.
In the meantime, I follow Daniel Davies’ advice:
> As far as active investment goes, I always put it this way are you prepared to put as much time and effort into managing your investments as you would into running a small business? If you are then go for it playing the market is not a bad hobby, about as interesting as birdwatching or something. And most people on this list actually do have enough intelligence to beat the market and therefore to beat most active-managed funds, in my opinion. The trouble is of course that beating the market doesnt just require intelligence, it requires self-discipline, hard work and the ability to control your emotions. But in many ways so does success in bird-watching.
This book is a couple-thousand-word-long blog post that has, through laborious and painful editing, been stuffed into a couple-hundred-page-long book.
Boston has two busing stories, one famously terrible, the other successful and not famous. The first busing story is the one covered epochally well in Lukas’s [book: Common Ground], which is one of the few books that I think every American ought to read (the others are [book: The Making of the Atomic Bomb], Caro’s [book: The Power Broker], and Cronon’s [book: Nature’s Metropolis]). It is the “forced busing” story that everyone’s heard of, which tore apart Boston in the Seventies.
The other story is METCO, a voluntary program by which the parents of poor black students from inner-city Boston can choose to send their kids to white suburban schools. By all accounts that I’ve seen, it’s been a quiet success. There are many questions you could ask about it:
* How are the outcomes? Compared to their peers, how well do METCO students do later in life? How well do white people relate to black people after they’ve shared a class with them?
* Are the parents who send their kids to METCO systematically more involved in their kids’ education than the parents who don’t, so that the kids would be more likely to succeed than their peers even if they attended inner-city schools?
* Why has the program not expanded, if it’s been so successful?
* Has METCO helped or hindered the goal of merging urban and suburban school districts? Was that ever an option?
Eaton’s focus is not on any of these. Instead she repeats the same few points over and over:
* Black students often felt like they had lost their identities to METCO, with their friends back home thinking them too white for the neighborhood and their white schoolmates treating them as gangland curiosities (“Do you own a gun? How often do you see people being shot?”)
* Later in life, METCO students often found themselves able to walk the line between black and white people in the workplace; they were ambassadors, in a way that their colleagues who’d grown up with a segregated education were not.
* For all its difficulties, most METCO adults would go through the experience again, and most would put their kids through METCO. The few who really hated METCO did so because they felt it had destroyed their identity and left them rootless, or because white people just couldn’t get over their classmates’ blackness.
These are fine, interesting points. I would have liked them much more had they been in the hands of a different author. Or indeed, I would have liked them more had the author just stepped out of the way and added no narration to the lengthy interviews she’d conducted with 65 METCO adults. The interviewees were interesting enough on their own. Also, this just didn’t need to be a book; an academic paper would have been plenty.
Most of us, though, are primarily going to want to know other things about METCO, like how it functions as a program *as well as* how it changes the racial identities of its participants. That is indeed why I found this book to begin with: it was cited in Gerald Grant’s book, as though Eaton’s book had something to say about METCO as a whole. Sadly for me, it doesn’t. Perhaps your interest is much more about racial identity than mine was; if so, Eaton’s book may be for you.
The Tempest at the American Repertory Theater. Music by Tom Waits. Dance by Pilobolus. Magic by Teller of Penn and Teller. It’s all so elegantly and fluidly combined that it seems perfectly natural for all of these things to exist cheek by jowl. Ariel lazily makes card decks disappear. A Greek chorus performing Waits’s “Dirt in the Ground” couldn’t be more natural. Caliban is performed here by two dancers practically lashed to one another, twirling across the stage and always just a few degrees from the vertical; indeed, they’re always unstably in motion. Prospero, by contrast, is all economy of motion, upright and stern throughout. I couldn’t breathe whenever he uttered a word.
The play was by turns funny and unspeakably moving, jaw-dropping and toe-tapping. Waits’s music and Teller’s magic couldn’t be a better fit for The Tempest‘s playful, mythological island fantasy.
If you’re in the Boston area, you need to find some way to get into The Tempest during its run. If there’s any justice in the world, it’ll soon move to Broadway, and you’ll be able to catch it there.
Boston cab drivers spent May 22nd protesting, rather than making their service better. I’ve taken a lot of cabs here in my time, and the story is the same every time: Rude drivers. Crazy drivers. Unsafe drivers. Drivers with gross, unclean cars. Drivers whose credit-card machines mysteriously stop working right when you need them to work. Drivers who won’t take you from Boston to Cambridge, or vice versa, out of the legitimate fear that they’ll have to deadhead (i.e., that when they take someone from Boston to Cambridge, they can’t then pick someone up in Cambridge and return them to Boston, because Boston cab laws are stupid).
I’m no expert, but this system doesn’t seem to benefit the cabbies. Medallions, 20% of which are in the hands of a single company (Boston Cab) cost $625,000. It’s a giant scam benefiting only a few people.
Uber, on the other hand, has been almost unfailingly great. I’ve taken both the black cars and the cheaper UberX; under the latter scheme, Joe Schmoe can pick you up in his ordinary car, provided it passes certain tests: it has to be reasonably new, and apparently Uber gets on the drivers about keeping their cars in shape or getting new ones. And apparently the company has very low tolerance for poor drivers. Tonight I had my first unsatisfactory experience with an UberX or black-car driver; within a few minutes of submitting the review, I’d received a personal, apologetic email from Uber, assuring me that they’d contact the driver and tell him to clean up his act. Otherwise the batting average has been 1.000.
Markets don’t always work. But in this case we have every reason to believe that they will: there’s a nimble entrant up against an underperforming monopolist. Let Uber continue to be Uber, and maybe cab companies will get it together. Or maybe they won’t, in which case the Boston cab industry should go away.
I have this hypothesis about works labeled ‘classics’; the hypothesis is that the only parts of ‘classic’ works that anyone bothers to quote are those from the beginning of the works, and that the reason for this is that that’s as far as most people read.
So it is with Schumpeter. All anyone ever quotes is the thing about ‘creative destruction’, which is indeed important, but which Schumpeter is done discussing by 1/3 of the way through [book: Capitalism, Socialism and Democracy]. So because I am expected to talk about creative destruction, even though it is not actually all that important to the book, I am now going to talk about creative destruction.
The real risk to corporations in a dynamic capitalist economy, says Schumpeter, is not that someone will come along and make the same product as they do, only cheaper. The real risk is that someone will come along and invent something that makes their entire business model irrelevant. Think the Internet displacing newspapers; think, indeed, of people who spent their entire lives training to work at printing presses and now find themselves in their fifties without skills that anyone is willing to pay for. Or think of record stores in the face of MP3s. Or think of train conductors in the era of the personal motorcar. Or think of secretaries in the era of Microsoft Word.
So that’s the bit about creative destruction that everyone bothers to discuss. Where they don’t go from there is where Schumpeter goes, namely to pointing out that in a world that is being creatively destroyed, much of economics is studying the wrong things and understanding the world in the wrong way. We need to stop thinking about a static world, where we have a static problem in front of us and entrepreneurs are expected to solve that static problem with a static solution. For instance, the problem isn’t just “how do I maximize my profit on widgets, given this set of competitors before me who are all trying to make the same widget, only cheaper?” The problem is “how do I fight off this set of competitors, and prepare for the possibility that my entire industry will be wiped out in 10 years?” As Schumpeter notes, this new framing makes “monopoly” look a lot less menacing than a static analysis alone would imply: the monopolist may just be saving money in preparation for being creatively destroyed.
Or the monopolist may not! It may just be good old-fashioned evil monopoly. But the point is that our entire mode of analysis has to get out of a static frame into a dynamic one, and that the dynamic frame is a lot more complicated than the static one.
Maybe 20 pages after the discussion of creative destruction, Schumpeter notes that capitalism won’t survive. And he spends the remainder of the book defending that point. The reader might spend a moment pondering why the latter argument gets less play from the likes of Thomas Friedman than do the creative-destruction parts.
Schumpeter’s reasons for believing that capitalism won’t survive look fairly questionable these days. First, he says that bourgeois rationality — the habit of rationally calculating costs and benefits for everything, in all spheres of life — inevitably removes the heroic, innovative potential from capitalism. Bourgeois capitalism inevitably leads to big business (here Schumpeter and Marx would agree), and big business trains us all to effectively be good little managers, counting our dollars and cents. This eventually works its way into our personal lives: in 1942, Schumpeter expected that fewer people would choose to have kids as their bourgeois worlds narrowed, and as child-rearing thereby became yet another institution subject to cost-benefit analysis. The scope for heroic capitalism would fade away under capitalism’s own tendencies. Not only that, but the decrease in the number of children would lead people to plan less for the future, which again would weaken one of capitalism’s motive pillars.
The outcome — capitalism destroying itself from within — agrees with Marx, to the extent that I understand Marx, but the mechanism is a little different: while Marx believed that increasing scale would lead to bigger and bigger business, with workers being repeatedly thrown out of work as machines replaced them, Schumpeter argues that capitalism as a cultural force would undermine the very creative-destructive underpinnings of capitalism. The system’s internal contradictions, in both cases, would cause it to burn out, but in the Schumpeterian world there is no reserve army of the unemployed to rise up and expropriate the expropriators; there’s just a slow exhaustion from within.
Secondly, there’s the New Deal. Schumpeter is annoyingly loath to criticize specific policies or specific people for at least the first 2/3 of [book: Capitalism, Socialism and Democracy], but it’s fairly clear even before he turns explicit that he’s annoyed with Depression-era economic policies. Again, Schumpeter believes that the New Deal and friends are the self-contradictions of capitalism weakening it from within. Capitalism, he says, creates a class of out-of-work intellectuals who profit on critiquing the capitalist order. When I read this, I confess to you that I raised my left eyebrow in an “oh, come on” sort of way: this does seem to massively overstate the importance of intellectuals. In any case, if you hand-wave over the middle part of the argument, it goes like this: capitalism creates this critical caste of workers, who then somehow work their ideas into the corridors of power, thereby creating the New Deal and friends, thereby sapping capitalism of its vital powers, thereby (again) weakening it and eventually ending it.
This all seems awfully wrong in retrospect. I’d like to have the historical imagination to put myself back in Schumpeter’s shoes. Whatever the context around his thoughts was, he seems like very much an iconoclast. He was pretty clearly anti-Keynesian, anti-New Deal, and so forth. And he was maybe socialist, but maybe not; he’s reluctant throughout the book to tell us what he really feels, instead suggesting that all he’s doing is mapping out the world that would result if present trends stayed the course. He might well be a socialist, but if nothing else he understands his Marx. And he certainly understands why people are socialist; in this, you might say that he echoes Corey Robin: socialists aim to convert hysterical misery into ordinary unhappiness.
I would have liked Schumpeter to have expanded upon the analysis of capitalism’s social effects. In the full scope of his argument, the social analysis is mostly there as a building block toward the larger analysis of capitalism’s future. He’s less concerned about the effects that capitalism has, for instance, on the family as an institution. The family itself is just a building block toward the larger structure. This is unfortunate, because his analysis of capitalism’s social effects seems far and away the most prescient.
There’s much else that I can’t get into here, including a fine synopsis of Marxist thought and an analysis of what democracy actually is. Actually, maybe I’ll spend a moment on the latter. Schumpeter wants to know what democracy really is. In some vague sense, we would probably all say that it’s a system under which “the people [in some sense] rule [in some sense]”. Schumpeter picks this apart. What do we mean by “the people”? We can’t mean that democracy is a system under which every citizen has the right to vote: the modern U.S. won’t allow those under 18 to vote, and we’re clearly a democracy; the U.S. didn’t allow women to vote until the 20th century, and we were clearly a democracy then, too; Germany was a democracy in some sense when Hitler rose to power; etc. After quite a bit of arguing along similar lines, Schumpeter defines democracy as a system in which leaders compete in the market for power. … Here I’ve only sketched a few pages of argument, which Schumpeter then uses as the groundwork for still more analysis of whether socialism or democracy ought to give way when they come in conflict.
It’s intensely thoughtful and intricate, and I’ve not even unpacked half of it yet. The only critique I’d make is that the writing style seems to come from someone who spoke German natively; I lost the thread of many sentences by the time I reached the end. But it’s worth it, because Schumpeter is unorthodox and brilliant. Well worth your time and thought.
Steve Reads 