Welcome! The articles below caught my attention this week. What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********). Article titles preceded by [SR] require a subscription. TIF Weekly is available on the web.
Robert Shiller’s book Narrative Economics: How Stories Go Viral an Drive Major Economics Events has been released. You can read an excerpt from it in “Robert Shiller on Infectious Narratives in Economics: Excerpt” Bloomberg Businessweek. The book consists of four parts: The Beginnings of Narrative Economics, The Foundations of Narrative Economics, Perennial Economic Narratives, and Advancing Narrative Economics; the Preface of the book poses the question, “What Is Narrative Economics?” As noted in TIF Weekly 352 (16 January 2019), the book is an outgrowth of Shiller’s 2017 presidential address to the American Economic Association, the title of which is “Narrative Economics,” which might be the gateway to the book.
(9 September 2019) “Mike Isaac’s Uber Book Has Arrived” The New York Times
********This is a review of Super Pumped: The Battle for Uber, by Mike Isaac. This book seems to follow in the vein of Bad Blood: Secrets and Lies in a Silicon Valley Startup, by John Carreyrou, except that instead of following the steps and missteps of Elizabeth Holmes of Theranos, we get to follow in those of Travis Kalanick of Uber. “Isaac depicts Kalanick as an evil bro-genius, bent on world domination through ride-sharing. A charmer when he wanted to be and a math whiz since childhood, Kalanick understood that Uber could succeed only if it grew faster than any competitor, attracting large numbers of riders and drivers in cities across the globe. He let nothing get in the way of growth.” In thinking about Holmes and Kalanick—and I’m sure the list could be extended indefinitely—the word hubris came to mind. There is a nice nine-minute YouTube video that discusses it at some length, with historical examples.
(1 October 2019)
********Robert Shiller’s book
(2 October 2019) [SR] “Why Your Used Shirts Are Destined for the Dump and Not the Recycling Center” The Wall Street Journal
——–“Shoppers are buying more clothes and discarding them faster than ever, a trend that is sending an increasing amount of textiles to the dump and propelling the fashion industry to search for new technology to recycle used garments. . . . Globally, the number of garments purchased annually by the average consumer jumped 60% from 2000 to 2014, according to McKinsey & Co. The number of times an item is worn before it is discarded dropped 36% between 2002 and 2016 . . . In the U.S., clothes are worn for around a quarter of the global average. Despite the buildup of used clothes, the technology to recycle old textiles into fiber to make new ones has remained embryonic, meaning clothes eventually end up in the dump or incinerator.” Overall, less “than 1% of the fiber used to produce clothes is recycled into new garments, the Ellen MacArthur Foundation says.”
********As the article notes, “The environmental impact of clothing is set to keep growing,” even though apparel companies say they are trying to find ways to turn old clothing into new.” One of the challenges they face is separating blended fabrics, like polyester and cotton, and do this in a way that is competitive with new, unblended textiles. It seems like many recycling challenges come down to sorting.
(2 October 2019) “Federal government has dramatically expanded exposure to risky mortgages” The Washington Post
********This lengthy and intricate article exceeds my ability to summarize. Let’s just say that it argues that the “federal government has dramatically expanded its exposure to risky mortgages, as federal officials over the past four years took steps that cleared the way for companies to issue loans that many borrowers might not be able to repay.” This should sound familiar. “This risk is the direct result of pressure from the lending industry, consumer groups and political appointees, who clamored for the government to intervene when homeownership rates fell several years ago.”
(4 October 2019) “Why the Dakota Only Traded among People with Kinship Bonds” JSTOR Daily
********Livia Gershon draws upon on the article “Dakota Indian Economics and the Nineteenth-Century Fur Trade,” by Mary K. Whelan, discuss the role of kinship patterns as a basis for trade. In doing so she examines two economics models, the one with which we are all familiar, i.e., someone has a product and trades them with anyone who wants it, and another in which trading takes place only with people with shared kinship. In this latter case, to “enter into trading relationships, white fur traders became part of the family” with whom they wanted to trade through marriage. “Marrying into a family meant that a trader’s relative were obligate to trade with him, while he was obligated to provide gifts and support as needed.” As the post points out, things did not necessarily go smoothly under these conditions as “Different conceptions of reciprocity and debt . . . often confused trade relations.” Gershon concludes, noting that “the continuing fight over the Dakota Access Pipeline’s path through Dakota and Lakota land suggests, the clash between profit-centered Euro-American economics and other ways of thinking about the material world continues.” Whelan’s article can be accessed in its entirety from the JSTOR post.
(7 October 2019) “U.S. Using Trade Deals to Shield Tech Giants From Foreign Regulators” The New York Times
——–“The Trump administration has begun inserting legal protections into recent trade agreements that shield online platforms like Facebook, Twitter and YouTube from lawsuits, a move that could help lock in America’s tech-friendly regulations around the world even as they are being newly questioned at home.” The protections stem from American rules “codified in Section 230 of the Communications Decency Act. [which] shield online platforms from many lawsuits relate to user content an protect them from legal challenges stemming from how they moderate content. Those rules are largely credited with fueling Silicon Valley’s rapid growth. The language in the trade deals echoes those provisions but contains some differences.”
********It struck me as interesting how provisions of U.S. laws might become embodied in trade deals, thus extended the scope of American laws beyond the borders of the U.S. That, of course, is something that any country can try to do. Section 230 is the subject of the recent book The Twenty-Six Words That Created the Internet, by Jeff Kosseff.
(7 October 2019) “American Railroads Are Already in Recession With No End in Sight” Bloomberg
——–“This year’s railroad slump is getting worse as a slowdown in manufacturing threatens broader weakness in the U.S. economy. . . . Shipments are down for autos, coal, grain, chemicals and consumer goods, with crude oil the only bright sport. The rail downturn underscores the damage from the U.S.-China trade war, which is making shippers more cautious and crimping freight—validating earlier warnings from railroad executives. . . . Adding to the cargo drop, a brief rise is coal exports has fizzled and bad weather has delayed crop harvests and dragged down grain carloads.” Trucking, like railroading, is “also feeling the pain. Less-than-truckload cargo, which tends to be tied to industrial production, plummeted 12$ in August from a year earlier.”
********The demand for logistic services, whether it be for railroads or trucks, is derived from the demand for the products that are being moved. Thus a decrease in the demand for products, especially those traded internationally, results in a decrease in the demand for railroad and trucking services. It is interesting to look at this article and the one immediately above. They both show how Federal law and initiatives affect the demand for goods and services in predictable, if not necessarily desirable, ways.
(8 October 2019) [SR] “Déjà View: The Psychology Behind the ‘Rewatch’” The Wall Street Journal
——–“Kate Galyon, a “21-year-old baker in Denton, Texas, recently finished watching all 201 episodes of the comedy series [“The Office”] for the 10th time. She tried sampling other shows but didn’t feel the same spark. So she started her 11th cycle.” She notes, “I have connected with those characters. It’s tedious to try doing that again” with a new series, “Why would I waste my time when I could watch a show that I know that I love?” So it is that “Rewatchers slip back into reliable shows to summon certain moods, like music lovers teeing up playlists of nostalgia-inducing songs. . . . According to the ‘paradox of choice,’ a psychological concept popularized by a 2004 book of the same name, an overabundance of options stymies consumers’ ability to choose among them.”
********Here is the link to the 2016 revised edition of The Paradox of Choice: Why More is Less, by Barry Schwartz. Such situations always bring to mind Joni Mitchell’s lyric “none of the crazy you get from too much choice,” in her song “Barangrill,” which can be heard here. Trying to understand why people would sometimes rather reach for the familiar than for something new seems important, and not only for economic matters—consider politics and religion. The “rise of rewatching” has certainly caught the attention of media. “Rewatching is one of the forces driving a spate of blockbuster TV deals, as rival streamers lay claim to classic shows that can help keep subscribers locked in. . . . Rewatch potential is among the indicators that help measure a show’s value in the streaming market.”
********I suspect there is a growing literature examining familiarity, novelty, and choice. My brief search turned up this: “Novelty vs. Familiarity Principles in Preference Decisions: Task-Context of Past Experience Matters,” Frontiers in Psychology (18 March 2011).
May you have a good week!