Sat, 19 May 2018
Phil Magness returns to the podcast to discuss the life and work of James Buchanan and to defend him against some of the more bizarre criticisms levied against him.
James Buchanan was a Chicago-school economist who created the field of public choice economics along with Gordon Tullock. He was awarded the Nobel prize in 1986.
Buchanan has received criticism recently from Duke historian Nancy MacLean, whose book Democracy in Chains places Buchanan at the center of a grand right-wing conspiracy to maintain segregation and undermine democratic institutions. Phil shows that the theory of Buchanan as a segregationist falls apart under scrutiny. It all stems from a typo in a footnote that erroneously placed Buchanan's article on school choice in a segregationist newspaper (the Richmond News-Leader) when in fact the article was published in the competing (and not segregationist) Richmond Times-Dispatch.
Fri, 4 May 2018
This week's episode is a little different. There's an ongoing controversy related to a two-time guest of this show, Robin Hanson. I talk through the scandal, giving a whole decade of background so you can understand where this scandal comes from.
There are many links for this episode. Here they are in the order they are discussed:
"Unequal Beauty Silence" October 19, 2009
"Pretty Smart Healthy Privilege" September 26, 2014
"Inequality Talk Is About Grabbing" August 7, 2013
"Two Types of Envy" April 26, 2018
"Why Economics Is, And Should Be, Creepy" May 2, 2018
Fri, 27 April 2018
Andrea Matranga of the New Economics School in Moscow joins the podcast with a fascinating question: Why did humans adopt agriculture in the times and places they did? His research paper, The Ant and the Grasshopper: Seasonality and the Invention of Agriculture, offers a potential solution. Here's the abstract:
During the Neolithic Revolution, seven populations independently invented agriculture. In this paper, I argue that this innovation was a response to a large increase in climatic seasonality. Hunter-gatherers in the most affected regions became sedentary in order to store food and smooth their consumption. I present a model capturing the key incentives for adopting agriculture, and I test the resulting predictions against a global panel dataset of climate conditions and Neolithic adoption dates. I find that invention and adoption were both systematically more likely in places with higher seasonality. The findings of this paper imply that seasonality patterns 10,000 years ago were amongst the major determinants of the present day global distribution of crop productivities, ethnic groups, cultural traditions, and political institutions.
Figure 2 in the paper illustrates the locations and times of the adoption of agriculture:
Andrea looks at both these adoption dates and the rapidity of the spread of agriculture from these locations and compares them to the climatic seasonality of those locations, finding a strong connection between seasonality and adoption of agriculture. He argues that the need to store food caused people to become sedentary as opposed to nomadic, and once they were sedentary the opportunity cost of farming was greatly reduced.
Sat, 21 April 2018
My guest today is Ryan Muldoon of the University at Buffalo. He is the author of Social Contract Theory for a Diverse World: Beyond Tolerance.
We discuss the role of perspective diversity in political philosophy, with reference to both Ryan's book and his article, Diversity and Disagreement are the Solution, Not the Problem. We relate the philosophy to political divides in the real world, such as the rise of nationalist movements in Europe.
Sat, 14 April 2018
The assiduous Vincent Geloso returns to the podcast to discuss his work with Rosolino Candela on lightships and their importance in economics. The abstract of their paper reads as follows:
What role does government play in the provision of public goods? Economists have used the lighthouse as an empirical example to illustrate the extent to which the private provision of public goods is possible. This inquiry, however, has neglected the private provision of lightships. We investigate the private operation of the world’s first modern lightship, established in 1731 on the banks of the Thames estuary going in and out of London. First, we show that the Nore lightship was able to operate profitably and without government enforcement in the collection of payment for lighting services. Second, we show how private efforts to build lightships were crowded out by Trinity House, the public authority responsible for the maintaining and establishing lighthouses in England and Wales. By including lightships into the broader lighthouse market, we argue that the provision of lighting services exemplifies not a market failure, but a government failure.
Economists have been using lighthouses as examples of pure public goods since at least John Stuart Mill. This modern debate on whether lighthouses really deserve their status as the archetypical example goes back to Coase (1974), who pointed out that many lighthouses in Great Britain had been privately funded through harbour fees. According to the theory of pure public goods, free riding should have destroyed this market, but it didn't. This has sparked a spirited debate about just how private those "private" lighthouses were, and whether the level of government intervention in the lighthouse market was necessary to solve the free rider problem.
Candela and Geloso's work on lightships shows that a pure private solution to the lighthouse problem actually existed historically. They detail the launching of the first lightship by the entrepreneurs David Avery and Robert Hamblin at the mouth of the Thames River in 1731, and the ways they were able to finance this apparently "public" good.
Fri, 6 April 2018
My guest for this episode of Economics Detective Radio is Bart Wilson of Chapman University. He is the author of many experimental economics studies. Our conversation today focuses on one particular study entitled Language and cooperation in hominin scavenging. The abstract reads as follows:
Bickerton (2009, 2014) hypothesizes that language emerged as the solution to a scavenging problem faced by proto-humans. We design a virtual world to explore how people use words to persuade others to work together for a common end. By gradually reducing the vocabularies that the participants can use, we trace the process of solving the hominin scavenging problem. Our experiment changes the way we think about social dilemmas. Instead of asking how does a group overcome the self-interest of its constituents, the question becomes, how do constituents persuade one another to work together for a common end that yields a common benefit?
You can view a video demonstration of the experimental software here. The animation is quite cute!
Derek Bickerton is the linguist whose theories Bart referenced in this episode.
Sat, 31 March 2018
My guests for this episode are Alex Nowrasteh and Andrew Forrester of the Cato Institute. Our topic is a working paper they recently published titled How Mass Immigration Affects Countries with Weak Economic Institutions: A Natural Experiment in Jordan. The abstract reads as follows:
Saddam Hussein’s unexpected 1990 invasion of Kuwait forced 300, 000 Kuwaitis of Palestinian descent to flee into Jordan. By 1991, this large exogenous population shock increased Jordan’s population by about 10 percent. Jordanian law allowed these refugees to work, live, and vote in Jordan immediately upon entry. The refugees did not bring social capital that eroded Jordan’s institutions. On the contrary, we find that Jordan’s economic institutions substantially improved in the decade after the refugees arrived. Our empirical methodology employs difference-in-differences and the synthetic control method, both of which indicate that the significant improvement in Jordanian economic institutions would not have happened to the same extent without the influx of refugees. Our case study indicates that the refugee surge was the main mechanism by which Jordan’s economic institutions improved over this time.
Does mass immigration destroy institutions? 1990s Israel as a natural experiment by Benjamin Powell, J.R. Clark and Alex Nowrasteh
Jared Rubin's interview about political power and economic growth is complementary with this one. Rubin's theory is that the rising political influence of the bourgeoisie partially caused the economic growth in Northwestern Europe in the early modern period. In Jordan in 1990, the Palestinian minority was particularly urban and bourgeois, so the massive influx of Palestinians increased the political power of the bourgeoisie, thus creating political pressure for increasing economic freedom.
Fri, 23 March 2018
Phil Magness returns to the podcast to discuss the public choice economics of universities. We discuss the internal politics of universities, their rising reliance on adjunct scholars to teach courses, the increasing numbers of administrators staffing universities, and the trends in faculty employment across disciplines.
Fri, 16 March 2018
Today's guest is Jeremy Horpedahl of the University of Central Arkansas. Jeremy's work builds on a famous theory from Bruce Yandle's 1983 article " Bootleggers and Baptists-The Education of a Regulatory Economist." The article explored the idea that laws are often passed or defended by coalitions of economic interests (bootleggers) and moral crusaders (Baptists). Though these two groups may be quite different, as in the canonical example, policies are unlikely to succeed without support from both groups.
Jeremy's work focuses on a particular example of bootleggers and Baptists in the modern world; specifically in Arkansas. Arkansas has many dry counties, where alcohol may not be sold. Many of these dry counties are adjacent to wet counties, where liquor stores just across the county line can sell to the residents of the dry county. When there are ballot initiatives to make dry counties wet, these liquor stores have the most to lose, so they often spend hundreds of thousands of dollars to prevent the prohibition laws from going to a vote.
Sat, 3 March 2018
My guest for this episode is Bryan Caplan of George Mason University. We discuss his latest book, The Case Against Education: Why the Education System Is a Waste of Time and Money, in which he argues that the social value of education is negative.
This may seem paradoxical, given that more educated individuals tend to earn more than less educated individuals. This can be explained in two ways: First, people who get more education were likely more skilled in the first place; in other words, there is a selection effect. Second, people who are already skilled can use education to demonstrate their skill to employers; economists call this signalling.
Signalling plays an important role in Bryan's understanding of the education system. He sees the causal effect of education on income as being 80 percent signalling and 20 percent learning. Most signalling models view signalling as negative sum: signals are costly, and to the extent that they help educated workers by pushing their resumes to the top of the pile, they harm uneducated workers by relegating their resumes to the trash bin. If everyone gets educated, then no one has a better chance of finding a job, but they bear the costs of many years and thousands of dollars of education.
Bryan draws on evidence from many different research areas to support his case, from economic research on the Sheepskin effect and comparisons between individual and national effects of education, to educational psychology research on "learning how to learn." We had an excellent conversation and I hope you will enjoy listening to it.