J. Bradford DeLong's Blog, page 74

Scott Alexander: A Very Unlikely Chess Game https://slate...

Scott Alexander: A Very Unlikely Chess Game https://slatestarcodex.com/2020/01/06/a-very-unlikely-chess-game/: 'Almost 25 years after Kasparov vs. Deep Blue, another seminal man vs. machine matchup. Neither competitor has much to be proud of here. White has a poor opening. Black screws up and loses his queen for no reason. A few moves later, white screws up and loses his rook for no reason. Better players will no doubt spot other humiliating mistakes. But white does eventually eke out a victory. And black does hold his own through most of the game. White is me. My excuse is that I only play chess once every couple of years, plus I���m entering moves on an ASCII board I can barely read. Black is GPT-2. Its excuse is that it���s a text prediction program with no concept of chess. As far as it knows, it���s trying to predict short alphanumeric strings like ���e2e4��� or ���Nb7���. Nobody told it this represents a board game. It doesn���t even have a concept of 2D space that it could use to understand such a claim. But it still captured my rook! Embarrassing!...

#noted #2020-01-13

Note to Self: The Two Faces of Jean-Baptiste Say... https...

Note to Self: The Two Faces of Jean-Baptiste Say... https://www.bradford-delong.com/2010/04/the-two-faces-of-jean-baptiste-say.html: Say I (1803): A Treatise on Political Economy Book I, Chapter XV:

To say that sales are dull, owing to the scarcity of money, is to mistake the means for the cause; an error that proceeds from the circumstance, that almost all produce is in the first instance exchanged for money, before it is ultimately converted into other produce: and the commodity, which recurs so repeatedly in use, appears to vulgar apprehensions the most important of commodities, and the end and object of all transactions, whereas it is only the medium. Sales cannot be said to be dull because money is scarce, but because other products are so. There is always money enough to conduct the circulation and mutual interchange of other values, when those values really exist. Should the increase of traffic require more money to facilitate it, the want is easily supplied, and is a strong indication of prosperity���a proof that a great abundance of values has been created, which it is wished to exchange for other values. In such cases, merchants know well enough how to find substitutes for the product serving as the medium of exchange or money...

 

Say II (1829): Cours Complet d'Economie Politique Pratique:

The Bank [of England], legally obliged to redeem its banknotes in specie, regarded itself as obliged to buy gold back at any price, and to coin money at a loss and at considerable expense. To limit its losses, it forced the return of its banknotes, and ceased to put new notes into circulation. It was then obliged to cease to discount commercial bills. Provincial banks were in consequence obliged to follow the same course, and commerce found itself deprived at a stroke of the advances on which it had counted, be it to create new businesses, or to give a lease of life to the old. As the bills that businessmen had discounted came to maturity, they were obliged to meet them, and finding no more advances from the bankers, each was forced to use up all the resources at his disposal. They sold goods for half what they had cost. Business assets could not be sold at any price. As every type of merchandise had sunk below its costs of production, a multitude of workers were without work. Many bankruptcies were declared among merchants and among bankers, who having placed more bills in circulation than their personal wealth could cover, could no longer find guarantees to cover their issues beyond the undertakings of individuals, many of whom had themselves become bankrupt...

#historyofeconomicthought macro #notetoself #2020-01-11

Andrew Bacevich: Trump's Iranian General Killing Same Old...

Andrew Bacevich: Trump's Iranian General Killing Same Old Losing Mideast Game Plan https://www.latimes.com/opinion/story/2020-01-03/qassem-suleimani-donald-trump-iran-drone-assassination: '���The game has changed.��� So announced Secretary of Defense Mark Esper in warning that the Trump administration would take preemptive action to prevent further attacks on American personnel and facilities in Iraq. The killing of Gen. Qassem Suleimani, commander of the Iranian Quds Force, by U.S. drone strikes at Baghdad���s international airport shows that Esper is as good as his word. Yet, except in a nominal sense of enlarging the target set, the game remains unchanged, even if violence escalates further in the days ahead. It���s a game that the United States has been playing ��� and losing ��� for close to a generation. The purported objective of the game, which dates to the enunciation of the Carter Doctrine way back in 1979, is this: the use or threatened use of U.S. military might to impose order on the Persian Gulf and its environs. Ideally, that order would include respect for the values that Americans profess to cherish, among them democracy and regard for human rights. Minimally, it would permit the free flow of gulf oil to nations that rely on it to fuel their economies (our own not among them, given recent increases in U.S. domestic oil and gas production). Yet since 9/11, U.S. military exertions in the region have destroyed what little order once existed there. In place of order, today there is anarchy: civil wars, failed states and terrorist organizations that did not even exist when the American ���Global War on Terrorism��� commenced nearly two decades ago...

#noted #2020-01-10

Comment of the Day: Howard https://www.bradford-delong.co...

Comment of the Day: Howard https://www.bradford-delong.com/2019/12/the-policy-debate-europe-needs-by-barry-eichengreen-project-syndicate.html?cid=6a00e551f0800388340240a4af592b200c#comment-6a00e551f0800388340240a4af592b200c: 'Honest to goodness, did none of these moronic European policy makers ever study the rise of fascism in Germany? Did they not notice that it wasn't inflation, it was austerity that paved the way? wWat could possibly justify this stubborn stupidity?...

#commentoftheday #2020-01-10

muqaddimah

Ibn Khaldun: Muqaddimah: "At the beginning, dynasties maintain the Bedouin attitude, as we have stated 652 Therefore, they have few needs, since luxury and the habits that go with it do not (yet) exist. Expenses and expenditures are small. At that time, revenue from taxes pays for much more than the necessary expenditures, and there is a large surplus. The dynasty, then, soon starts to adopt the luxury and luxury customs of sedentary culture, and follows the course that had been taken by previous dynasties. The result is that the expenses of the people of the dynasty grow. Especially do the expenses of the ruler mount excessively, on account of his expenditures for his entourage and the great number of allowances he has to grant. The (available) revenue from taxes cannot pay for all that. Therefore, the dynasty must increase its revenues, because the militia needs (ever) larger allowances and the ruler needs (ever) more money to meet his expenditures. At first, the amounts of individual imposts and assessments are increased, as we have stated. Then, as expenses and needs increase under the influence of the gradual growth of luxury customs and additional allowances for the militia, the dynasty is affected by senility. Its people are too weak to collect the taxes from the provinces and remote areas. Thus, the revenue from taxes decreases, while the habits (requiring money) increase. As they increase, salaries and allowances to the soldiers also increase. Therefore, the ruler must invent new kinds of taxes. He levies them on commerce. He imposes taxes of a certain amount on prices realized in the markets and on the various (imported) goods at the city gates. 653a (The ruler) is, after all, forced to this because people have become spoiled by generous allowances, and because of the growing numbers of soldiers and militiamen. In the later (years) of the dynasty, (taxation) may become excessive. Business falls off, because all hopes (of profit) are destroyed, permitting the dissolution of civilization and reflecting upon (the status of) the dynasty. This (situation) becomes more and more aggravated, until (the dynasty) disintegrates...

#noted #2020-01-10

Weekend Reading: From Robert Harris (2015): Dictator

Weekend Reading: Robert Harris (2015): Dictator https://isbn.nu/9780307948137: 'On the flatter ground at the top of the slope Cornutus had drawn up four cohorts���almost two thousand men. They stood in lines in the heat. The light on their helmets dazzled as brightly as the sun, and I had to shield my eyes. When Cicero stepped out of his litter there was absolute silence. Cornutus conducted him to a low platform beside an altar. A sheep was sacrificed. Its guts were pulled out and examined by the haruspices and declared propitious: ���There is no doubt of ultimate victory.��� The crows circled overhead. A priest read a prayer. Then Cicero spoke. I cannot remember exactly what he said. All the usual words were there���liberty, ancestors, hearths and altars, laws and temples���but for once I listened without hearing. I was looking at the faces of the legionaries...

...They were sunburnt, lean, impassive. Some were chewing mastic. I saw the scene through their eyes. They had been recruited by Caesar to fight against King Juba and the army of Cato. They had slaughtered thousands and had been stuck in Africa ever since. They had travelled hundreds of miles crammed together in boats. They had been force-marched for a day. Now they were lined up in the heat in Rome and an old man was talking at them about liberty, ancestors, hearths and altars���and it meant nothing.

Cicero finished speaking. There was silence. Cornutus ordered them to give three cheers. The silence continued. Cicero stepped off the platform and got back into his litter and we returned down the hill, past the saucer-eyed starving children.

Cornutus came to see Cicero the following morning and told him that the African legions had mutinied overnight. It seemed that Octavian���s men had crept back from the countryside in the darkness, infiltrated the camps and promised the soldiers twice as much money as the Senate could afford to pay them. Meanwhile Octavian���s main army was reported to be moving south along the Via Flaminia and was barely a day���s march away. ���What will you do now?��� Cicero asked him. ���Kill myself,��� came the reply, and he did, that same evening, pressing the tip of his sword to his stomach and falling upon it heavily rather than surrender. He was an honourable man and deserves to be remembered, not least because he was the only member of the Senate who took that course.

When Octavian was close to the city, most of the leading patricians went out to meet him on the road to escort him into Rome. Cicero sat in his study with the shutters closed. The air was so close it was hard to breathe. I looked in from time to time but he did not seem to have moved. His noble head, staring straight ahead and silhouetted against the faint light from the window, was like a marble bust in a deserted temple. Finally he noticed me and asked where Octavian had set up his headquarters. I replied that he had moved into the home of his mother and stepfather on the Quirinal. ���Perhaps you could send a message to Philippus and ask him what he suggests I should do.��� I did as he requested and the courier returned with a scrawled reply that Cicero ought to go and talk to Octavian: ���You will find him, I am sure, as I did, disposed to mercy.��� Wearily Cicero got to his feet.

The big house, usually thronged with visitors, was empty. It felt as if no one had lived in it for a long time. In the late summer afternoon sun the silent public rooms glowed as if made of gold and amber. We went together, in a pair of litters accompanied by a small escort, to the house of Philippus. Sentries guarded the street and the front door but they must have been given orders to let Cicero through, for they parted at once. As we crossed the threshold, Isauricus was just leaving. I had expected him, as Octavian���s future father-in-law, to give Cicero a smile of condescension or of triumph; instead he scowled at him and hurried past us.

Through the heavy open door we could see Octavian standing in a corner of the tablinum dictating a letter to a secretary. He beckoned to us to enter. He seemed in no hurry to finish. He was wearing a simple military tunic. His body armour, helmet and sword lay scattered on a couch where he had flung them. He looked like a young recruit.

Finally he ended his dictation and sent the secretary away. He scrutinised Cicero in an amused way that reminded me of his adopted father. ���You are the last of my friends to greet me.���

���Well, I imagined you would be busy.���

���Ah, is that it?��� Octavian laughed, revealing those terrible teeth of his. ���I was presuming that you disapproved of my actions.���

Cicero shrugged. ���The world is as it is. I have given up the habit of approving and disapproving. What���s the point? Men do as they please, whatever I think.���

���So what is it you want to do? Do you want to be consul?���

For the merest fraction of a moment Cicero���s face seemed to flood with pleasure and relief, but then he understood that Octavian was joking and immediately the light went out of it again. He grunted, ���Now you���re toying with me.���

���I am. Forgive me. My colleague as consul will be Quintus Pedius, an obscure relative of mine of whom you will never have heard, which is the whole point of him.���

���So not Isauricus?���

���No. There seems to have been some misunderstanding there. I shan���t be marrying his daughter either. I shall spend some time here settling matters and then I must go and confront Antony and Lepidus. You can leave Rome too if you like.���

���I can?���

���Yes, you can leave Rome. You can write philosophy. You can go anywhere you please in Italy. However, you cannot return to Rome in my absence, nor can you attend the Senate. You cannot write your memoirs or anything political. You cannot leave the country and go to Brutus or Cassius. Is that acceptable? Will you give me your word? I can assure you my men would not be so generous.���

Cicero bowed his head. ���It is generous. It is acceptable. I give you my word. Thank you.���

���In return I will guarantee your safety, in recognition of our past friendship.��� He picked up a letter to signal that the audience was at an end. ���One last thing,��� he said as Cicero turned to leave. ���It makes no difference, but I would like to know: was it a joke, or would you really have erased me?���

���I believe I would have done exactly the same as you are doing now,��� replied Cicero...

#books #history #noted #2020-01-10

Scott Lemieux: "Designed by Clowns... Supervised by Monke...

Scott Lemieux: "Designed by Clowns... Supervised by Monkeys": Boeing and Finance Bro Culture http://www.lawyersgunsmoneyblog.com/2020/01/designed-by-clowns-supervised-by-monkeys-boeing-and-finance-bro-culture: 'The 737 MAX was poorly designed, Boeing cut as many corners as it could in conducting training, and employees viewed foreign pilots and regulators with contempt. Upwards of 400 dead people were the result: "Boeing released more than a hundred pages of documents to Congress on Thursday detailing internal messages that reveal how, during certification of the 737 MAX, company employees spoke of deceiving international air safety regulators and Boeing���s airline customers, and successfully fought off moves over several years to require anything but minimal pilot training for the new airplane. The documents also confirm that Boeing rejected a proposed system safety upgrade to the MAX on the grounds that doing so would add cost by triggering a need for all pilots to have flight-simulator training to qualify to fly the MAX. Just this week, Boeing finally relented and is now recommending��flight-simulator training for all pilots before the MAX returns to service. The documents also suggest that Boeing���s development of the simulators, working in Miami, Singapore, London and Shanghai with a new equipment supplier called TRU, was plagued with all sorts of technical problems. And they show that��Boeing planned to carefully present the new flight control software on the MAX that went haywire during the two crashes���the Maneuvering Characteristics Augmentation System (MCAS)���as simply an extension of an existing system so as to avoid increased certification and pilot training impact. The documents include derogatory references to the Federal Aviation Administration (FAA) and foreign regulators, to simulator supplier TRU, and to airline customers. 'This airplane is designed by clowns, who are in turn supervised by monkeys', one Boeing pilot wrote to another in a 2017 exchange. Boeing issued a profuse apology as it released the documents and promised to take disciplinary action against individuals involved." The whole thing is worth reading. Natasha Frost has another good story rooting the story in Boeing���s merger with McDonnell Douglas, which transformed Boeing���s more experimental, engineering driven corporate culture into one focused on short-term profits and share prices...

#noted #2020-01-10

Reading Notes on Dasgupta's "Economics: A Very Short Introduction"

why would one want to think like an economist? What is thinking like an economist���rather than like a sociologist (looking for the webs of human connections and common belief), a political scientist (looking at power and at authority both given and taken), or a historian (looking at origins and development)? One wants to think like an economist because it is an especially useful way of thinking about the economy. What, then, is the economy? And why is ���thinking like an economist������marginal, interdependence, benefit-cost, and opportunity cost calculations���a good way of understanding it?

Partha Dasgupta provides the best short answer to those two linked questions, and in the process of doing so provides the best introduction to economics, that I have seen

https://www.icloud.com/pages/0CLYIvKyZgxnRUMDgkL7RyWZQ

https://www.icloud.com/keynote/0hD8Le6gFIjTAwOWnBGv8PF5A

Partha Dasgupta: Economics: A Very Short Introduction https://delong.typepad.com/files/dasgupta-economics.pdf

#berkeley #books #economics #highlighted #teachingeconomics #2020-01-06


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Laura Tyson & Lenny Mendonca: Making Stakeholder Capitali...

Laura Tyson & Lenny Mendonca: Making Stakeholder Capitalism a Reality https://www.project-syndicate.org/commentary/making-stakeholder-capitalism-reality-by-laura-tyson-and-lenny-mendonca-2020-01: 'The recent push by big business in favor of a more socially and environmentally conscious corporate-governance model is not just empty rhetoric. With the public losing trust in business and markets, it is now in everyone's interest to reform the system so that it delivers prosperity for the many, rather than the few.... While some skepticism is justified, there are already promising signs that a change in corporate behavior is coming. Both the WEF and the Business Roundtable have begun to develop blueprints for implementing stakeholder capitalism.
Ultimately, long-term self-interest will drive corporate commitments. Customers are the engine of top-line revenue growth, and have always been recognized as essential business stakeholders. As more consumers have begun to seek out ���green��� goods and services, for example, companies have started investing in new growth opportunities geared toward sustainability. Skilled employees are also essential corporate stakeholders, and with labor markets so tight, they are demanding fair compensation and benefits as well as upskilling and reskilling opportunities...

#noted #2020-01-07

Reading Notes on Book I of Aristotle's "Politics"

Let me remind you about Aristoteles son of Nikomachos of Stagira:

He lived from -384 to -322, in the Greek-speaking communities around the Aegean Sea. He spent most of his time in Athens. For the two millennia following his death, he would be, for a large chunk of the world, THE Philosopher: capital ���P��� and capital ���THE���. 1650 years after his death, poet Dante Alighieri would call him ���the Master��� of those who know���, ���il Maestro di color che sanno���. Aristotle���s was, even at so long a distance in time, the most powerful intellectual name that one could conjure with...

https://www.icloud.com/pages/0nLIYWAFXAkPWR0xug-NT21vg

https://www.icloud.com/keynote/0SKox_f6G3cEvDxV-biXLgcPA

Aristotle: Politics, Book I https://delong.typepad.com/files/aristotle-politics-book-i.pdf

#ancienteconomy #berkeley #books #economicgrowth #economichistory #highlighted #teachinggrowth #teachinghistory #2020-01-06


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