Tyler Cowen's Blog, page 38

Assorted links

1. Modeling economic civil war and protection in Somalia, and why Islam has an advantage.

2. Witches of Chiloé.  And the price of condoms in Venezuela.  Real world development indicators.

3. Greek debt/eurozone rap video, best is Merkel.

4. Why it is better to read on paper.  And there is no great beehive stagnation.

5. The values of different Nobel Prizes, market price data.

6. The most unhappy singles in China?

The new and increasingly female path to the middle class

Right now the compass seems to be pointing in the direction of health care.  That probably won’t change anytime soon:

In 1980, 1.4 million jobs in health care paid a middle class wage: $40,000 to $80,000 a year in today’s money. Now, the figure is 4.5 million.

The pay of registered nurses — now the third-largest middle-income occupation and one that continues to be overwhelmingly female — has risen strongly along with the increasing demands of the job. The median salary of $61,000 a year in 2012 was 55 percent greater, adjusted for inflation, than three decades earlier.

And it was about $9,000 more than the shriveled wages of, say, a phone company repairman, who would have been more likely to head a middle-class family in the 1980s. Back then, more than a quarter of middle-income jobs were in manufacturing, a sector long dominated by men. Today, it is just 13 percent.

The full story is here, by Searcey, Porter, and Gebeloff.

From the comments: how to restructure basketball (and other sports?)

Kevin Erdmann writes:

I think basketball would be vastly improved if after the 3rd quarter, we just added 20 points to the higher score, and said, first team to that score wins.

Or, for that matter, make it score based instead of time based. It’s halftime when one team gets to 30, and the game is over when one team gets to 60.

It gets rid of all the fouling and time outs at the end of close games, and it means that it doesn’t serve any purpose for the winning team to drain the clock. And, it means that a team that falls far behind has more of a chance to catch up – like in baseball.

Of course this would not maximize ad revenue, which tends to increase with close games as the number of timeouts rises.  Furthermore perhaps people do not enjoy the outcome as much if they do not have to wait a bit for it.  Nonetheless an interesting idea.

Hayek on Mill and the Mill-Taylor Friendship

That is the newly published volume 16 of The Collected Works of F.A. Hayek, edited by Sandra J. Peart.  Of course this is splendid from beginning to end, including Peart’s introduction, the letters, Hayek’s commentary, and assorted documents, and the book even contains three very nice poems written by Harriet Taylor.

Is Hayek here blaming Taylor for moving Mill in a collectivist direction?  Is that the Straussian reading of this book and the reason why Hayek did it?

If there were a phrase for “one step above and beyond self-recommending,” this volume would get it.

Robot sentences to ponder

Ironically, given all the concerns about robots destroying jobs, Mr Tsuda said one of the main constraints on the market’s growth was a shortage of human engineers.

“To use robots — not just to make them — you need quite a level of engineering,” he said. “If anything, for us and the market as a whole, growth is held back by the number of engineers who can do that.”

From Robin Harding at the FT, there is more here.

Assorted links

1. Unusual “review” of 50 Shades of Grey.

2. Markets in everything: the hippopotamus sofa.

3. The Greek artist who hacks the euro.  And here are fictional banknotes for the Hungarian euro.

4.”Do Not Cite or Circulate.”

5. Eric Voegelin: “Don’t immanentize the eschaton!”

6. What should Greece do now?  And Paul Krugman thinks the Greeks got an OK deal.

Algorithm Aversion

People don’t like deferring to what I earlier called an opaque intelligence. In a paper titled Algorithm Aversion the authors write:

Research shows that evidence-based algorithms more accurately predict the future than do human forecasters. Yet, when forecasters are deciding whether to use a human forecaster or a statistical algorithm, they often choose the human forecaster. This phenomenon, which we call algorithm aversion, is costly, and it is important to understand its causes. We show that people are especially averse to algorithmic forecasters after seeing them perform, even when they see them outperform a human forecaster. This is because people more quickly lose confidence in algorithmic than human forecasters after seeing them make the same mistake. In five studies, participants either saw an algorithm make forecasts, a human make forecasts, both, or neither. They then decided whether to tie their incentives to the future predictions of the algorithm or the human. Participants who saw the algorithm perform were less confident in it, and less likely to choose it over an inferior human forecaster. This was true even among those who saw the algorithm outperform the human.

People who defer to the algorithm will outperform those who don’t, at least in the short run. In the long run, however, will reason atrophy when we defer, just as our map-reading skills have atrophied with GPS? Or will more of our limited resource of reason come to be better allocated according to comparative advantage?

Why is the British electorate fragmenting?

The Economist, referring to “six-party politics,” reports:

In 1951 the Conservative and Labour parties together scooped 97% of the vote; in May, opinion polls suggest, they will each win barely a third.

You will note that the UK has a fairly strict “first past the post” system, so if such fragmentation happens in their system perhaps it could happen anywhere.  A second Economist article offers a few hypotheses about why this is happening:

1. People are now used to shopping in markets, and on the internet, for exactly what they want.

2. Politics has become increasingly multi-dimensional; this article cites the possibility that a “libertarian-authoritarian” axis may be replacing “left-right,” or consider the issue of Scottish independence.

3. Perhaps current politicians are less skilled than Thatcher and Blair at attracting the allegiance of a broad cross-section of British society.

I worry that the general decline of discretionary government spending may make politics less stable (but also more interesting, not necessarily in a good way).  When there is plenty of spending to bicker about, politics revolves around that question, which is relatively harmless.  When all the spending is tied up, we move closer to the battlefield of symbolic goods, bringing us back to “less stable and more interesting.”  If that is a cause, this trend is likely to spread.  (In a new paper David Schleicher argues that electoral reform may not stop polarization and splintering.)

Arguably a good deal of American politics is a cloaked debate over whether a particular kind of Christian worldview ought to enjoy higher or lower social status.  Since Britain doesn’t have much religion, perhaps that is why they are fragmenting in so many other directions.  Exactly which British debate is supposed to be imposing the uni-dimensionality on the political spectrum?

Other links

1. Behzod Abduraimov from Uzbekistan is the new piano sensation.

2. Against robot worries.

3. Can you tell whether it is you or your avatar talking?

4. More tweets about Amartya Sen, some even mention his daughter.

5. Every bridge in America.

Assorted Greek links (Greece lost)

1. The new Greek deal and trust.  Die Welt (in German) says that Greece has four months to get its act in order, otherwise prepare for an orderly exit.  Here is the comment of the Greek government issued at the end of the Eurogroup meeting, worth a read.  Here is .

2. Numerous sources suggest that without a deal, Greek banks would have been broke on Tuesday (Monday is a holiday there).  Given game theory, does this raise or lower your opinion of the quality of the deal that was cut?

3. Peter Spiegel notes on Twitter: “Morning after: still not sure why @syriza_gr picked this fight. Got v little, & spent lots of political capital they need for 3rd progm negs”

4. The struggle resumes on Monday, with further negotiations required to define the actual substance of the policy reform part of the agreement.

5. It seems to me that if you put aside the talk, and the creative ambiguity on the primary surplus numbers, that overall Greece is on a shorter leash than before.  The Germans have shown credibly that they are willing to live with Grexit, Syriza showed it doesn’t have a Plan B, doesn’t have so much support within the eurozone, and it is revealed that Greek deposit flight is on a trigger-sensitive path at any moment.

6. Should you be afraid of dark matter?