Tyler Cowen's Blog, page 170

China fact of the day

China, once the manual labour “workshop of the world”, has become the largest buyer of industrial robots, as rising wage costs and growing competition from emerging economies have forced manufacturers to turn to technology.

The country bought one in five robots sold globally in 2013, overtaking tech-savvy Japan for the first time, in its attempt to drive productivity gains.

…“China has the fastest-growing robot market. In a few years time China will be significantly larger than the second and third largest robot market,” said Per Vegard Nerseth, head of robotics for ABB.

There is more here, from the FT.

The Authors Alliance vs. The Authors Guild

I am a founding member of the Authors Alliance.

[The Alliance represents] authors who create to be read, to be seen, and to be heard. We believe that these authors have not been well served by misguided efforts to strengthen copyright. These efforts have failed to provide meaningful financial returns to most authors, while instead unacceptably compromising  the preservation of our own intellectual legacies and our ability to tap our collective cultural heritage. We want to harness the potential of global digital networks to share knowledge and products of the imagination as broadly as possible. We aim to amplify the voices of authors and creators in all media who write and create not only for pay, but above all to make their discoveries, ideas, and creations accessible to the broadest possible audience.

The Authors Guild (a nice medieval name) isn’t happy with the Alliance. Board member T.J. Stiles warns writers not to join the Alliance which he says is for academics and hobbyists and not for real authors like himself. I could reply but let me turn it over to full time professional writer and editor Virginia Postrel:

…the guild has for years actively undermined my interests while claiming in federal court to speak in my name. It channels commercial authors’ understandable anxieties about piracy threats and increasing competition into unjustified attacks on institutions and practices, such as fair use and computer indexing, that help us create new works and promote existing ones. It feeds authors’ fears while working to make it harder to write and sell books.

…In his blog post, Stiles invoked “people who copy and distribute your work without your permission.” You might assume he was talking about plagiarists and pirates. But what he really meant was the scanning, search and snippets offered by Google Books, or the digital preservation and indexing provided by the nonprofit HathiTrust. The Authors Guild has been fighting these projects in court. It claims that scanning books in order to make them searchable constitutes a copyright violation, even if the only thing shared with the public is a tiny bit of text (Google) or the page numbers on which a search term appears (HathiTrust)….

Last November, U.S. Circuit Judge Denny Chin dismissed the Authors Guild suit against Google. His ruling emphatically affirmed the “significant public benefits” of Google Books — including the benefits for authors and publishers — and declared the service easily within the legal definition of fair use. The Authors Guild said it would appeal the ruling. It is also appealing a 2012 circuit court ruling against it in the HathiTrust suit.

If the Authors Guild fears losing its members it has no one to blame but itself for supporting these ridiculous and counter-productive lawsuits.

Women, wealth, and mobility

Lena Edlund and Wojciech Kopczuk have an AER paper from 2009, the abstract is this:

Using estate tax returns data, we observe that the share of women among the very wealthy in the United States peaked in the late 1960s at nearly one-half and then declined to one-third. We argue that this pattern reflects changes in the importance of dynastic wealth, with the share of women proxying for inherited wealth. If so, wealth mobility decreased until the 1970s and rose thereafter. Such an interpretation is consistent with technological change driving long-term trends in mobility and inequality, as well as the recent divergence between top wealth and top income shares documented elsewhere.

The article is ungated here (pdf).  Perhaps this is relevant to some current debates…?

Assorted links

1. Good charts and graphs about U.S. energy history.

2. Scott Sumner on Piketty on Kuznets, and Scott on the first chapter of Piketty.

3. ? (speculative)  The original paper is here.

4. A very optimistic view on the unemployment rate.

5. How loyal was the Chinese army? (significant)

6. David Brooks on Adam Phillips.

7. Benjamin Hermalin responds to my earlier discussion of his paper.  The original page for the paper is here.

A company just appointed an algorithm to its board

A Hong Kong VC fund has just appointed an algorithm to its board.

Deep Knowledge Ventures, a firm that focuses on age-related disease drugs and regenerative medicine projects, says the program, called VITAL, can make investment recommendations about life sciences firms by poring over large amounts of data.

Just like other members of the board, the algorithm gets to vote on whether the firm makes an investment in a specific company or not. The program will be the sixth member of DKV’s board.

There is more , via Gabriel Puliatti.

Why am I reminded of The Clean Air Act of 1963?

Here is one very brief history:

Each state was given primary responsibility for assuring that emissions sources from within their borders are consistent with the levels designated by the NAAQS. In order to achieve these goals, each state is required to submit a State Implementation Plan (SIP) to the EPA to ensure the implementation of primary and secondary air quality standards…Since many states failed to meet mandated air quality standards first set by the Clean Air Act, Congress created the 1977 amendments to aid states in achieving their original goals.

That is just one bit of course.  More broadly, people focus on The Clean Air Act of 1970, but of course the original legislation was from 1963 and it was extremely ineffective because it had inadequate popular support and the issue was not yet a major concern.  It had to be revised/amended in 1965 and 1967 and 1970 and then also 1977 and 1990.  Yet the 1963 act did set definite standards for stationary (but not mobile) pollution sources and mandated a timetable for adoption, albeit with a lot of state flexibility for meeting the new standards.  All of that went nowhere.  And that was an act passed directly by Congress, not just an Executive Order.  Even in those days, a lot of actual progress in the fight against air pollution came through the replacement of dirty coal by natural gas, a process which had started in the 1920s and spread through America in successive waves.

Here is a typical paragraph about early policy ineffectiveness, from a useful essay:

By 1970, it was “abundantly clear” to Congress that federal legislative efforts to fight air pollution were inadequate. State planning and implementation under the 1967 Act had made little progress.Congress attributed this “regrettably slow” progress to a number of other factors including the “cumbersome and time-consuming procedures” in the 1967 Act, inadequate funding at the federal, state, and local levels, and the lack of skilled personnel to enforce pollution requirements. Commentators have also suggested that federal legislation prior to 1970 failed because of both an inability and an unwillingness on the part of the states to deal with air pollution.

When I read about the new Obama plan, I am reminded of 1963, and also 1965 and 1967.  For all of the hullaballoo you are hearing — whether positive or negative — keep this in mind.

Addendum: Most of the best sources on the 1963 Act are off-line.  But here is an interesting essay about some of the federalistic issues behind the enforcement of the various Clean Air Acts, mostly post-1963.  Here is the text of the 1963 law, for one thing it is amazing how short it is.

From the comments, on Scottish independence

In response to my original post, Alex Buchanan writes:

Where to start? As a Scot living in Scotland and very much intending to vote YES I have to take issue on many things stated here. First of all your emphasis on the term “partnership”. There has never been a partnership between England and Scotland, Scotland has always been told what to do and if Scotland doesn’t like it Scotland has to lump it. We are more socially aware of our society with a more caring emphasis on what is good for OUR nation, Scotland, as a whole, not the dog eat dog right wing politics of England which is more of a right wing society. See Tory and ukip voting patterns. As for the currency we will be using? It will be sterling! Sterling does not just belong to England and if we’re in a currency union or not, we will still use sterling just like many other former commonwealth countries did before. The matter of us being in the EU is still debatable. Many EU institutions have intimated that Scotland will be welcome with open arms and even some unionist politicians have said we will have no problems joining. Ask your Westminster government they can get the answers. By the way I don’t think it has escaped your notice that we are already dominated by the EU and Westminster to boot. So what’s new? We can cut out the middle man whose sole interest is to look after London first. We are also getting an in-out referendum on membership of the EU in 2017. Can you tell me if we’ll still be in the EU after that? Tell me Tyler? What is the mechanism for evicting an already member of the EU? I don’t think there is one.

You cite that we have no practical reason to leave. Well how about self determination? How about being able to take decisions for ourselves? How about not going into useless wars? How about not having nuclear weapons, that England won’t have, located on our doorstep? Or how about having our wealth squandered on the South East of England while we are accused of being subsidy junkies? Are they practical reasons?

Alex Salmond has sound economics to back up his claim of Scots receiving more money under Independence. UK government records show that we contribute 9.9% (no doubt massaged down) of the exchequer’s total income, but we receive back only 9.3% back in total spend. Whereas the latest treasury figures were disowned straight away by the professor who they used as a source for their findings. The professor said that they had misrepresented his figures by a factor of 12 times more.

No being British is not good enough. I see day-in-day-out my country being turned into a region, a region of Britain you may say, but when in reality we all know what Britain means to the people down in England, don’t we? Britain simply means England in most people’s eyes in England. If you looked at the latest census carried out in Scotland you would have seen that nearly 75% of the population consider themselves Scottish and not British, only a mere 18% considered themselves Scottish and British. If it’s any consolation to you I can’t understand many English dialects either. Try listening to a Geordie, Scouser, Brommie, Cockney or even someone from Pashtun.

I expect the YES vote to prevail and I just want to point out to you that ignorant articles like this will hasten that vote.

He is an articulate fellow, but he hasn’t changed my mind, quite the contrary.

Very good sentences

From Ross Douthat:

…the feminist prescription doesn’t supply what men slipping down into the darkness of misogyny most immediately need: not lectures on how they need to respect women as sexual beings, but reasons, despite their lack of sexual experience, to first respect themselves as men.

And also:

…our society has lost sight of a basic human truth: A culture that too tightly binds sex and self-respect is likely, in the long run, to end up with less and less of both.

Excerpt from Alice Goffman’s *On the Run*

From The New York Times:

We have begun to pay attention to the harmful effects that America’s extremely high levels of incarceration have on former prisoners and their families, particularly in African-American neighborhoods, but we’re still missing part of the story. Our get-tough turn didn’t just send millions of young men to prison and return them home with felony convictions. It expanded the scope of policing and court supervision in poor neighborhoods, radically altering the way life is lived there.

My column on her book is here.  Here is a good profile of Alice Goffman, recommended.

Assorted links

1. How to earn money trolling dating sites for hot, thin white women (those new service sector jobs).

2. What are the most edited Wikipedia articles?  And a critique of the internet.

3. Immortal soccer fans.

4. A chess grandmaster examines Piketty’s claim about rates of return.  And Krugman on where the Piketty debate is at now.

5. Stephen Williamson is moving full-time to the St. Louis Fed…and will continue blogging.

6. The influence of economists on merger reviews.