Tyler Cowen's Blog, page 45

Health care cost control sentences to ponder

“I’m always curious when I read this ‘good news’ that health costs are moderating, because my health care costs go up significantly each year, and I think that’s a common experience,” said Mark Rukavina, president of Community Health Advisors in Massachusetts.

Um…how much time with Megan McArdle or Arnold Kling would it take to set him straight?  The full story, of interest on other points too, is here.

Assorted links

1. Is TV the next internet?  And George Selgin reviews Calomiris and Haber.

2. Um vs. uh.

3. Michael Pollan’s piece on psychedelics should win one of those David Brooks magazine awards (“Sidneys”), as it will prove one of the best and most important long reads of the year.  Among its other virtues, it confirms my view that the “psychedelic theorists” of the 1960s and 70s (and sometimes earlier, as with Huxley) remain underrated thinkers.

4. On the changes in China’s intellectual landscape.

5. Trying to test Schrodinger’s cat: do quantum states apply at the macro level too?

6. How many Harvard students actually attend Harvard lectures, or has Harvard already mastered on-line education? (pdf)

7. Proof that the robots are not benevolent.

I, Rose

Valentine’s Day is this week and what better way to celebrate than to appreciate the economics of roses!

A rose isn’t just a symbol of love it’s a symbol of global cooperation coordinated by the invisible hand. In The Price System, the just released section of our principles of microeconomics course, we feature two rose videos (along with videos on the great economic problem, speculation, prediction markets and more). Here’s the first; I, Rose. Tomorrow, A Price is a Signal Wrapped up in an Incentive. Enjoy.

Who are the people I most admire?

Last I looked, Elon Musk was a clear winner of the MR readers’s poll for “most admired.”

Personally, I admire successful creators, scientists, and entrepreneurs a great deal, and Musk fits into those directions very well.  Still, the very top of my personal list would be shaped more by how much individuals had sacrificed.  Let me throw out a few options:

1. The members of the Mexican judiciary who have stood up to the drug gangs, often at the expense of their lives.  They believed in a better future for Mexico and I think eventually they will triumph.

2. Public health professionals who work under great hardship in difficult places, for years, to limit malaria or the spread of Ebola.  In addition to questionable living conditions, they often face high health risks themselves.

3. How about Aun San Suu Kyi, who endured about fifteen years of prison to help bring greater liberty to Myanmar?

4. At a smaller scale, how about individuals who volunteer to work in the burn unit at the hospital?  That has to be fairly icky labor, yet as medical care it can be effective.

You can do variants on my 1-4, but I would start with examples such as those.  Not at the very top of my list, but I also would think about good parents who work as primary caregivers.

If we are restricted to political/public figures, I would opt for Ben Bernanke.

Overall I was surprised how few of you approached the question the way I have, rather as a group you picked too many nerdy white guys.  Now I don’t like to play “the PC card,” and if a process generates a lot of nerdy white guys, I don’t then assume that process is necessarily biased or requiring correction.  Still, the fact that my list creates so much room for women (and non-whites) suggests it reflects the universality of human experience more than what most of you came up with.

It is also notable how few of you picked entertainers or sports figures, as such individuals have figured prominently on such lists in the past (see my What Price Fame?).  In 1971 a lot of people would have said “John Lennon,” and in his day Ted Williams placed high in such surveys.  These days, for better or worse, the tech world and politics seem to exercise a stronger hold on our imaginations, all the more among MR readers I suspect.

Addendum: Here is Noah Smith’s list.

Why I don’t like desserts

I’ve been challenged on this point many times in the last few days.

People, let me stress there are two different propositions:

1. “I don’t like desserts.”

2. “I don’t like desserts (with economist’s hat on).”

I meant mainly the latter, although I do also find many desserts overrated.  If you grow accustomed to not too much sugar, many desserts in fact turn out to be disgusting.

In any case, the sugar and calories “shadow price” of most desserts is pretty high.  I’d rather consume my health sins in other ways, and so relative to their actual net prices I find few desserts are worth it.  My favorite desserts, by the way, are found in Kolkaata, and those I consume avidly.  If I lived in Kolkaata, however, I might have to convince myself they are not any good, because I see a lumpiness issue with their negative health effects. I don’t feel my tourist consumption will harm me much if at all, but as a native I would be tempted to have them every day.

The green pepper is a food which as a human I like a small amount but as an economist I like a great deal.

Who are the individuals you admire the most?

Yesterday a few of you asked me to run this poll.  Please leave your answers in the comments, I will report back.  I thank you all in advance for the wisdom of your responses.  And please restrict your answers to living people, or say anyone who has passed away in the last five years, so this should be about contemporaries, not Joan of Arc or Einstein.

Facts about music

Between 2008 and September 2012, there were 66 No. 1 songs, almost half of which were performed by only six artists (Katy Perry, Rihanna, Flo Rida, The Black Eyed Peas, Adele, and Lady Gaga); in 2011, Adele’s debut album sold more than 70 percent of all classical albums combined, and more than 60 percent of all jazz albums.

That is from William Giraldi, who is reviewing Scott Timberg’s Culture Crash: The Killing of the Creative Class, an interesting book which I hope to cover more soon.

The pointer here is from Torsten Kehler.

*Rationalism, Pluralism, & Freedom*

That is the new and notable book by Jacob T. Levy.  Here is one overview bit:

…the book is not a defense of pluralist liberalism, except as against the pretensions of some rationalist liberals that it should be ignored altogether.  It is rather, ultimately, an argument for that claim of irresolvability.  A full understanding of liberal freedom would draw on truths from both the rationalist and pluralist traditions; it would recognize that states and intermediate groups alike can oppress.  And yet we cannot compromise between or combine the two accounts in a wholly satisfactory manner.

In this “contrast between pluralism and rationalism, Montesquieu is the crucial figure,” to quote Jacob.

Overall I am myself inclined to side with rationalism over pluralism.  We can use rationalism to judge a rationalism-pluralism blend to be acceptable, but pluralism cannot play a comparable role.  Mostly we like pluralism because we have a good empirical sense of which plural entities will survive and flourish in a modern capitalist democracy; hardly anyone likes a pluralism where their favored groups would absolutely lose out in terms of influence and status.  In this sense the debate is rarely about pluralism per se.  Jacob is I think skeptical that we can have a good answer as to how much plural groups (e.g., churches, mosques, Boy Scouts) should be regulated by the state.  I nonetheless think that a) public choice theory suggests over-regulation is far more likely than under-regulation of such groups, and b) rationalism can broadly identify some political and economic conditions which will tend to lower the costs of exit from such groups, and perhaps that is enough to make a case for those conditions.  In these ways I end up as more of a classic Nozickian — on “utopia” — than Jacob does.

In any case, as might be expected, this book cements Jacob’s place as one of the leading thinkers in today’s liberal tradition.

From the comments, Scott Sumner

The Danes have an escape hatch that the Swiss did not have, they can join the euro whenever they wish. Thus the Danish central bank can pocket huge profits from European speculators for as long as they wish, and then if their balance sheet gets uncomfortable they can join the euro at the drop of a hat. There are very few countries in such an enviable position. (Even so, I think the peg is a bad idea–they should let their currency float, as the Swedes do).

The link is here.  My question is this: on net, is this an argument for or against the credibility of the peg?

Assorted links

1. Do right-wing movies make more money? (speculative)

2. Krugman on open economy macro and the strong dollar; not exactly my view but still a useful post.

3. Good FT profile of Varoufakis.

4. Uptick in independent bookstores.

5. Has Jeb Bush embraced Reihan Salam?

6. How well can legal marijuana do without banks and banking?