July 11, 2018

Posted by orrinj at 1:35 PM


Why Productivity Isn't Keeping Up With Technology (Peter R. Orszag, July 11, 2018,  Bloomberg)

The disconnect between productivity growth and the technology revolution has triggered a sharp debate in economics. A scintillating new paper by Adair Turner of the Institute for New Economic Thinking suggests that rather than presenting a puzzle, the combination of technological innovation and low measured productivity growth is exactly what we should expect.  [...]

 He writes that "it is quite possible that an acceleration in underlying technological progress, which allows us to achieve dramatic productivity improvement in existing production processes, can be accompanied by a decline in total measured productivity." 

In other words, there is really no puzzle to explain.

The core of Turner's argument is that the impact of new technology on total productivity growth depends crucially on who accrues the income from the new inventions; what additional consumption they choose to enjoy with that income; and the nature of productivity advances in the sectors that workers are shifted into as a result. In particular, if those who directly accrue income from the new inventions choose to consume more services (such as personal services or artistic ones) that are hard to automate, the net result could be the coexistence of rapid technological progress and slow or nonexistent overall productivity growth.

So technological progress and productivity growth have tended to coexist in the past because the workers shifted as a result of the new technologies moved from one sector (say, farming) to another (manufacturing) and in both the sender and recipient sector rapid productivity growth was occurring.

What would happen, though, if the recipient sectors suffer from "Baumol's disease," which features limited potential for productivity improvements because it is hard to replace people with machines in those areas? Then, aggregate productivity growth will not march in lockstep with technological progress. 

Furthermore, as our incomes rise, we may demand more services with Baumol's disease characteristics. The employment projections from the Bureau of Labor Statistics highlight the point. The top four occupations ranked by the number of new jobs projected to be created between 2016 and 2026, for example, are personal care aides, cooks and servers, registered nurses and home health aides. In all four cases, the service provided involves person-to-person interactions that are, at least for now, difficult to automate. That means productivity explosions are unlikely, whatever is happening in the rest of the economy.

Posted by orrinj at 1:07 PM


Soccer Is a Fundamentally Flawed Game (RICH LOWRY, July 10, 2018, National Review)

The problem from my amateur's point of view is that the regular action in soccer can't be relied on to create scoring. So a lot of it happens as a result of interruptions in play and referee calls -- on corner kicks, free kicks, and penalty kicks.

I watched some of the Russia-Croatia game last weekend (which did have a thrilling finale), and the announcer kept saying after a goal something like: AND ANOTHER BIG SET PIECE IN THIS WORLD CUP! Well, yeah. When else does something happen? This creates the incentive for players to flop and pretend they've just gotten shot in the leg. If a referee falls for it, the tactic might change soccer history.

And then there are the penalty kicks. They have much too much of an element of randomness since the goaltender has to guess which way to jump. This is absurd and makes ending a tied game on penalty kicks a travesty.

The World Cup of Set Pieces: How Teams Are Living Off Dead-Ball Plays (GRANT WAHL, July 10, 2018, Sports Illustrated)

Set pieces fueled deep World Cup runs for England and Uruguay, to say nothing of Russia 2018 itself. Through the quarters, 30% of the tournament's goals had come on free kicks and corners, outpacing the previous high of 23% (in '02 and '06) among the five most recent men's World Cups.

Even in the unwatchable NBA, free throws only account for about 16% of scoring.  The problem is not just that the scoring comes from stoppages in play but that it makes officiating such an integral part of the game. 

Posted by orrinj at 1:06 PM


Posted by orrinj at 4:35 AM


Is Lab-Grown Meat Really Meat? (ROSE EVELETH, JULY 11, 2018, Slate)

After centuries of a veritable monopoly, meat might have finally met its match. The challenger arises not from veggie burgers or tofu or seitan, but instead from labs where animal cells are being cultured and grown up into slabs that mimic (or, depending on whom you ask, mirror) meat. It currently goes by many names--in-vitro meat, cultured meat, lab-grown mean, clean meat--and it might soon be vying for a spot in the cold case next to more traditionally made fare. To put it bluntly: the kind that comes from living animals, slaughtered for food.

Cultured-meat manufacturers like Just Inc. and Memphis Meats are hoping to provide consumers with meat that is just like its predecessor, that tastes and looks and feels and smells exactly the same as something you might get in stores today but will be more sustainable. Whether that will turn out to be true won't be clear for some time. But there's another, more immediate battle heating up between the cattle industry and these new entrants into the meaty ring. So buckle up and put on your wonkiest hat, because the labeling war is about to begin.

In February, the U.S. Cattlemen's Association wrote a petition to the U.S. Department of Agriculture, asking the government to ban cultured-meat companies from using the terms meat and beef at all.

Posted by orrinj at 4:06 AM


Posted by orrinj at 4:05 AM


GOP Senators Tell Contradictory Stories About Moscow Trip (Andrew Desiderio, 07.10.18, Daily Beast)

A top Republican senator shocked his colleagues when he suggested, after returning from a trip to Moscow with fellow GOP lawmakers, that U.S. sanctions targeting Russia were not working and the Kremlin's election interference was really no big deal.

Now, the senators who joined him for the series of meetings with senior Russian officials are sharply disputing not only Sen. Ron Johnson's (R-WI) conclusions--but also his account of what went on behind closed doors in Moscow.

Posted by orrinj at 4:01 AM


Secular Materialism Can't Make Sense of Reality (Justin Dyer, July 10th, 2018, Public Discourse)

Setting aside whether the concept of good is meaningful in this context, let us note that the problem was acknowledged in Western theology and jurisprudence before neuroscientists began studying the brain. Biblical commentators, for example, have long interpreted one of the consequences of the fall of man to be humanity's tendency to elevate material reality as the ultimate or highest source of meaning. As R.R. Reno writes in his recent commentary on Genesis, synthesizing the insights of classical Jewish, Catholic, and Protestant interpreters, "When the eye of the soul becomes carnal, taking the physical and finite as the measure of all things, the testimony of creation awakens a sense of shame. We know ourselves pursuing a futile life-project--even as we commit ourselves to its futility." Smilansky and others, of course, might see this tradition as useful nonsense. Tabling that question, we can say that people have long been aware of the disheartening implications of a worldview that makes the physical and finite the measure of all things, and it arguably is our deep longing for the infinite and immortal that leads us to be disheartened.

In light of this unease, and the disparity between materialism and experiential reality, the practical question for us today is what it would take for the people who control the key institutions in our society to embrace the old idea that we are rational animals capable of making decisions fraught with moral consequence. So long as our choices are entirely determined by physical causes, however, freedom is an illusion. If freedom is an illusion, then nothing is right or wrong, since unavoidable necessity is not a moral category. The practical stakes for how we answer these abstract questions are high. In one of his best and most reflective essays on this topic, Lewis observed:

The very idea of freedom presupposes some objective moral law which overarches rulers and ruled alike. Subjectivism about values is eternally incompatible with democracy. We and our rulers are of one kind only so long as we are subject to one law. But if there is no Law of Nature, the ethos of any society is the creation of its rulers, educators and conditioners; and every creator stands above and outside his own creation.

Lewis's observation does not mean the natural law exists (although he of course thought it did). His narrower point is that the idea of natural law is essential to the idea of freedom, because, as he wrote elsewhere, it provides the foundation of "a rule which is not tyranny or an obedience which is not slavery."

In the modern world, some have been tempted to dispense with the metaphysical baggage of the natural-law tradition, but without metaphysics we are left simply with physics, and physics is about power, leverage, and force. If power is all there is, then everything is about power, including the arguments we engage in as academics. The alternative to reason is strength: it has always been the alternative. In the reigning worldview of many intellectuals, material nature in an endless chain of cause-and-effect necessitates all human action. The strong rule, as must be the case, but strong can also mean clever, if cleverness helps one gain power. For this reason, many academics see law and public discourse as little more than linguistic power struggles, necessitated in advance by the course of matter.

It is a grim worldview that cannot give a coherent account of many of the fundamental concepts at the base of our law and politics, and cannot account for our actual lived experiences in the world. "Everyone knows," as the late Peter Lawler wrote, "that physics can't explain the physicist." Physics, by itself, simply explains away the physicist--and much else. The older theological and metaphysical view gave us two basic things that so far we have not been able to recover: a confidence in practical reason and a belief in freedom. Both grew out of a deeper philosophical anthropology that understood human beings as rational animals unique in their capacity to deliberate about the standards of justice rooted in human nature.

Materialists give away the game when they complain if you punch them in the face.

Posted by orrinj at 3:56 AM


US Tariffs Hurt Americans More Than Anyone Else (Walter E. Williams, 7/10/18, Daily Signal)

Guess what tariffs on Canadian lumber do to home prices. If you answered that they raise the cost and American homebuyers are forced to pay higher prices, go to the head of the class.

This retaliation policy is both cruel and not very smart. It's as if you and I were in a rowboat out at sea and I shot a hole in my end of the boat.

What should be your response?

If you were Secretary of Commerce Wilbur Ross or Secretary of the Treasury Steven Mnuchin, you might advise retaliating by shooting a hole in your end of the boat.

If I were president, I'd try to persuade officials of other countries not to serve special producer interests by forcing their citizens to pay higher prices. But if they insisted, I'd say, "Go ahead, but I'll be damned if I'll do the same to Americans!"

The ruse used to promote producer interests through tariff policy is concern about our large trade deficit. It's true that we have a large current account trade deficit. However, that's matched exactly by a very large capital account surplus.

Translated, that means Americans buy more goods from other countries than they buy from us; that's our current account deficit. But other countries find our investment climate attractive and invest more in the U.S. than we invest in other countries; that's our capital account surplus.