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Book(?) review: The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better, by Tyler Cowen.

Tyler Cowen wrote what looks like a couple of blog posts, and published them in book form.

The problem: US economic growth slowed in the early 1970s, and hasn’t recovered much. Median family income would be 50% higher if the growth of 1945-1970 had continued.

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Book review: Where Is My Flying Car? A Memoir of Future Past, by J. Storrs Hall (aka Josh).

If you only read the first 3 chapters, you might imagine that this is the history of just one industry (or the mysterious lack of an industry).

But this book attributes the absence of that industry to a broad set of problems that are keeping us poor. He looks at the post-1970 slowdown in innovation that Cowen describes in The Great Stagnation[1]. The two books agree on many symptoms, but describe the causes differently: where Cowen says we ate the low hanging fruit, Josh says it’s due to someone “spraying paraquat on the low-hanging fruit”.

The book is full of mostly good insights. It significantly changed my opinion of the Great Stagnation.

The book jumps back and forth between polemics about the Great Strangulation (with a bit too much outrage porn), and nerdy descriptions of engineering and piloting problems. I found those large shifts in tone to be somewhat disorienting – it’s like the author can’t decide whether he’s an autistic youth who is eagerly describing his latest obsession, or an angry old man complaining about how the world is going to hell (I’ve met the author at Foresight conferences, and got similar but milder impressions there).

Josh’s main explanation for the Great Strangulation is the rise of Green fundamentalism[2], but he also describes other cultural / political factors that seem related. But before looking at those, I’ll look in some depth at three industries that exemplify the Great Strangulation.

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Book review: Capital in the Twenty-First Century, by Thomas Piketty.

Capital in the Twenty-First Century is decent at history, mediocre at economics, unimpressive at forecasting, and gives policy advice that is thoughtfully adapted to his somewhat controversial goals. His goals involve a rather different set of priorities than I endorse, but the book mostly doesn’t try to persuade us to adopt his goals, so I won’t say much here about why I have different priorities.

That qualifies as a good deal less dumbed-down-for-popularity than I expected from a bestseller.

Even when he makes mistakes, he is often sufficiently thoughtful and clear to be somewhat entertaining.

Piketty provides a comprehensive view of changes in financial inequality since the start of the industrial revolution.

Piketty’s main story is that we’ve experienced moderately steady increases in inequality, as long as conditions remained somewhat normal. There was a big break in that trend associated with WW1, WW2, and to lesser extents the Great Depression and baby boom. Those equalizing forces (mainly decreases in wealth) seem unlikely to repeat. We’re back on a trend of increasing inequality, with no end in sight.

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Book review: The Book of Why, by Judea Pearl and Dana MacKenzie.

This book aims to turn the ideas from Pearl’s seminal Causality into something that’s readable by a fairly wide audience.

It is somewhat successful. Most of the book is pretty readable, but parts of it still read like they were written for mathematicians.

History of science

A fair amount of the book covers the era (most of the 20th century) when statisticians and scientists mostly rejected causality as an appropriate subject for science. They mostly observed correlations, and carefully repeated the mantra “correlation does not imply causation”.

Scientists kept wanting to at least hint at causal implications of their research, but statisticians rejected most attempts to make rigorous claims about causes.

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Experts have been debating the causes of the industrial revolution for a long time, with few signs of agreement. I suggest that’s due to a human-centric bias which assumes that no other species could have caused human progress.

I became curious after reading that, while dogs were domesticated, cats intermixed with humans while showing few signs of domestication. Cats have cooperated with humans for long enough that I’d expect at least a little bit of co-evolution. If it wasn’t the humans selecting for the most docile or friendly cats, then maybe it was the cats selecting for the most docile or friendly humans.

One interesting hint is that various human cultures tell different stories about how many lives a cat has. As far as I can tell, the cultures that were most advanced in the 18th century (Britain, China) say cats have 9 lives, the more southern parts of Europe say 7, and Arab cultures say 6. That’s a fairly striking correlation between how highly cultures think of cats and how prospurrous they were near the start of the industrial revolution.[1]

People feed me, shelter me and love me ... I must be God

The hardest aspect of explaining the industrial revolution is explaining why the China’s level of development around 1800 didn’t enable it to lead the world. Why did Europe do better than China? Britain seems to have stopped eating cats sometime in the 18th century, while cat-eating has only started to become controversial in southern China this century. I’m less sure what the story is for northern China, where cat-eating apparently doesn’t happen today, but I haven’t found evidence about when cat-eating became unpopular there. Southern China is the region that’s generally said to have been advanced enough that it could have experienced an industrial revolution around 1800. Maybe northern China was backwards then for reasons unrelated to cats, maybe they were held back by their cat-eating southern compatriots, or maybe they adopted a cat-safe culture quite recently – could that have been the change that triggered China’s impressive growth over the past 40 years? Can anyone point me to better evidence on this topic?

Another possible reason for China’s lag is that a completely different species of cat (the leopard cat, Prionailurus bengalensis) acted as “pets” in China about 5000 years ago. Felis catus may have pawsed their human domestication plans in China due to distractions from their struggles with the leopard cat.

I can imagine many strategies that the cats could have used to purr-suade humans to change:

  • Cats probably have some influence over who the spread diseases to.
  • They could influence human mating choices, by causing distractions when “bad” humans court each other, versus purring peacefully when “good” humans court.[2]
  • Cat “ownership” can show trustworthiness, once cats establish conditions under which humans recognize cats as high status and/or recognize that cat-friendliness implies a person is less prone to pointless conflict. Cats exert some influence on who they associate with, and they can use that to increase the status of “good” humans, and/or increase the mating opportunities of “good” humans.
  • They could influence which areas have more or less rodents, thereby causing “bad” villages to have more food eaten by rodents than was he case with “good” villages.
  • Eating rodents protected nearby humans from diseases spread by rodents. This was especially important during the black plague.

What benefits would the cats have been selecting for?

I presume an important part of their plan would have been selecting for a wider moral circle, since that would make humans safer for cats to live near.

A wider moral circle is correlated with higher trust, and lower violence. These are likely important for cooperation among groups that are much larger than the Dunbar number. See Fukuyama for more on why that mattered.

So, regardless of whether cats planned to advance human civilization, or were merely protecting themselves, their interests in domesticating humans helped generate conditions that were conducive to an industrial revolution.

[1] – A more exotic version of this story is that we’re living in a simulation, and cats are the avatars of the beings who run the simulation. They’re arrogant enough to taunt us by reusing the same avatar just enough for humans to suspect something, but they stop before leaving enough evidence for anything to be proven.

[2] – I don’t want to express any opinion here about the nature-nurture debate, since there are many ways in which cats could have changed human behavior, and I have little hope of tracking down enough evidence to show which strategies the cats actually used. Feline influence on mating could achieve its results via genetic selection – that would require unusual patience, but produce the most stable results. Or the cats could have focused on making the good humans higher status, and the bad humans lower status – that could potentially produce faster results, but is more likely to depend on continuing feline manipulations of human culture.

See also the book A Farewell to Alms for a more detailed argument that British society has long been subjected to selection pressure which made it ripe for the industrial revolution. Alas, it neglects cats.

[Another underwhelming book; I promise to get out of the habit of posting only book reviews Real Soon Now.]

Book review: Seeing like a State: How Certain Schemes to Improve the Human Condition Have Failed, by James C. Scott.

Scott begins with a history of the tension between the desire for legibility versus the desire for local control. E.g. central governments wanted to know how much they could tax peasants without causing famine or revolt. Yet even in the optimistic case where they got an honest tax collector to report how many bushels of grain John produced, they had problems due to John’s village having an idiosyncratic meaning of “bushel” that the tax collector couldn’t easily translate to something the central government knew. And it was hard to keep track of whether John had paid the tax, since the central government didn’t understand how the villagers distinguished that John from the John who lived a mile away.

So governments that wanted to grow imposed lots of standards on people. That sometimes helped peasants by making their taxes fairer and more predictable, but often trampled over local arrangements that had worked well (especially complex land use agreements).

I found that part of the book to be a fairly nice explanation of why an important set of conflicts was nearly inevitable. Scott gives a relatively balanced view of how increased legibility had both good and bad effects (more efficient taxation, diseases tracked better, Nazis found more Jews, etc.).

Then Scott becomes more repetitive and one-sided when describing high modernism, which carried the desire for legibility to a revolutionary, authoritarian extreme (especially between 1920 and 1960). I didn’t want 250 pages of evidence that Soviet style central planning was often destructive. Maybe that conclusion wasn’t obvious to enough people when Scott started writing the book, but it was painfully obvious by the time the book was published.

Scott’s complaints resemble the Hayekian side of the socialist calculation debate, except that Scott frames in terms that minimize associations with socialism and capitalism. E.g. he manages to include Taylorist factory management in his cluster of bad ideas.

It’s interesting to compare Fukuyama’s description of Tanzania with Scott’s description. They both agree that villagization (Scott’s focus) was a disaster. Scott leaves readers with the impression that villagization was the most important policy, whereas Fukuyama only devotes one paragraph to it, and gives the impression that the overall effects of Tanzania’s legibility-increasing moves were beneficial (mainly via a common language causing more cooperation). Neither author provides a balanced view (but then they were both drawing attention to neglected aspects of history, not trying to provide a complete picture).

My advice: read the SlateStarCodex review, don’t read the whole book.

Book review: State, Economy, and the Great Divergence: Great Britain and China, 1680s – 1850s, by Peer Vries.

Yet another book on why Britain and China diverged dramatically starting around 1800. This one focuses on documenting the differences between the regions, with relatively little theorizing.

Some interesting differences of possible relevance to the divergence:

  • British per capita tax collections were 15 times China’s [1]; Vries emphasizes the underlying British bureaucratic competence.
  • Britain changed its tax rules often; China treated tax rules as if set in stone.
  • British tax policy caused it to promote standardization of a wide variety of weights and measures, which helped long-distance trades; China had nothing similar.
  • Britain’s taxation was more egalitarian than China’s (but still much less egalitarian than today).
  • British government debt looked recklessly high; China consistently had a surplus.
  • British elites wanted to keep the masses poor (to make them industrious); China’s elites seemed neutral or had slight preferences for the poor to prosper.
  • Most British workers were nearly slaves – laws restricted their mobility due to the expectation that most who left their area of work were beggars/thieves; China was less restrictive.
  • Britain condoned or supported powerful monopolies; China broke up concentrations of merchant power / capital under the assumption that they came at the expense of ordinary people.
  • Britain had three times as much farm land per capita as China.
  • Britain was more urban, so it had more commercial / monetary activity.
  • China denied that anything outside its borders mattered. Britain had a fairly global worldview.

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Book review: Political Order and Political Decay, by Francis Fukuyama.

This book describes the rise of modern nation-states, from the French revolution to the present.

Fukuyama focuses on three features that influence national success: state (effective bureaucracy), rule of law, and autonomy (democratic accountability).

Much of the book argues against libertarian ideas from a fairly centrist perspective, although he mostly avoids directly discussing libertarian beliefs. Instead, he implies that we should de-emphasize debates over big government versus small government, and look more at effectiveness versus corruption (i.e. we should pull sideways).

Many of these ideas build on what Fukuyama wrote in Trust – I suggest reading that book first.

1.

War! What Is It Good For?. Fukuyama believes that war sometimes causes states to make their bureaucracy more efficient. Fukuyama is more credible here than Morris because Fukuyama is more cautious about the effects he claims to see.

The book suggests that young nations have some key stage where threat of conquest can create the right incentives for developing an efficient bureaucracy (i.e. without efficient support for the military, including effective taxation, they get absorbed into a state that does better at those tasks). Without such a threat, states can get stuck in an equilibrium where the bureaucracy simply serves a small number of powerful people. But with such a threat, politicians need to delegate enough authority that the bureaucracy develops some independence, which enables it to care about broader notions of national welfare. (Fukuyama talks as if the bureaucracies are somewhat altruistic. I think of it more as the bureaucracies caring about their long-term revenue source, when individual politicians don’t hold power long enough to care about the long term).

It seems plausible that China would have helped to lead the industrial revolution if it had faced a serious risk of being conquered in the 17th and 18th centuries. China’s relative safety back then seems to have left it complacent and stagnant.

2.

Fukuyama hints that the three pillars of modern nation-states (state, law, autonomy) have roughly equal importance.

Yet I don’t buy that. I expect that whatever virtues are responsible for the rule of law are a good deal more important than effective bureaucracies or democratic accountability.

Fukuyama doesn’t make a strong case for the value of democracy for national success, presumably in part because he expects most readers to already agree with him about that. I’ll conjecture that democracy is mostly a byproduct of success at the other features that Fukuyama considers important.

It’s likely that democracy is somewhat valuable for generating fairness, but that has limited relevance to what Fukuyama tries to explain (i.e. mainly power and wealth).

3.

Full-fledged rule of law might be needed to get all the benefits of the best modern societies. But the differences between good and bad nations seems to have originated well before those nations had more than a rudimentary version of rule of law.

That suggests some underlying factor that matters – maybe just the basic notion of law as something separate from individual leaders or ethnic groups (Fukuyama’s previous book says Christianity played an important role here); or maybe the kind of cultural advance suggested by Greg Clark.

Fukuyama argues that it’s risky to adopt democracy before creating effective states and the rule of law. He’s probably right to expect that such democracies will be dominated by people who fight to get the spoils of politics for their family / clan / ethnic group, with little thought to national wellbeing.

4.

National identity is important for producing the kind of government that Fukuyama likes. It’s hard for government employees to focus on the welfare of the nation if they identify mainly as members of a non-majority ethnic group.

He mentions that the printing press helped create national identities out of more fragmented cultures. This seems important enough to Europe’s success that it deserves more emphasis than the two paragraphs he devotes to it.

He describes several countries that started out as a patchwork of ethnic groups, and had differing degrees of success at developing a unified national identity: Tanzania, Kenya, Nigeria, and Indonesia. I was a bit disappointed that the differences there seemed to be mostly accidents of the personalities of leading politicians.

He talks as if the only two options for such regions were to develop a clear national identity or be crippled by ethnic conflict. Why not also consider the option of splitting into smaller political units that can aim to become city-states such as Singapore and Dubai?

5.

He makes many minor claims that sound suspicious enough for me to have moderate doubts about trusting his scholarship.

For example, he tries to refute claims that “industrial policy never works”, mainly by using the example of the government developing the internet. (His use of the word “never” suggests that he’s not exactly attacking the most sophisticated version of the belief in question). How familiar is he with the history of the internet? The entities in charge of internet tried to restrict commercial use until 1995. Actual commercial use of the internet started before the government made a clear decision to tolerate such use, much less endorse it. So Fukuyama either has a faulty understanding of internet history, or is using the phrase industrial policy in a way that puzzles me.

Then there’s the claim that the Spanish conquered important parts of the New World before the native nations had declined due to European diseases. Fukuyama seems unfamiliar with the contrary evidence reported by Charles C. Mann in 1491 and 1493. Mann may not be an ideal source, but he appears at least as reliable as the sources that Fukuyama cites.

6.

That leads into more general doubts about history books, especially ambitiously broad books aimed at popular audiences.

Tetlock’s research into the accuracy of political pundits has led me to assume that a broad range of “expert” commentary is roughly equivalent to random guessing. Much of what historians do [1] seems quite similar to the opinions of the experts that Tetlock studies. Neither historians nor political pundits get adequate feedback about mistaken beliefs, or get significant rewards for insights that are later confirmed by new evidence. That leads me to worry that the study of history is little better than voodoo.

7.

In sum, I can’t quite decide whether to recommend that you read this book.

[1] – I.e. drawing inferences from aggregations of data. That’s not to say that historians don’t devote lots of time to reporting observed facts. But most of those facts don’t have value to me unless I can generalize from them in ways that help me understand the future. Historian’s choices of what facts to emphasize will unavoidably influence any generalizations I draw.

Book review: The Midas Paradox: Financial Markets, Government Policy Shocks, and the Great Depression, by Scott B Sumner.

This is mostly a history of the two depressions that hit the U.S. in the 1930s: one international depression lasting from late 1929 to early 1933, due almost entirely to problems with an unstable gold exchange standard; quickly followed by a more U.S.-centered depression that was mainly caused by bad labor market policies.

It also contains some valuable history of macroeconomic thought, doing a fairly good job of explaining the popularity of theories that are designed for special cases (such as monetarism and Keynes’ “general” theory).

I was surprised at how much Sumner makes the other books on this subject that I’ve read seem inadequate.
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Book review: Foragers, Farmers, and Fossil Fuels: How Human Values Evolve, by Ian Morris.

This book gives the impression that Morris had a halfway decent book in mind, but forgot to write down important parts of it.

He devotes large (possibly excessive) parts of the book to describing worldwide changes in what people value that correlate with the shifts to farming and then industry.

He convinces me that there’s some sort of connection between those values and how much energy per capita each society is able to use. He probably has a clue or two what that connection is, but the book failed to enlighten me about the connection.

He repeatedly claims that each age gets the thought that it needs. I find that about as reasonable as claiming that the widespread malnutrition associated with farming was what farming cultures needed. Indeed, his description of how farming caused gender inequality focuses on increased ability of men to inflict pain on women, and on increased incentives to do so. That sounds like a society made worse off, not getting what it needs.

He mentions (almost as an afterthought) some moderately interesting models of what caused specific changes in values as a result of the agricultural revolution.

He does an ok job of explaining the increased support for hierarchy in farming societies as an effect of the community size increasing past the Dunbar Number.

He attributes the reduced support for hierarchy in the industrial world to a need for interchangeable citizens. But he doesn’t document that increased need for interchangeability, and I’m skeptical that any such effect was strong. See The Institutional Revolution for a well thought out alternative model.

I had hoped to find some ideas about how to predict value changes that will result from the next big revolution. But I can’t figure out how to usefully apply his ideas to novel situations.

See also Robin Hanson’s review.