281 (7 September 2016)

Welcome to week 281!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(27 August 2016): “The Mundell-Fleming trilemma: Two out of three ain’t bad” (http://www.economist.com/news/economics-brief/21705672-fixed-exchange-rate-monetary-autonomy-and-free-flow-capital-are-incompatible)

********This is the sixth of six briefs on economics.  (Somehow I failed to include it last week.)  It focuses on the Mundell-Fleming trilemma, also known as the “impossible or inconsistent trinity” that says “a country must choose between capital mobility, exchange-rate management and monetary autonomy . . . Only two of the three are possible.”  This brief is a little longer than the previous ones, perhaps because of its importance and the explanation devoted to making the trilemma plausible.  Toward the end of the article the work of French economist Hélène Rey is discussed, the most notable statement being “What is clear from Ms Rey’s work is that the power of global capital flows means the autonomy of a country with a floating currency is far more limited than the trilemma implies.”  Policy makers and politicians please take note.

********All six briefs of economics, along with a wealth of related material, can be accessed at: http://www.economist.com/economics-briefs.  For example, there are two earlier articles dealing with the Mundell-Fleming trilemma and its consequences for economic policy.

(1 September 2016): “Where American Public Schools Came From” (http://daily.jstor.org/where-american-public-schools-came-from/)

——–“As kids return to school this fall, consider the remarkable fact that we all contribute to the education of our neighbors’ kids.  While taxpayer-funded college and healthcare are controversial, you rarely hear the argument taxes shouldn’t pay for elementary and high schools.”  In “The Local Property Tax for Public Schools: Some Historical Perspectives,” Billy D. Walker explores how this happened.  The story begins “long before the American Revolution.  Universal, compulsory, free education for children was a Reformation idea, partly a result of Protestants’ desire to let people read scripture for themselves, and partly an effort to wrest control of educational systems from the Catholic schools.  In the 1500s, German states began funding public schools.”  Puritans led the way in England “but the 1660 restoration of the monarchy set the project back for more than a century.  Meanwhile, Puritans were bringing their ideas to North America.  In 1647, Massachusetts Bay Colony passed a law saying that the state could require towns to establish schools under control of public officials, make children attend them, and levy taxes to support them.”

********The link to a pdf of the Walker article is included at the bottom of the post.  The role of religion (the invisible handshake) in the development of the law (the invisible foot) enabling the public financing of education (the invisible hand) is striking.  The historical background provides a new perspective on current discussions of public education, especially as it relates to vouchers.

(2 September 2016): “This small Indiana county sends more people to prison than San Francisco and Durham, N.C., combined.  Why?” (http://www.nytimes.com/2016/09/02/upshot/new-geography-of-prisons.html)

********As stated by Wikipedia, in 2013 “there were . . . 3,143 counties and county-equivalents in the United States.”  Each county, subject to state law, has its own judicial and law enforcement system, with the ability to be elected and re-elected playing an important role in the rigor of enforcement.  As a result, as the article points out, there are dramatic “disparities” in the “admission rates” to correctional facilities and sentence length among the various counties.  The article dramatically shows that the location of a conviction matters greatly, e.g., “rural, mostly white and politically conservative counties” tend to have higher rates of “admission” and longer sentences.  Leading the way in the U.S. is Dearborn County, Indiana; in North Carolina, Martin County, in the north-east part of the state, leads the way.

********The article has two graphics that are especially enlightening.  One is of the U.S. as a whole, at least the lower 48, from which you can find information on “admission rates” and rates of increase between 2006 and 2013 by an appropriate click for any county.  The other, “A Growing Divide,” shows that inmates per thousand have fallen dramatically in Populous counties, fallen substantially in Midsized counties, and risen slightly in Small counties.  Visually impressive, to be sure.

********The words ‘disparity’, as used above, and ‘difference’ carry important shades of meaning that are developed at: http://content.healthaffairs.org/content/27/2/374.full.  As I understand it, a disparity is a difference that is unjust.  That suggests that some differences are not unjust, i.e., just.  Of course, some people who use the term ‘disparity’ may not make such a distinction.  I intend to be careful in my usage.

(3 September 2016): “A Lobbyist Wrote the Bill.  Will the Tobacco Industry Win Its E-Cigarette Fight?” (http://www.nytimes.com/2016/09/03/us/politics/e-cigarettes-vaping-cigars-fda-altria.html)

——–“The e-cigarette and cigar industries have enlisted high-profile lobbyists and influential congressional allies in an attempt to stop the Food and Drug Administration from retroactively examining their products for public health risks or banning them from the market. . . . The bipartisan effort has featured a former senator who did not register as a lobbyist before going to work for the cigar companies and a former Obama administration official, now a private consultant, who is trying to undo his earlier work reviewing the rule.  In addition, one member of Congress introduced industry-written legislation without changing a word of it.”

********Unsurprisingly, companies are not interested in legislation that will decrease the demand for their products.  The article is especially interesting, though, for the documents it provides showing how some legislation gets developed and the lobbying efforts that support it.  A related article “Big Tobacco Wants to Turn Japan’s Smokers Into Vapers” (http://www.bloomberg.com/news/articles/2016-08-28/no-smoke-nicotine-hits-heat-up-japan-s-moribund-tobacco-market) shows the international dimension of legislative efforts.  In light of this, I’d like to call attention to The Cigarette Century: The Rise, Fall, and Deadly Persistence of the Product that Defined America (https://www.amazon.com/Cigarette-Century-Persistence-Product-Defined/dp/0465070485/), by Allan M. Brandt.  This book is near the top of my reading list as I seek to learn more about the legal and illegal sale of addictive drugs and the products that serve as their delivery vehicles.

(5 September 2016): “No Sailors Needed: Robot Sailboats Scour the Oceans for Data” (http://www.nytimes.com/2016/09/05/technology/no-sailors-needed-robot-sailboats-scour-the-oceans-for-data.html)

——–Saildrone, of Alameda, California, manufactures and rents autonomous robotic sailboats that are used for a variety of scientific purposes.  In a recent application it was counting haddock in the Bering Sea, tracing “lawn-mower style paths across” its violent surface.  The company charges a daily fee of $2,500 for the data it produces.  Saildrone got its start with funds from Google executive chairman Eric Schmidt and his wife Wendy Schmidt, as well as three socially-minded venture capital firms.  Although Saildrone makes the boats, their scientific instrumentation tends to come from those who rent them.  As Christian Meining, the director of engineering of the National Oceanic and Atmospheric Administration’s Pacific Marine Environmental Laboratory notes, “Richard [Jenkins, Saildrone’s CEO,] had a great boat but no scientific sensors on it, and we had sensors but no boat.”  Saildrone boats are now being used to help study “the El Nino arm-water pattern in the Pacific Ocean.”  Ultimately, Jenkins contends, “a fleet of robot sensors spread across an ocean like the Pacific will make a huge difference in both weather and climate predictions.”

********You can learn more about Saildrone at its very informative website: http://saildrone.com/.  Given that the oceans currently cover about 71 percent of the surface of Earth (http://www.oceanicinstitute.org/aboutoceans/aquafacts.html) and that the percentage will almost certainly increase with climate change, it appears like the company has a bright future.  An interesting and important related article is “Flooding of Coast, Caused by Global Warming, Has Already Begun” (http://www.nytimes.com/2016/09/04/science/flooding-of-coast-caused-by-global-warming-has-already-begun.html).  The idea of “sunny-day flooding,” i.e., flooding that takes place that is not the result of a hurricane, tropical storm, or some other weather event is one to remember.  Contained within it is a link to an interactive graphic (http://www.nytimes.com/interactive/2016/09/04/science/global-warming-increases-nuisance-flooding.html) that examines sunny-day flooding up and down the East Coast, including Wilmington, North Carolina and Charleston, South Carolina.  As the graphic says, Wilmington “and points nearby have been among the worst-hit parts of the country by the increase in tidal nuisance flooding.”

********One thing that struck me about the “No Sailors” article was a comment by the venture capitalist Chamath Palihapitiya, who said: “My interest in Saildrone is very practical . . . Let’s stop arguing about what is happening, and let’s measure.  Once you have data and it’s statistically significant and valid, then we can get to the next step, which is to find what the structural reforms are that need to happen.”  This contrasts greatly with the willful ignorance of some political bodies that forbid the use of governmental funds for such matters as climate science or gun-based homicides.  In relation to this, I was taken by two in a review of The Dream of Enlightenment (http://www.economist.com/news/books-and-arts/21706235-well-documented-account-second-golden-age-western-philosophy-seeing-light): Sapere aude (dare to know).  Immanuel Kant used them in his 1784 essay “An Answer to the Question: What is Enlightenment?”  You can learn more about the history of the expression at: https://en.wikipedia.org/wiki/Sapere_aude.  One translation of the essay can be found at: https://en.wikisource.org/wiki/What_is_Enlightenment%3F.

(6 September 2016): “A Labor Day Look at the Future of Work” (http://daily.jstor.org/a-labor-day-look-at-the-future-of-work/)

——–“Labor Day is often the moment when we look back at the history of the trade union movement . . . But it is also a moment to look forward, and the consider the forms of worker advocacy and social support we will need in the years ahead.  At this moment, that means thinking very carefully about the relationship between income inequality, computerization, and unionization.  The three are closely related, as Tali Kristal argues” in a recent article.  According to hear research, “It’s not computerization that drives down workers’ share of national income, relative to the share that is earned by . . . company owners and investors . . . Rather, it’s the way that computerization affects unionization rates: by weakening unions, technology has changed the balance of power between labor and capital, and allowed the owner/investor class to claim a larger share of income.”

********In addition to the work of Tali Kristal cited in the article, articles by well-known and respected economist historian of technology Joel Mokyr (and others) and Sara Horowitz are discussed and linked.  I’m not aware of people who have looked carefully at the relationship between unionization, computerization, and inequality, so Kristal’s work sounds like it could be worth a closer look.  It was a good idea to couple Kristal’s work with the longer perspective of Mokyr, et al.  A related story, see “In the Land of the Robot [Japan], Androids Are on the March” (http://www.nytimes.com/2016/09/07/world/what-in-the-world/in-the-land-of-the-robot-androids-are-on-the-march.html).  It contains a 30-second video of the robot “Chihira Junco, a tourist greeter at a shopping mall in Tokyo.”  The producer of Ms. Junco plans “to develop 1,000 more androids in 2017.  By 2020, it hopes to make 10,000 a year.”  Luddites (https://en.wikipedia.org/wiki/Luddite) take note.

********While we are taking a look at how computerization has been disrupting the labor market, it is worthwhile drawing attention to a book that examines how digitization has disrupted the entertainment industry: Streaming, Sharing, Stealing: Big Data and the Future of Entertainment (https://www.amazon.com/Streaming-Sharing-Stealing-Future-Entertainment/dp/0262034794/), by Michael D. Smith and Rahul Telang.  According to Hal Varian, the Chief Economist of Google, “Smith and Telang have long been recognized as leading experts on the economics of the entertainment industry. . . . Anyone who wants to understand the uneasy relationship between tech and entertainment should read this book.”  The book is usefully reviewed at: http://www.wsj.com/articles/were-all-cord-cutters-now-1473203919.

(7 September 2016): “The New Face of American Immigration” (http://graphics.wsj.com/immigration-from-mexico-china-and-india/)

********This is a striking interactive graphic showing migration patterns in the U.S. from 2005 through 2014.  It took me awhile to learn how the interactive features worked, but it was worth the effort.  The things I noticed were (1) the absolute and relative decrease in immigrants from Mexico; (2) the absolute and relative increase in immigrants from China and India; and (3) the predominance in every year of the Other category, i.e., most immigrants come from countries other than China, India, and Mexico.  The source of the map appears to be the Integrated Public Use Microdata Series (https://usa.ipums.org/usa/) of the Minnesota Population Center of the University of Minnesota.  While exploring the site I ran across a link to an article in The New York Times that provides vivid time series of “Where people born in . . . [name of state or D.C.] have moved to” for every state from 1900 through 2012 (http://www.nytimes.com/interactive/2014/08/13/upshot/where-people-in-each-state-were-born.html).  For example, in 2012, 75% of the people born in North Carolina lived in the state, while 3% of the people born in North Carolina lived in Virginia.  North Dakota is more dramatic.  In 2012, 47% of the people born there lived there, while 13% of the people born there lived in Minnesota.  One could learn a lot by reflecting on these maps, especially the one for the District of Columbia.

********This is probably the place to draw attention to “Schumpeter: Leaving for the city” (http://www.economist.com/news/business/21706285-lots-prominent-american-companies-are-moving-downtown-leaving-city), which discusses the return of many business headquarters from the suburbs, and in doing so draws attention to The Big Sort: Why the Clustering of Like-Minded America is Tearing Us Apart (https://www.amazon.com/Big-Sort-Clustering-Like-Minded-America/dp/0547237723/), by Bill Bishop.  I wonder what the regional and urban maps would show if developed on a pattern for those on the state level?

May you have a good week!

Bruce

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