bradford-delong.com: Grasping Reality with Both Hands 2017-01-18 00:44:28

Live from Massively Dysfunctional California Hall: I can think of nothing worse for alumni relations, development, and fund-raising in the long run than this kind of disruptive nickel-and-diming of students.

Harvard finally realized this: it got rid of the infamous "red dot". Berkeley has not. You don't have to have been dropped from your courses and be unable to get them back for this to matter. All you have to have is a roommate or a friend who was. And all of a sudden you are not in a long-term gift-exchange relationship with Berkeley any more...

In my inbox right now:

The CalCentral system dropped 145 students last night at midnight for nonpayment of fees. They were dropped from all of their classes. And if the class had a waitlist (as many of ours do), their seat was immediately given away to someone on the waitlist.

I've talked with 3 students already.... In two of the three cases, it was a CalCentral glitch, not a true non-payment of fees.... Please be sympathetic and help these students re-enroll in your course.

bradford-delong.com: Grasping Reality with Both Hands 2017-01-17 23:46:39

Live from Planet Gutenberg: The day's book haul. These both look very good. Unfortunately, the first day of classes is absolutely the last day you want your book showing up in my mailbox in the form of a review copy...

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James Kwak (2016): Economism: Bad Economics and the Rise of Inequality (New York: Pantheon: 1101871199) http://amzn.to/2k1yt3y

Daniel Wolff: Grown-Up Anger: The Connected Mysteries of Bob Dylan, Woody Guthrie, and the Calumet Massacre of 1913 (New York: Harper: 0062451693)http://amzn.to/2ixYJSP

Reading: Karl Marx and Friedrich Engels (1848): The Communist Manifesto

Karl Marx and Friedrich Engels (1848): The Communist Manifesto http://tinyurl.com/dl20161210h: This piece by Marx and Engels stands at the head of two traditions:

  1. the political tradition of world communism that was the second-greatest political catastrophe to ever afflict the human race...
  2. the intellectual tradition of the analysis of history as driven by modern capitalism--a historical-economic process...

You cannot separate these two. You should not try.

Read with an eye toward what is going to flourish in later intellectual and political history.

On the positive intellectual side, Marx and Engels were:

  1. Among the very first to get the industrial revolution right and understand what it meant for human possibilities and human destiny.
  2. Got a lot about the economic history of the development of modern capitalism in England right--very much worth grappling with as an economic historian of 1500-1850.
  3. Believed, probably wrongly, that a capitaliist market economy with wage labor is an insult to humanity, delivered low utility, and was sociologically and psychologically unsustainable.
  4. Believed, certainly wrongly that a capitalist market economy with wage labor was incapable of delivering an acceptable distribution of income.
  5. Among the very first to recognize that the fever-fits of financial crisis and depression that afflict modern market economies were not a passing phase but rather a deep and chronic malady of the system.

On the more negative side, we have Marx (and Engels) as activist-prophets:

  1. Technological progress and capital accumulation would raise labor productivity but lower the market real wage--hence the necessity for revolution.
  2. Globalization would raise inequality--hence the necessity for revolution.
  3. Previous systems of hierarchy and domination had hypnotized the poor, but capitalism replaced masked exploitation by naked exploitation--hence the possibility of revolution
  4. The ruling class would never buy off the working class by sharing the fruits of economic growth----hence the necessity for revolution.
  5. Factory work would lead people to develop a sense of their common interest and of class solidarity--hence the possibility of revolution.
  6. Nationalism would succumb to cosmopolitanism as the working classes of different nations realized how much they had in common.
  7. What is needed is not argument and evolution, but rather revolution--the overthrow and punishment of the oppressors.

This is worth paying attention to for its role in 20th century history.

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Housekeeping:

Econ 210b: Spring 2017: Announcement

Live from Evans Hall: I'm taking over Barry Eichengreen's "The Current Research Frontier: Great Recent Books in Non-American Economic History" course--Econ 210b--this semester...

I would ask those planning to show up on Tuesday please drop me a line--and also a book they want to read, if they have one.

Joachim Voth from Zurich visiting Haas will be joining us, and the book list still has a few spaces available...

Buildng Tools: Growth

Growth: Exponential, Convergent, Logistic: How much of this will my students this semester know? How much of this will I have to remind them? And how much of this will I have to teach them for the first time?


The Uses of Math

  • Muḥammad ibn Mūsā al-Khwārizmī (c. 780-850): Al-Kitāb al-Mukhtaṣar fī Hisāb al-Jabr wa’l-MuḳābalaThe Compendious Book on Calculation by Completion and Balancing
  • Isaac Newton (1642-1727): Philosophiæ Naturalis Principia MathematicaMathematical Principles of Natural Philosophy
  • Arithmetic and accounting
  • Algebra and calculus
    • What-if machines—ways of doing a huge number of potential calculations all at once…

Exponential Growth

  • dy/dt = g(y - a)
  • does nothing for a long time—stays very near a—then explodes
  • And keeps on exploding…
  • Rules of thumb for an annual growth rate g:
    • (y-a) doubles every 0.693/g years
    • (y-a) grows a thousandfold every 6.91/g years

Exponential Convergence

  • dy/dt = g(k - y)
  • heads rapidly for k
  • and then stays there
    • (k-y) halves in… guess what? 0.693/g
    • (k-y) shrinks to a thousandth of its initial value in… guess what? 6.91/g

Combine the Two: Logistic Growth

  • Math
    • dy/dt = g(y-a)(k-y)/k
    • y = a + (k-a)[exp(gx)]/(k-a+exp(gx)-1)
  • a is the initial population
  • k is the carrying capacity
  • g is the unimpeded growth rate (you’ll see this called “r”)
  • Pierre-Francois Verhulst in 1838, building a mathematical model of Thomas Malthus’ Essay on the Principal of Population
    • Rediscovered by McKendrick, by Pearl and Reed, and by Lotka

Logistic Growth: Things to Remember

  • Asymptote: a (in the negative direction, for growth and logistic)
  • Asymptote: k (in the positive direction, for convergence and logistic)
  • Rule of 72: 72 divided by the growth rate gives you the doubling (for growth) or halving (for convergence) time
  • Rule of 720: Multiply the doubling time by 10 to get the thousand-fold time
  • Why 72? Why not 0.693?
    • 72 is easier to do in your head
    • 72 = 36x2=24x3=18x4=12x6=9x8
    • If things aren’t continuous but come in steps…

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https://www.icloud.com/keynote/0GIwRdnkZgEVFuB0Jmj2EQn4Q#2017-01-14_Tools-Growth_.TCEH_.AEH

Reading: Robert Allen (2011): Global Economic History: A Very Short Introduction, chapter 1

Robert Allen (2011): Global Economic History: A Very Short Introduction (New York: Oxford: 0199596654), chapter 1 http://amzn.to/2iloEx6:

A lot goes by in a very small number of pages in this chapter:

  • The depth of global poverty in 1500
  • The magnitude of economic growth since 1500
  • The sequencing of economic growth since 1500
  • The divergence of economies since 1500
  • "Reversal of fortune"--the not rich so much as densely populated stay poor; (some of the) less densely populated become rich--with cultural distance from Manchester being the key
  • Exceptions to this general pattern
  • Clues to "why?"

There are two tables and four figures in the chapter. Study them. Memorize them. Internalize them:

  • GDP/capital, 1820-today
  • What bare-bones subsistence baskets consist of
  • Initial prosperity and growth since 1820
  • Percentage distribution of world manufacturing, 1750-2006
  • Laborer wages as a multiple of subsistence, six cities 1325-1875
  • Laborer wages as a multiple of subsistence, London and Beijing 1300-2000

This is the best short précis I have ever seen of "the facts" on global economic growth across time and space since 1500.

Cursor and James s Kindle for Mac 4 Global Economic History A Very Short Introduction Very Short Introductions

Cursor and James s Kindle for Mac 4 Global Economic History A Very Short Introduction Very Short Introductions

Cursor and James s Kindle for Mac 4 Global Economic History A Very Short Introduction Very Short Introductions

Cursor and James s Kindle for Mac 4 Global Economic History A Very Short Introduction Very Short Introductions

Cursor and James s Kindle for Mac 4 Global Economic History A Very Short Introduction Very Short Introductions Cursor and James s Kindle for Mac 4 Global Economic History A Very Short Introduction Very Short Introductions


Housekeeping:

Reading: Paul David (2005): Clio and the Economics of QWERTY

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These days a lot of energy and effort goes into user interface and user experience design.

And then we have the typewriter keyboard from 150 years ago.

It shows up in remarkably many places.

Is there any reason to think that it is in any sense the best way to lay out an alphabetical interface entry form?

No.

As you read your way through Paul David, look out for the ways he uses the following concepts:

  • path dependence
  • equilibrium
  • "free to choose"
  • lock-in
  • system compatibility
  • system scale economies
  • quasi-irreversibility
  • choices made myopically
  • "QWERTY worlds"

And three more questions:

  1. In the end, does it really matter?
  2. How could we figure out how much it matters, both in particular cases and in the general case?
  3. Which do you think will be the most spoken language in three centuries: English or Mandarin? Why?

Criticisms of Paul David:

  1. All of the research on the superiority of alternative keyboards that was published was done by people who had a strong interest in replacing QWERTY.
  2. You cannot prove that QWERTY is in any sense grossly inefficient.
  3. It must not matter very much or people would have changed it.

I have not yet found anything I can regard as a successful smart and good faith effort's to set out and document any of these three lines of criticism. Why is this so? Or, alternatively, am I wrong? Is one or more of these lines of criticism actually a devastating rebuttal to Paul David?

And how might we tell?


Housekeeping:

bradford-delong.com: Grasping Reality with Both Hands 2017-01-13 00:51:57

Cursor and 3225 22nd St Google Maps and Writers With Drinks spoken word variety show hosted by Charlie Anders Sara

Live from the Mission: Writers With Drinks: "Guest-hosted by Baruch Porras-Hernandez:

  • Sara Benincasa (Real Artists Have Day Jobs)
  • Jeff Chang (We Gon' Be Alright: Notes On Race and Resegregation)
  • Wendy C. Ortiz (Excavation: A Memoir, Hollywood Notebook)
  • Aya de Leon (Uptown Thief)
  • Jennifer Dronsky (Winner, Alameda Comedy Competition)
  • Antonio Garcia Martinez (Chaos Monkeys: Obscene Fortune and Random Failure in Silicon Valley)

Cost: $5 to $20, no-one turned away. All proceeds benefit the Center for Sex and Culture. At The Make Out Room 3225 22nd St., San Francisco CA, from 7:30 PM to 9:30 PM, doors open at 6:30 PM.

The Story of American Economic History

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Let me start this course about American economic history with a story:

This is a story about a guy born in the late 19th century, in 1879, on the prairie: his family's homestead was 17 miles from the nearest post office. In historical terms, The horse-riding nomads who had dominated the prairie had only recently been driven off by the guns of government soldiers. Agricultural settlement in one of the richest soil regions of the world was well advanced, but frontier life was still raw and uncivilized.

The kid was smart. So at the age of nine his parents decided to send him to the big city for school. He thus grew up in the bustling cosmopolitan big port city undergoing very rapid economic growth and industrialization as it processed and transported the grain and other exports of one of the most fertile agricultural regions of the world.

But the city was Odessa, not Chicago. He was Russian, not American. His name was Lev Davidovitch Bronstein--Lev is either Hebrew for "heart" or Russian for "lion"; Davidovitch is "son of the beloved one"; Bronstein is German or Yiddish for "stone well".

He did eventually wind up in the United States, after being arrested, jailed, and exiled four times; leading one unsuccessful revolution; and rising to the top of the Russian Social Democratic Labor Party. By then he was known as Leon Trotsky—a pseudonym he adopted in 1902 to try to throw the Czarist secret police—the Okhrana—off of his scent, supposedly the name of one of his Czarist jailers. By then he had lived in many places and seen a great deal of the world--Nikolayev, Kherson, Kiev, and Odessa in Ukraine; Moscow and St. Petersburg in European Russia; Alma-Ata in Kazakhstan; Ust-Kut in Siberia, Vienna, Geneva, and Paris, all before being deported from France to Spain and then Spain to New York, where he arrived on January 13, 1917.

But he did not stay in the United States for long. When the Kerenskyites overthrew the Romanov Czar Nikolai II in February 1917 to try to establish a democratic republic in Russia, Trotsky immediately sailed back to his country, departing from New York on March 27, 1917. He then took his place at Vladimir Lenin's right hand in the October Revolution and the construction of the Soviet Union before being purged, exiled, and murdered—stabbed with an ice pick by an NKVD agent soon after moving out of artist Frida Kahlo's house in Mexico City—by Josef Stalin. Russia was his country. Lenin was his friend, leader, and comrade. And Lenin's Majority—Bolshevik—faction of the Russian Social Democratic Labor Party was his cause.

However, later, in 1930 in his autobiography My Life, he would write that he left with regrets that his stay had been so short:

It would be a gross exaggeration to say that I learned much.... The Russian revolution came so soon that I only managed to catch the general life-rhythm of the monster known as New York. I was leaving for Europe, with the feeling of a man who has had only a peep into the foundry in which the fate of man is to be forged...

"The foundry where the fate of humanity is to be forged".

The then-38 year old Trotsky had seen more of the world and its history from more levels than all but a few, and had a brain and education that put him in the very select company of those who could try to grasp and understand it. And Trotsky's judgment was that he; in returning to St. Petersburg and Moscow was returning to a backwater: moving back to the past that was his country from where the future was being made every day.

And Trotsky was right. America has been--since 1776 and perhaps since 1630--the place where the future of humanity has been and is being hammered out. That is why its history--the study of what has happened here--is of general interest to humans wherever they live in the world, and will be of interest to humans long into the future.

Why did I start this lecture with this story?

Why didn't I just say: "America has been--since 1776 and perhaps since 1630--the place where the future of humanity has been and is being hammered out. That is why its history--the study of what has happened here--is of general interest to humans wherever they live in the world, and will be of interest to humans long into the future"; and omit the windup?

First, to stress that my judgment that the history of America is of general rather than parochial interest is shared by one of the smartest and most farsighted human beings of the twentieth century, and one whose politics and understanding of the world are very, very different from mine. My judgment is not mine alone--far from it.

Second, to try to keep you awake: We have here someone who should be sympathetic to you--a young, very smart, man on the make, upwardly mobile and trying to figure out what to do with his life. Plus we have travel, danger, imprisonment, revolution, and murder while reading in his study by a single blow in the back of his head from an ice pick wielded by the lover of his personal secretary and Russian NKVD agent Ramon Mercader.

Third, you won't remember "America has been--since 1776 and perhaps since 1630--the place where the future of humanity has been and is being hammered out. That is why its history--the study of what has happened here--is of general interest to humans wherever they live in the world, and will be of interest to humans long into the future". You will remember the story: You will remember that there was this interesting dude named Trotsky who had a very full life and to whom lots of things happened, and he thought the U.S. and its history was really important--so much so that he left New York to become Lenin's principal deputy and People's Commissar for Foreign Affairs in the Soviet government with some regret.

You see, we are narrative-loving animals. We like stories. It is how we think. We are jumped-up East African Plains Apes, only 3000 generations removed from those who first developed language, trying to understand the world as monkeys with, as Winnie-the-Pooh would say, "very little brain". We are lousy at remembering lists--that is why we need to write them down. We are not much good at retaining sets of information--unless we can, somehow, turn them into a journey or a memory palace. We are excellent, however, at remembering landscapes. And we are fabulous at stories: human characters with believable motivations; beginnings, middles, and endings; hubris and nemesis; cause and effect; villains and heroes.

To place ideas and lessons in the context of a story is a mighty aid to our thinking. And history and its narratives are how we do that.

That is the first BIG IDEA of this course: that you should study history because it is a mental force multiplier for your brain, and that disciplines that do not take a historical approach and ideas that do not admit of a narrative historical presentation are crippling themselves.

There are thirteen other BIG IDEAS to watch out for in this American economic history course. Yes, I know that is too many. Make a list and refer to it.

The BIG IDEAS are:


  1. We are animals that live by narrative—hence by history…
  2. There are three American nationalisms…
    • The City Upon a Hill: “Let it be as it was in New-England…”
    • A place where we can live freely…
    • “But here was Old Kentucky!”
  3. The American project has been astonishingly successful—in Trotsky’s words: “the furnace where the future is being forged…”
  4. But the American project has been much worse than shadowed by plantation slavery and its echoes down the centuries…
  5. One big contributor to the success of the American project has been immigration…
  6. American society has generated a large—in comparative context—but unevenly distributed quantum of liberty…
  7. American society used to deliver an unusually large quantum of opportunity—but not any more…
  8. American society has delivered an unprecedented and unequalled quantum of prosperity
  9. The story of industrialization requires focusing on growth-oriented industrial policy…
  10. The story of industrialization requires focusing on societal well being-oriented industrial policy…
  11. The story of opportunity and prosperity is the story of our two Gilded Ages: their rise, fall, and rise
  12. The apogee of American success is the mid twentieth century era of social democracy
  13. Society has moved from agriculture to industry to post-industrial services, and is now moving on to ?…
  14. Much of what has gone wrong with America can be traced to regional geography—and to the cultures that entrenched themselves in that geography…

Note: Want to learn more about Lev Bronstein--Leon Trotsky? IMHO, the best places to start are with two books: First, the relevant sections of Edmund Wilson (1940): To the Finland Station. Second, Leon Trotsky (1930): My Life.


Housekeeping:

Readings for Econ 115: 20th Century Economic History

Il Quarto Stato

Last chance to change any of them out. Are these the right readings? Which will fail in their task? What should I replace the ones that will fail with? What things I have not included must be added?

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