This is a blog about economics, history, law and other things that interest me.
Saturday, August 29, 2015
Round table on Edward Baptist's Half has Never Been Told
The September Journal of
Economic History has a round table of reviews of Edward Baptist’s book The Half Has Never Been told, with
reviews by Alan Olmstead, Jonathan Pritchett, Trevon Logan and Peter Rousseau. They
each address different aspects of the way that Baptist misrepresents the
historiography of American slavery and makes things up. Thanks to Alan Olmstead
for mentioning one of my
blog posts on the book. Many of the points noted in these reviews are similar to ones that I and Pseudoerasmus
made about the book shortly after it came out, around the same time it was
getting glowing reviews in places like the New York Times Book Reviews. I found
Logan’s review particularly interesting when it stepped away from what is
typically thought of as economic history. He concludes
I think as an economic historian I was so offended by the
books portrayal of economic historians I may have missed some of the bigger
problems.
Tuesday, August 18, 2015
Tariffs and the Civil War, or 95% of All Statistics Are Made Up
A recent letter
to the editor of our local paper argued that secession and the Civil War
were caused by high tariffs not slavery. The Confederate states were rebelling
against high taxes and big government. Apparently, they were really just Reagan
Republicans or maybe even libertarians (slaveholding libertarians). The author
of the letter made the claim that the South paid 75 percent of the tariff
revenue in 1859. I thought the claim was so outrageous he must have just made it up. It turns
out you can find this claim all over the internet. It turns out it even has
academic credentials behind it. Some people attribute it to Walter
Williams, but he appears to have gotten it from Thomas Di Lorenzo, who
attributed it to Frank Taussig’s The
Tariff History of the United States. Di Lorenzo, however, did not
provide a page citation. I suspect that he did not provide a page citation
because one does not exist. If someone can find this in Taussig please let me
know.
In any case, it is not true that
most revenue came from Southern ports. A small fraction of tariff revenue came
from Southern ports. In 1860 the Secretary of the Treasury reported the amount
of revenue collected in each collection district between 1854 and 1859. (Sen.
Ex. Doc. No. 33 36th Congress 1st Session). Looking at
1857, for instance, one finds that total revenue was $64,171,034. Most of the
revenue, $42,510,753, came as it did every year from a single port: New York.
The most important port in the South was New Orleans, which brought in a little
more than $3 million, less than half as much as Boston. Southern ports were not
even close to being the most important source of revenue.
There is no mystery as to why Southern
states seceded. They issued secession proclamations explaining their actions. South
Carolina was the first to secede, and the state’s proclamation does not mention
tariffs. It is entirely
about the perceived threat to slavery. It declares that
“A geographical line has been drawn across
the Union, and all the States north of that line have united in the election of
a man to the high office of President of the United States, whose opinions and
purposes are hostile to slavery. He is to be entrusted with the administration
of the common Government, because he has declared that that "Government
cannot endure permanently half slave, half free," and that the public mind
must rest in the belief that slavery is in the course of ultimate extinction.”
Apparently we are to believe that they were simply hiding their true
motivation, opposition to tariffs. I wish modern defenders of the Confederacy
were as honest as its original defenders.
Thursday, August 13, 2015
History, Facts and Life Expectancy
Earlier this week on twitter Peter Bent mentioned Richard Yeselson’s
review of Steve Fraser’s Age of Acquiescence:
the Life and Death of American Resistance to Organized Wealth and Power in Dissent.
One of the claims made by Fraser, and repeated by Yeselson, is that, although
life expectancy increased during the Gilded Age, “it is also the fact that the
life expectancy of white males born during or after the Civil War was ten years
less than it had been a century earlier” (Fraser, 2015: 39). He provides a
citation to Centers for Disease Control, National Center for Health Statistics.
That is the entire citation. It is not clear whether it refers to a publication,
a website, or personal correspondence. I checked the website for the Center. They do have statistics on life
expectancy, but I only saw ones that went back to 1900. Historical
Statistics of the United States has estimates of life expectancy, but they only
go back to 1850. They show that life expectancy at birth increased from about
38 in 1850 to 40 in 1860 and 50 by 1900. If these estimates are reasonable and
Fraser is correct, life expectancy at birth would have been between 50 and 60
years in the late 1700s.
There is one estimate that I know of life expectancy in the
1700 that is this large: Fogel, using family histories, estimated that life
expectancy was greater than 55 years in the mid-1700s.(Robert William Fogel, "Nutrition and the Decline in Mortality since 1700: Some Preliminary Findings," in Engerman and Gallman Long Term Factors in American Economic Growth.
Fogel’s graph appears to indicate that life expectancy did
not return to its mid 1700s level until the middle of the twentieth century. Personally,
I’m skeptical of the accuracy of these estimates. They are much higher than
other estimates. In the late 1700s, Wigglesworth estimated life expectancy in
the mid 30s in Massachusetts in the late 1700s. Recently, Becker
estimated life expectancy in the 1700s to be around 40, using data on people
who attended Yale. In addition, Fogel notes that members of the British peerage
had a life expectancy of only about 40 years in the late 1700s. It should also
be noted that Fogel’s estimates of large decreases in life expectancy are consistent
with estimates of large decreases average height, but there are good reasons to
question the validity of that conclusion as well. If there were no large
decreases in welfare reflected in average height, does it make sense that there
would have been large decreases in life expectancy. In short, much of the available evidence seems hard to reconcile with very high life expectancy in 1700s America.
I do find it
plausible that there may have been a number of factors in the early nineteenth
century that could have adversely affected health. Increased urbanization almost
certainly increased the spread of disease. In addition, there were new diseases
to spread, like cholera.
With some luck and a lot of work we will probably have more
confidence in our knowledge of health and welfare in the eighteenth and nineteenth
centuries. In the meantime, I am inclined to believe Becker’s estimates for the
1700s. That would mean that life expectancy increased very slowly during the
nineteenth century, and then more rapidly after about 1900 as cities began to
invest in sewage removal and water purification. Chapter 3 of Higgs Transformation of the American Economy (still my favorite book on American
economic history and now free
from the Mises Institute) describes the impact of these improvements.
What is the point of all this rambling on about what we don’t
know? The point is precisely that, we don’t know. I know it’s a lot to ask, but
historians should take a critical approach to the evidence. Let people know
when something is still up in the air. There is really nothing resembling a
fact regarding mean life expectancy in the 1700s in America. There are a number
of widely varying estimates. Don’t tell people we have “facts” that we don’t
have. There are more, and more important, puzzles in history than what happened
to the Roanoke Colony. Perhaps I’m getting old and cranky, but it seems to me
that I have seen a lot of historians lately playing fast and loose with the
evidence in order to make their point. And many of their reviewers do the same:
they evaluate the book on how well it conforms to their preconceptions.
Thursday, July 23, 2015
Some random stuff
Until I was 9 I lived a block away from the Hastings Museum.
My Grandma Schneider bought my brother and me annual passes. We spent a lot of
time there as kids and went back for the first time in over thirty years last
week. It is still one of my favorite museums. Some of my other favorites are Pioneer Village in Minden, NE, the Deutsches Museum in Munchen, the Frontier Culture Museum in Staunton,
VA, the Royal British Columbia Museum
in Victoria, B.C., and the National
Museum of American History in D.C.
Tuesday, June 30, 2015
How are prices determined? The case of statistical consultants
How are prices determined? AnnMaria De Mars offers
advice to statisticians on how to price their services. It comes down to this
“So, that’s
it, decide a fair rate based on what the market is paying, where, based on objective criteria, your
skills and experience fall compared to the general population of
whatever-you-do and figure in what non-monetary requirements you or the
employer have .”
Dr. De Mars’ offers good
advice and good economics. This is pretty much what I tell students regarding
how businesses set prices, except I throw in a little economic terminology. She
essentially describes a price that is a function of the price elasticity of
demand. The price elasticity of demand is the percentage change in the quantity
demanded in response to a one percent change in price. Other things equal, when
the price of a good increases people buy less of it. Consequently, the more
inelastic the demand for the product you sell, the greater your ability to mark
up the price above the cost of production.
What determines elasticity?
Elasticity is determined by the availability of close substitutes. The more
close substitutes for the good you sell (the more elastic the demand), the less
control you have over the price; the less close substitutes there are for the
good you sell (the more inelastic the demand), the more control you have over
the price. In other words, if you are pretty much like the other statisticians
out there you need to charge what they are charging; you can only charge more
if you can convince people that you are superior in some way. And, in the long
run, you can probably only convince people that you are better than others if
it is true. In other words, businesses that do not generally follow De Mars’
suggestions are unlikely to survive.
Understanding how prices are
determined also provides a better understanding of business strategy. I tell
students that if they plan on starting a business they should aim to be a
monopolist. The essence of being a monopolist is that you are the only seller.
To be the only seller, you need to convince customers that other goods are not
a substitute for yours, and you need some barriers to entry, things that keep
people from copying what you do. Fortunately for statisticians, they already
have somewhat of a barrier to entry in that most people think that math is a
lot of work and not much fun.
The other good point that she
makes is that people should not just focus on the money. A lot of people think
economists are totally focused on money. Nothing could be further from the
truth about good economics. Economists assume that people maximize utility,
which means satisfaction. People can get satisfaction from a lot of different things.
Two related things:
2. One of De Mars’ daughters has
done an extraordinary job of demonstrating that none
of her competitors provide a close substitute for what she does.
Friday, June 19, 2015
How much are auto workers paid in Mexico?
The Washington
Post reports that “The Center for Automotive Research, a Michigan-based
think tank, found that in salaries and benefits, car companies pay an average
of $8 an hour for Mexican workers, while in the United States that figure would
be four to seven times as high.” A few paragraphs later it reports on a walkout
at a Mazda plant where the supervisor was abusive to the workers, stating that “For
a job with 12-hour days, often including weekends, that paid about $75 a week —
with $3 of that disappearing into union dues — some decided it was not worth
it.” Forget about the weekends, $75 for twelve hour days five days a week
would come out to $1.25 an hour. That is a lot less than $8. To reconcile the two
either workers would have to get about $6.75 an hour in benefits or there would
have to be a very high variance in wages. It is possible that both numbers are
accurate. One number is an average while the other refers to a particular
factory. The large discrepancy does, however, raise a lot of questions that the
author and editors do not even seem to notice.
Wednesday, June 17, 2015
I really don't get Richard Thaler
I was listening to Here
and Now yesterday and there was a discussion with Dan Gilbert and Richard
Thaler about Thaler’s new book. In the discussion Thaler brought up the story
of how he had told an audience of psychologists at Cornell about something like
the life cycle theory of saving and how they had all laughed “hysterically.”
He seemed to think it was another great example of how everyone else can see how
getting a Ph.D. in economics subtracts “common sense” from economists. He
probably hadn’t told them about the numerous empirical studies that found some degree of consumption smoothing. But haven’t they
at least heard about the debt their students are taking on in the expectation
that their future earnings will be higher. Haven’t they met anyone saving for
the retirement they are looking forward to? Do they all really live as if there is
no tomorrow? Really? Surely he can come up with a better example of the problem
with economics than a theory that fits with common sense, casual empiricism and
careful statistical analysis.
Thaler also said that the first
sentence in every economics textbook is something like “People maximize
utility.” Name one. It’s not in the versions of Mankiw, or Krugman and Wells, or
Frank and Benanke, or Cowen and Tabarrok. I'm sorry. I really shouldn't keep letting the evidence get in the way of a clever story.
Tuesday, June 16, 2015
The Panic of 1907 and the Analysis of Financial Crises
I started to research the Panic
of 1907 late in 2009. I came to the topic by a rather circuitous route. While
working on my dissertation on the origins of the 1898 Bankruptcy Act, I also
started to study the evolution of corporate reorganization, which wasn’t
covered by the Act. That research ultimately appeared in Business
History Review. Several important reorganization cases involved the
Farmers’ Loan and Trust Company. The name was familiar to me from teaching
American Economic History because of the income tax case, Pollock v. Farmers’
Loan and Trust Co., and two important railroad regulation cases, Reagan v.
Farmers’ Loan and Trust Co. and Stone v. Farmers’ Loan and Trust Co. I was curious what this company did that left
its fingerprints all over nineteenth century legal and economic history. So I
wrote a
book about the Farmers’ Loan and Trust company and its influence on the
law.
About the time that I finished
the book there was increased attention to the Panic of 1907. The descriptions
of New York City trust companies as novel, unregulated and reckless did not fit
with what I had been reading and writing about trust companies like the
Farmers’ Loan and Trust Co. So I
ended up writing a paper that argued that the panic was not the result of
inadequate regulation of trust companies and that to understand the Panic one
has to understand that not all trust companies were the same.
What is really remarkable is that we know so
much more about the panic of 1907 than when I started my work in 2009.
Rodgers
and Payne have shown how gold shipments from France played a role in ending
the Panic.
Hilt,
Frydman and Zhou show how the Panic impacted the companies doing business
with the trust companies that experienced runs.
Moen and Tallman, who were ahead
of the curve in re-examining the Panic of 1907, have examined the
transmission of the panic as well as how the Clearing House Association helped to
alleviate the Panic.
Most recently, Fohlin, Gehrig
and Haas have shown the role that lack of transparency played in the panic
in the stock market.
I believe that we have a much
more about what happened in 1907 than we did just a few years ago, but these
additions to our knowledge about financial crises in history should also
promote caution. I like to think that my work will stand up to the test of
time, but I’m sure previous authors did as well. It seems to me that the fact
that we are still learning about the Panic of 1907 should cause economists to
speak with some caution about the current economic events.
Stoller on Goffman and Ethnography
Paul
Stoller examines the Goffman controversy and the future of ethnography. He
recognizes that there are really two different sorts of issues involved. The
first has to do with her interactions with her subjects. Stoller argues that
emotional involvement with one’s subjects is likely to occur in ethnographic
research and that ethical dilemmas can arise from getting close to one’s
subjects.
“doing ethnography, like living life, involves
love and hate, fidelity and betrayal, and courage and fear. Sometimes
ethnographic experience brings us to face to face with issues of life and
death--the real stuff of the human condition.”
This seems reasonable, though, if in the
process of research someone commits a crime, I think they should be prepared to accept
the consequences.
Unfortunately, when he gets to the second issue, which has to
do with methodology, I think he throws up
a straw man. He asks
“But can we trust
ethnographic accounts? Can ethnographers get "it" right? Given the
infinite complexities of the social laboratory "the quest for
certainty," as the philosopher John Dewey put it, is an illusion. If
ethnographers cannot provide a perfect, scientifically verifiable
representation of reality, how can anyone judge the contribution of an
ethnographic work? This question, which has been raised by some of Goffman's
critics, fails to fully appreciate the aim of ethnography.”
I believe we should try to get it
right, but I think most of recognize that out understanding of the world is
always incomplete, we can only have varying degrees of certainty depending on
the degree to which the available evidence appears to support or contradict a
particular belief. I certainly do not
want everyone to follow some supposed model of what is “scientific.” I don’t even
know what “scientifically verifiable” means.
What I do ask is that a scholar’s
attempts to persuade me involve more than saying “trust me.” What appears to be
lacking in Goffman’s work is a means by which one can determine whether or not
her interpretation is based upon empirical evidence, her observations, or on her
imagination. This is particularly problematic because of the numerous
inconsistencies within the story that she tells and the inability to find
evidence consistent with some of her claims, described here and here
and here
and here.
In his own work on sorcerers, Stoller
reported which villages he worked in. If I thought his stories of sorcery were a
little far-fetched, I could visit Tillaberi and see if my observations of
sorcerers resembled Stoller’s; I could even ask people if they had any
recollection of Stoller. Anthropologists have done this and, occasionally,
challenged the validity of earlier ethnographies: Mead on Somoa, and Chagnon on
the Yanomami. It doesn’t seem to me that this sort of follow up is possible for
Goffman’s study. Goffman writes about an anonymous group of people in an
unidentified neighborhood in Philadelphia. Yes, I could go to Philadelphia, but
if my experience was completely different than Goffman’s should could just say
I got the wrong neighborhood. The problem is not that her work isn’t
verifiable; the problem is that her work does not appear to be falsifiable. Any
evidence that appears to contradict her work will be explained away.
I want to know how an impartial,
or even critical, observer can evaluate her evidence. Michael LaCours and Michael
Bellisales, just to name two, have shown that “just trust me” is not enough.
Wednesday, June 10, 2015
Mostly economic history
Geoffrey Jones on the
role of history in business.
Did people in the U.S. actually
get shorter during the Industrial Revolution? Maybe not Bodenhorn, Guinnane and Mroz and Ariell
Zimran. (HT @pseudoerasmus)
Pseudoerasmus on famines.
Business History Conference program
Economic History Association program
Special issue of Journal of Financial
Stability on alternatives to the Fed. Lawrence White advocates a return to
a commodity standardOn the other hand, the St.
Louis Fed doesn’t think a return to gold would be such a good idea. . Also,
here is George Selgin on 10
things economists should know about the gold standard. Selgin argues out
that most of the problems that arose under the gold standard arose less from
the gold standard itself than from attempts to interfere with it. I agree with
a lot of what he has to say, but I wouldn’t go so far as to say “That
U.S. financial crises during the gold standard era had more to do with U.S.
financial regulations than with the workings of the gold standard itself is
recognized by all competent financial historians.” I do think that U.S.
financial regulations were largely responsible for financial crises, but I am
not prepared to call anyone who disagrees with me incompetent. Hanes and
Rhode, for instance make a case for a combination of cotton crops and the gold standard.
But I assume if we had a gold
standard again governments would interfere with it just like they did back
then.
While I do not regard all
advocates of the gold standard as nuts, I am skeptical that it would be a good
idea. First, there seemed to be a fair amount of manipulation of gold flows. Attempts
by the Bank of England to prevent the outflow of gold played a role in several U.S.
Panics, e.g. 1837 and 1907, and Irwin
has made a case that France’s sterilization of gold inflows played a
significant role in causing the Great Depression. Second, when push comes to
shove, countries abandon the gold standard. In other words, it’s not obvious why
a commitment to uphold a commodity standard should be more convincing than a commitment
to strictly adhere to a rule to target money supply growth, inflation, NGDP, or
something else.
And here is another take
on the Alice Goffman controversy.
Monday, June 8, 2015
What is a rational choice?
Many people know that
economists use models of rational choice. But what does that mean?
Ruth Marcus
explains
to her readers that, “Economically
speaking, the decision to have children is not utility-maximizing. And yet,
most of us — intentionally, passionately, joyfully — make this least rational
of choices. More than once.”
The
economist Richard Thaler makes similar statements in the New
York Times, as well as in his new book
“Economists create
this problem with their insistence on studying mythical creatures often known
as Homo economicus. I prefer to call them “Econs”— highly intelligent beings
that are capable of making the most complex of calculations but are totally
lacking in emotions. Think of Mr. Spock in “Star Trek.” In a world of Econs,
many things would in fact be irrelevant.”
Thaler goes on to explain that
“An Econ would not expect a gift on the day
of the year in which she happened to get married, or be born. What difference
do these arbitrary dates make? In fact, Econs would be perplexed by the idea of
gifts. An Econ would know that cash is the best possible gift; it allows the
recipient to buy whatever is optimal. But unless you are married to an
economist, I don’t advise giving cash on your next anniversary. Come to think of
it, even if your spouse is an economist, this is not a great idea.”
The problem is that all this is a
bunch of nonsense. Utility simply means satisfaction. If you are doing something
“intentionally, passionately, joyfully” it seems fair to assume you are getting
a great deal of utility from it. How are people “totally lacking in emotions”
going to get satisfaction from anything?
What do economists actually mean
by rational choice? I’ll let Gary Becker explain:
“What is meant by rational behavior? Consider
first what is not meant. Certainly not that people are necessarily selfish, “economic
men” solely concerned with their own well being. That would rule out charity
and love for children, spouses, relatives or anyone else, and a model of
rational behavior could not be so grossly inconsistent with actual behavior and
still be useful. A viable definition of rationality must not exclude charity
and love: indeed consistent family behavior probably requires love between
family members.
Also,
rationality should not imply that each household’s decisions are necessarily
independent of those made by others. Different households are linked ultimately
by a common cultural inheritance and background, and they may also be linked in
a more proximate way. If household j increases its consumption of X, household I
might be led to change its consumption of X. Such interdependencies commonly
occur, and should be consistent with our model of rational behavior.
The
essence of the model of rational behavior is contained in just two assumptions:
each consumer has an ordered sort of preferences, and he chooses the most
preferred position available to him.” Becker Economic Theory pages 25 and 26)
Preferences can, and often are,
driven by emotions. Preferences are also influenced by the culture we live in
and the people we live with.
The one thing that the rational
choice approach does not do is to say what people should want. This, of course,
makes the traditional economic approach very different from a behavioral
economic approach that seeks to “nudge” people to do what Richard Thaler thinks
they should do.
Thursday, June 4, 2015
On The Run and Social Science Research Methods
There has been a lot more about Alice Goffman’s On the Run
the last few days.
Lubet’s
response to the response
Although, much of the attention has been focused on the
issue of her possible criminal conduct, it is the methodology of her project
that really concerns me. I have not yet read the book. I have,
however, read her paper in the American Sociological
Review that was based upon the same research. She claims to have spent six
years studying the residents of a neighborhood in Philadelphia. The name of the
neighborhood is a pseudonym as are the names of all the individuals.
Consequently, it is not possible to verify any of her claims. It is not even
possible to check her account against her own field notes. She claims to have
destroyed them. All of this is ostensibly to protect the people who are
described in the book.
Her entire methodology is so alien to my view of research in
the social sciences I find it hard to comprehend. It is not her
immersion in the culture of the people she was studying that concerns me.
It seems like a legitimate method of qualitiative research. Whether you use qualitative or quantitative methods should be determined by the
question you are trying to answer. What puzzles me is the complete lack of
accountability. One of the essential elements of good historical research is to
be clear about the relationship between your conclusions and the sources that
you use. Anyone should be able to follow your trail of sources to see if it
leads to your conclusions. Is anyone going to believe you if you say that you
use evidence from a secret notebook at an undisclosed archive? Could you write
a history dissertation at Princeton based upon a secret diary that you say you
destroyed to protect the author’s privacy? In economics you are generally expected to be ready
to present you data to other researchers or have a very good reason why you
cannot. The American Economic Review, for instance, expects authors to make
their data available. Reinhart and Rogoff got in trouble a while back for a
spreadsheet error, but we should not forget that when a graduate student asked
for the data they gave it to him. Goffman’s entire body of research appears to
depend on “Just trust me.”
I am not saying that she lied. There are troubling
inconsistencies within her accounts and between her accounts and other evidence.
And her response to Lubet’s suggestion that she had committed a crime only adds
another inconsistency. Her account in the book is completely different than the
account in her response. Even if there were not inconsistencies, I would be
concerned about a methodology that places so much weight trusting the author. The
rewards in the social sciences for coming up with results that are deemed
interesting and important are considerable. Goffman got a Ph. D. from
Princeton, a best dissertation award, a book contract, a publication in the
American Sociological Review, a TED talk, and a job at the University of
Wisconsin. The temptations to give people what they want are too great to rely
upon a methodology that provides no means for subsequent researchers to evaluate the evidence.
Note about the anonymous critique: Some might wonder why I
am willing to link to an anonymous critique when I have such a problem with the
anonymity in Goffman’s work. I have seen discussion on the web suggesting that
because this critique is anonymous it should be completely disregarded. I don’t
know why the author prefers to remain anonymous. As long as their argument is
not based upon their authority I do not really care. The Federalist papers were
published under a pseudonym. Gosset’s work on the t distribution was published under
a pseudonym. I do not regard anonymity itself as a problem. The anonymous
author of the critique does not at any point ask me to just trust them. There
is nothing in their argument that hinges on their identity rather than the
evidence.
Saturday, May 30, 2015
Hobbes and GameTheory
In Hobbled
by Hobbes Christopher Ryan argues that the anthropological and archeological
evidence is inconsistent with Steven Pinker’s interpretation of long term
trends in violence. I don’t yet have a firm opinion about that issue, but Ryan
also refers to Pinker and others as neo-Hobbesian. He explains that
“For reasons having nothing to do with scientific accuracy,
Hobbes’ dire sloganeering about the misery of pre-civilized human life echoes
down the centuries. Who among us, three and a half centuries later, has not
heard that our ancestors’ lives were “solitary, poor, nasty, brutish and
short”? This demonization of human existence in pre-state societies is
essential to preserving the legitimacy of God and country—both of which run a
protection racket promising to guard us against our own demonic inner nature.
Hobbes’ infectious meme is certainly among the most famous phrases ever penned
in the English language, and it shows no sign of fading. Indeed, his dismal
view of human nature is still being enthusiastically spread by neo-Hobbesian
presidents, pundits and professors.”
I have thought for some time that Hobbes view of human
nature has been somewhat misinterpreted. In Chapter 11 of Leviathan he
describes his view of human nature:
“So that in the
first place, I put for a general inclination of all mankind, a perpetual and
restless desire of power after power that ceaseth only in death.”
That does sound like a pretty dismal view of
human nature, but then he explains:
“And the cause of this is, is not always that a man hopes for a more
intensive delight than he has already attained to; or that he cannot be content
with a moderate amount of power; but because he cannot assure the power and
means to live well, which he hath at present without the acquisition of more.”
In Hobbes view the problem was less
our demonic human nature than that people are essentially a prisoners’ dilemma
type game, a multi-person arms race.
Tuesday, May 26, 2015
Just make it up
I have written several times about how Edward Baptist just
makes up numbers for his estimate of the importance of slavery to American
economic development. It turns out that he is on to something. Just making
things up seems to be very popular in the social sciences now. Here is some recent
just making things up in sociology,
and here is some recent just making things up in political
science. All of these examples share three things in common:
1.
They just made stuff up.
2.
It wasn’t that hard to see that they just made
things up.
3.
The all got glowing reviews or awards because
their conclusions confirmed the beliefs of the reviewers.
Of course, this isn’t really new
Tuesday, May 19, 2015
Sort of related to economic history
We just spent the weekend driving from Fredericksburg to St.
Louis and back (for Mary's parents 60th anniversary). We stayed a night in Louisville because we wanted to eat at 610 Magnolia. The meal was very good, but we
wished that there had been more Smoke
and Pickles. We stayed a few blocks away from the restaurant at the Culbertson Mansion on 3rd
Street, one of the many amazing homes built along that street in the 1880s and
1890s. Our brief stay made me curious about the economic history of Louisville,
particularly the Southern
Exposition.
In St. Louis, we discovered the Urban Chestnut Brewing Company. While
living in München in the summer of 1997 I discovered that I had a taste for weissbier, and Urban
Chestnut makes a very good one, though
Schneider Weisse is still my favorite. If you are in St. Louis, the food at
their Bierhall is also quite good.
Tuesday, May 12, 2015
Some big picture economic history
Robin Grier talks
with Marshall Poe about The Long Process
of Development: Building Markets and States in Pre Industrial England, Spain
and the Colonies her new book with Jerry Hough at the New Books Network.
She argues that state capability is an essential (though hard to develop)
ingredient for economic growth.
Sunday, April 26, 2015
Education, Economics and History
Here is a nice essay on the
benefits of higher education from the New York Times.
Also from the New York Times is Mankiw
on the economics of trade and the politics of trade.
Here is more
from Pseudoerasmus on cotton and economic growth, highlighting McCloskey’s argument
about the role of cotton in the Industrial Revolution.
Speaking of cotton and economic growth, The
Half Has Never Been Told won two awards last week. I feel like the boy who said
the emperor has no clothes, except I keep saying the Baptist has no evidence.
It is not a great work of history; it is not good
work of history, and it should be obvious to any historian who reads the book.
1.
Baptist misrepresents
the historiography of slavery and his references are often missing or misleading.
See also an
earlier post of mine and the recent post
by Pseudoerasmus
3.
Baptist does not make a pretense of using
evidence to support some of his conclusions. To me the most obvious problem,
one that even non-historians should be able to see, is the way that he
makes up an estimate of the economic importance of slavery. Many people
have suggested that the book shows how slavery was central to the development
of the American economy. That argument hinges on this calculation, and the
numbers in that calculation are clearly just made up. To me, this tendency to
just make things up is the most damning of the problems with the book. Although
it can’t be proven, I suspect that every book on history contains some error.
We all make mistakes. Consequently, problems with historiography, facts and
citation are matters of degree. It is difficult to say at what point such
mistakes start to raise doubts about the book as a whole. On the other hand,
making up numbers is not a mistake. It is not like misremembering a date, or
name, or citation. It demonstrates a fundamental disregard for the role of
evidence in historical argument.
Monday, April 13, 2015
What Is Capitalism?
S-USIH.org has the fourth of James Livingston’s essays on What
is Called History at the End of Modernity. among other tings, Livingston is interested
in recent assertions that slavery was capitalist. Like many of the people who have commented on the essay, I was
reminded of the debate between Brenner and Wallerstein in the 1970s, but I also
thought of this from Beckert’s Empire of Cotton
“In 1980 the Soviet
Union produced nearly 6 billion pounds of cotton, making it the world’s largest
producer after China. These stratospheric gains—production increased by about 70
percent between 1950 and 1966 alone—were only possible because of massive state
investments in irrigation, fertilizers and machinery.
Such recourse to the state in
postcolonial and postcapitalist societies was not a return to the war capitalism
of the eighteenth and early nineteenth centuries, but a sharpening of the tools
and enhancing of the methods of industrial capitalism.” (Empire of Cotton pages 435-36)
Maybe I am reading this the wrong way, but it seems to say
that the rapid growth of cotton production in the USSR and China was “a
sharpening of the tools and enhancing of the methods of industrial capitalism.”
It is not just slavery that is capitalist, communism is capitalist. If
communism is capitalism, is capitalism a useful category for the analysis of
economies?
Clearly, there is a place for the study of capitalism. If nothing else, we need
to try to understand how people have used the term in different places and
times. What is not clear is how useful it is as a tool to analyze economic
history.
In economics it seems to me that capitalism has largely gone
out of fashion as a useful category for analysis. Economists used to write
about capitalism on a regular basis (for example, Schumpeter’s Capitalism, Socialism and Democracy; Friedman’s
Capitalism and Freedom; and Williamson’s Economic Institutions of Capitalism). Many departments of economics offered courses
in Comparative Economic Systems that examined the differences between
capitalism, communism and socialism. Comparative economic systems courses went
out of fashion with the decline of communism. More generally, it wasn’t clear
that traditional notions of what capitalism were useful for understanding big
questions like growth and distribution. New
institutional economists generally seem to regard the old categories used in
comparative economic systems as inadequate.
Sunday, April 12, 2015
Standards of Accuracy in Historical Scholarship
At H-SHEAR Daniel Feller writes about Standards of Accuracy in Historical Scholarship in recent works by Johnson and Baptist and starts an interesting discussion.
Friday, April 10, 2015
Another Rant on Cotton and Growth
This is one of the reasons
why books like Empire of Cotton and The Half has Never Been Told irritate me
so much. People like Harold
Myerson start spreading their misinformation in newspapers like the Washington Post. Myerson writes that
“For much of the
20th century, the prevailing view of the North-South conflict was that it had
pitted the increasingly advanced capitalist economy of the North against the
pre-modern, quasi-feudal economy of the South. In recent years, however, a
spate of new histories has placed the antebellum cotton economy of the South at
the very center of 19th-century capitalism. Works such as “Empire of Cotton,” by Harvard historian Sven Beckert,
and “The Half Has Never Been Told,” by Cornell University
historian Edward E. Baptist, have documented how slave-produced cotton was the
largest and most lucrative industry in America’s antebellum economy, the source
of the fortunes of New York-based traders and investors and of British
manufacturers. The rise in profitability, Baptist shows, resulted in large part
from the increased brutalization of the slave work force.”
Was the prevailing
view that the South was quasi-feudal? No. Anyone who had read any economic
history in the last 60 years knew better.
Was slave produced cotton
the largest and most lucrative industry? No. Cotton was the largest export, but
not the largest product; both wheat and corn exceeded cotton in the value of
crops produced (based on estimates from De Bows Statistical View). Cotton
production amounted to about 4 % of GDP.
Have they
documented how slave produced cotton was the source of the fortunes of New York
based traders and investors? No. I think this will be rather difficult for them
to do. According to Albion’s Rise of New York
Port, in 1860 only $12.4 million worth of cotton was exported from New
York, while more than $96 million was exported from New Orleans, smaller
southern ports like Charleston and Savanah also exported more cotton than New
York. Cotton accounted for a small share of the more than $120 million in
exports from New York. Moreover the $233 million in imports that came through
New York dwarfed the value of exports from the port. In other words, cotton
accounted for a relatively small share of the shipping activity in New York. In
addition, while some New York investors no doubt profited from slavery, at
least some others saw slavery as a liability in financial markets. When Lewis
Curtis of the Farmers Loan and Trust Company wrote to the Rothschilds in June
1838, trying to interest them in bonds to finance railroad construction in Michigan,
he underlined that “it is a Free State and Slavery is prohibited.” I do not know that the Rothschilds cared, but
Curtis clearly thought they might. The bottom line is that we do not yet know
the extent to which fortunes of New York traders and investors were built on
cotton. So far, it has only been asserted; it has not been established with
evidence.
Maybe I am wrong,
but at least I will tell you what evidence I am basing my conclusions on.
Sunday, April 5, 2015
Cheap as Chips
An essay on open access from the blog of the Omohundro Institute.
" Debates about Open Access often take place at a level of abstraction that privileges not simply clichés about technology (“Information wants to be free”) and statements of moral principle (“Impeding the circulation of knowledge hinders human progress”) but also assertions about out-of-control costs. The comparator in these conversations, in short, is never an order of french fries. Instead, it’s the thousands upon thousands of dollars charged by commercial publishers for access to STEM journals. And fair enough. There are discussions that need to be had about access to scholarship and the transfer of resources from educational institutions to private companies. (For Karin’s recent contribution to those discussions, see her guest post on the Scholarly Kitchen blog.) But those conversations must also recognize that there are other realities out there."
" Debates about Open Access often take place at a level of abstraction that privileges not simply clichés about technology (“Information wants to be free”) and statements of moral principle (“Impeding the circulation of knowledge hinders human progress”) but also assertions about out-of-control costs. The comparator in these conversations, in short, is never an order of french fries. Instead, it’s the thousands upon thousands of dollars charged by commercial publishers for access to STEM journals. And fair enough. There are discussions that need to be had about access to scholarship and the transfer of resources from educational institutions to private companies. (For Karin’s recent contribution to those discussions, see her guest post on the Scholarly Kitchen blog.) But those conversations must also recognize that there are other realities out there."
Monday, March 23, 2015
Friday, March 20, 2015
Open Access and Predatory Publishing
“Although predatory publishers predate open access, their
recent explosion was expedited by the emergence of fee-charging OA journals. Monica
Berger and Jill
Cirasella argue that librarians can play an important role in
helping researchers to avoid becoming prey. But there remains ambiguity over
what makes a publisher predatory. Librarians can help to counteract the
misconceptions and alarmism that stymie the acceptance of OA.”
They have some valid points, but there is also much that I disagree
with. They spend too much time criticizing Jeffrey Beall for not being
sufficiently supportive of OA. In addition, they confuse the issue of low
quality and predatory. There are a lot of low quality journals out there, but
they do not charge large fees to publish papers on line, they do not advertise that
you can have your paper published in a month, they do provide some peer review
and editing. They do not face up to the costs of the rush to OA, especially
attempts to mandate publication in OA journals.
Open access is not the same thing as predatory. Open access
means that people can view a piece of scholarship without having to pay a fee,
either directly or indirectly through their school or employer. Predatory
journals exist to make money by selling false information. The false
information that they sell is that the papers in them have been published in a
peer reviewed journal. Academics pay the predatory publisher to say that their
paper has been published in a peer reviewed journal; the academics then put the
lie into their cvs and their annual activity reports and their tenure and
promotion files. After examining a number of these journals I am convinced that
it is all too easy tell legitimate publishers from predatory publishers. The
researchers that publish in these fake journals are not being preyed upon; the
people that are led to believe that these researchers are publishing in peer
reviewed journals are the prey. Beall’slist is really more of a tool for these people than it is for researchers.
Being open access does not prove that a journal is predatory.
Not being open access does not prove that a journal is not predatory. There is,
however, a connection between open access and predatory publishers. Legitimate
open access journals have created an opportunity for predatory publishers by
publishing online and charging fees. Predatory publishers mimic these features,
but, unlike traditional journals they have no incentive to provide peer review
and editing. Traditional journals have an incentive to engage in careful peer
review and editing. They need to get people to buy their journal. The articles
have to be good enough that universities, members of an association, or people
in the field will be willing to pay to read them. Predatory publishers have no
incentive to expend time and resources on peer review and editing. The last
thing they want is to have anyone read the articles. If you read something like this it
will only make it harder to tell people that you thought you were publishing in
a legitimate journal.
Personally, I do not see publication in traditional journals
as incompatible with open access. I noted in a previous post that I went
through a recent issue of The American Economic
Review and was able to find an open access, or ungated, version of every
paper. In addition, we were hiring this
year and pretty much everyone had a website with access to their job market
paper. There are often some differences between the “ungated” version of a
paper and published version of a paper; if you want to cite a paper you should
probably get access to the published version. But if the issue is simply access
to research results the ungated version will typically provide this. It seems
to me that this general approach existed in economics for a long time. Even
before widespread access to the internet economists distributed working papers.
Pretty much anyone who mattered had
probably read your paper years before it appeared in print. There may be reasons why this approach will
not work in some disciplines. There may even be reasons it will not continue to
work in economics, but advocates for open access journals need to acknowledge
the problems they give rise to and the possible alternatives.
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