Books to Read While the Algae Grow in Your Fur, July 2014
Attention conservation notice: I have no taste.
- Stephen King, Eyes of the Dragon
- Mind candy. I really liked it when I was a boy, and on re-reading it's not
been visited by
the Suck Fairy,
but I did come away with two thoughts. (1) I'd have been very interested to
see what a writer with drier view of political power would have done
with the story elements (the two princes, the evil magician, the exiled nobles)
— Cherryh, say, or
Elizabeth Bear. (2) Speaking of which, it's striking how strongly King's
fantasy books (this one, The Dark Tower) buy into the idea
of rightfully inherited authority, when his horror stories are often
full of healthy distrust of government officials ("the Dallas police"). I
don't think he'd say that being electorally accountable, rather than chosen by
accident of birth, makes those in power less trustworthy...
- Charles Tilly, Why?
- Tilly's brief attempt to look at reason-giving as a social act, shaped by
relations between the giver and receiver of reasons, and often part of
establishing, maintaining, or repairing that relationship. Tilly draws two
distinctions: between reasons which involve cause-and-effect and those which
use a logic of "appropriateness" instead, and those between which require
specialized knowledge and those which don't. "Conventions" are common-knowledge
reasons which are invoke appropriateness, not causal accounts. (Think "Sorry
I'm late, traffic was murder".) "Stories" give causal explanations which only
invoke common knowledge. Tilly is (explicitly)
about stories: they involve the deeds of a small number of conscious agents,
with unity of time, place, and action. Codes are about matching circumstances
to the right specialized formulas and formalities --- are your papers in order?
is the evidence admissible? Technical accounts, finally, purport to be full
cause-effect explanations drawing on specialized knowledge.
- The scheme has some plausibility, and Tilly has lots of interesting
examples. But of course he has no argument that these two dimensions
(generalist vs. specialist, causation vs. appropriateness) are the only two big
ones, that everything (e.g.) the "codes" box really does act the same way,
etc. So I'd say it's worth reading to chew over, rather than being
- Elliott Kay, Rich Man's War
- Sequel to Poor Man's
Fight, continuing the same high standard of quality mind-candy.
- Alexis de Tocqueville, Democracy in America
- Yet another deserved classic read only belatedly. Volume I is actually
about de Tocqueville's observations on, and ideas about, democracy in America.
This is interesting, mostly empirical, and full of intriguing accounts of
social mechanisms. (I see
Elster is so into him.) Volume II consists of his dictates about what
democracy and social equality will do to customs and character in every
society. This is speculative and often the only reference to America comes in
the chapter titles. (I see why this would also appeal to Elster.)
- I would dearly like to find a good "de Tocqueville in retrospect" volume.
Some of his repeated themes are the weakness of the Federal government, the
smallness of our military, the absence of serious wars, the relative equality
of economic condition of the (white) population, the lack of big cities among
us. So how have we managed to preserve as much democracy as we have? For that
matter, how does the civil war and its outcomes even begin to make sense from
- — Rhetorical observation: de Tocqueville was very fond of contrasts
where democracy leads to less dispersion among people than does aristocracy,
but around a higher average level. He either didn't have the vocabulary to say
this concisely, or regarded using statistical terms as bad style. (I suspect
the former, due to the time period.) He was also very fond of paradoxes, where
he either inverted directions of causal arrows, or flipped their signs.
- Maria Semple, Where'd You Go, Bernadette?
- Literary fiction about Seattle, motherhood, marital collapse, aggressively
eccentric architects, and Antarctica. Very funny and more than a bit
- Thomas Piketty, Capital in the Twenty-First Century [Online technical appendix, including extra notes, figures, and spreadsheets]
- Yes, it's as good and important as everyone says. If by some chance you
haven't read about this yet, I
Solow, Branko Milanovic
Geier for overviews; Suresh
is the best I've seen on the strengths and weaknesses of the book, but doesn't
summarize so much.
- Some minor and scattered notes; I might write a proper review later. (Why
not? Everybody else has.)
- Perhaps it's the translation, but Piketty seems wordy and a bit
repetitive; I think the same things could have been said more briskly. Perhaps
relatedly, I got a little tired of the invocations of Austen, Balzac, and
- The book has given rise to the most
happen to have Marshall McLuhan right here" moment I ever hope to see.
- Attempts to undermine his data have,
unsurprisingly, blown up in his attackers' faces.
Similarly, claims that Piketty ignores historical contigency, political factors
and institutions are just bizarre.
- Granting that nobody has better point estimates, I wish he'd give margins
of error as well. (A counter-argument: maybe he could calculate
purely-statistical standard errors, but a lot of the time they could
be swamped by nearly-impossible-to-estimate systematic errors, due to, e.g.,
- His two "laws" of capitalism are an accounting identity (the share of
capital in national income is the rate of return on capital times the ratio of
capital to income, \( \alpha = r \beta \) ), and a long-run equilibrium
condition (the steady-state capital/income ratio is the savings rate divided by
the economy-wide growth rate, \( \beta = s/g \) ), the latter presuming that
two quite variable quantities (\( s \) and \( g \)) stay fixed forever. So the
first can't help but be true, and the second is of limited relevance. (Why
should people keep saving the same fraction of national income as their wealth
and income change?) But I don't think this matters very much, except for the
style. (However, Milanovic has
defense of Piketty on this point.)
the Cambridge Capital Controversy wrong, and while
for our understanding of capital as a factor of production, it's
for capital as a store of value, which is what Piketty is all about.
Similarly, Piketty doesn't need to worry about
marginal returns to capital in the economy's aggregate production function,
which is good, because aggregate production
no sense even within orthodox neo-classical economics. (The fact
neo-classical economists continue to use them is a bit of an intellectual
embarrassment; they should have more self-respect.)
- The distinction between "income from labor" and "income from capital" is
part of our legal system, and Piketty rests a lot of his work on it. But It
seems to me an analytical mistake to describe the high compensation of a
"super-manager" as income from labor. While it isn't coming
from owning their corporation, it is coming from
(partially) controlling it. In some ways, it's more like the income
of an ancien regime tax
farmer, or an
Ottoman timariot, than the
income of a roofer, nurse's aid, computer programmer, or even an architect.
(Actually, the analogy with the timariot grows on me the more I think about it.
The timariot didn't own his timar, he couldn't sell it or bequeath it, any more
than a super-manager owns his company. Officially, income in both cases is
compensation for services rendered to the actual owner, whether sultan or
stock-holder.) It would be very nice to see someone try to separate income
from labor and income from control, but I have no clue how to do it,
statistically. (Though I do have a modest proposal for how to
reduce the control income of super-managers.)
- p. 654, n. 56: For "Claude Debreu", read "Gerard Debreu". (Speaking of economists' "passion for mathematics and for purely theoretical ... speculation"!)
- ETA: Let me emphasize the point about production functions, marginal
returns on capital, etc. It cannot be emphasized enough that capital, for
Piketty, is the same as wealth, assets, stores of value which can be traded in
the market. He does
not mean non-human factors of production, "capital goods".
goods can work fine as assets, but a much more typical asset is a claim on part
of the product achieved through putting capital goods and labor to use.
Because he is looking at wealth rather than capital goods, the appropriate unit
of measurement, and the one he uses, is monetary rather than physical. One
consequence is that Piketty can legitimately add up monetary amounts to get the
total wealth of a person, a class, or a country. (Whereas adding up capital
goods is deeply problematic at best; I don't think even the dullest Gosplan
functionary would've tried to get the total capital of the USSR by adding up
the weight or volume of its capital goods.)
- This also has implications for the "marginal product of capital" question.
If a capital good is measured in physical units, it's not crazy to imagine
diminishing marginal returns. If some line of work needs tools, equipment, a
proper space, etc., to be carried out, then the first crude tools and the shack
which allow it to get started increase output immensely, then having a bit more
equipment and a decent space helps, and after a certain point one extra spanner
or crucible or square foot of floor-space, with no extra worker, does very
little. (Not crazy, but also not obviously true: see the work of Richard
which I learned of
Ackerman's piece on Piketty.) Some critics of Piketty's forecasts point to
this, to argue that his vision of widening inequality will fail on these
grounds. They equate the rate of rate on capital, Piketty's \( r \), with the
marginal product of capital, and, believing the latter must decline, think \( r
\) must shrink as well. We thus have the curious spectacle of apostles of
capitalism claiming it will be saved by a falling rate of profit. (I
believe Uncle Karl would have savored the irony.) This intuition, however, is
based on physical units of capital --- spanners, crucibles, servers,
square meters of buildings. What about in monetary units?
- Well, what price would you, as a sensible capitalist, pay for a marginal
increase in your supply of some capital good? Its value to you is the present
value of the increased future production that makes possible. (One buys
a stock of capital and receives a flow of product.) A \$1
marginal increase in the capital stock has to produce at least \$1 of present value in extra
production. If it augmented the present value of production by more than \$1, you'd be
happy to buy it, but the price of that same physical capital good would then
presumably be bid up by others. (Or, alternately, if not bid up, you would
then buy another \$1 worth of capital, until the diminishing returns
of physical capital set in.) At equilibrium, a marginal extra dollar
of capital should always, for every enterprise, increase the present value of production
by \$1. Under the simplest assumption that the extra product is constant over
time, this means a marginal \$1 of capital should increase production in each
time period by \$ \( \delta \), the discount rate. (Again, we're using monetary
and not physical units for output. Also, I neglect small complications from
depreciation and the like.) In symbols, \( r = \partial Y/\partial K = \delta
\). (\( K \) has units of money, and \( Y \) of money per unit time, so the
partial derivative has units of inverse time, as \( \delta \) should.) It is
surely not obvious that the discount rate should fall as capital accumulates.
- Expressed in other terms, the elasticity of substitution between capital
and labor thus ends up being the elasticity of the marginal product of labor
(\( \partial Y/\partial L \)) with respect to the ratio of capital to labor (\(
K/L \)). Again, this may or may not fall as \( K \) increases, but I don't see
how diminishing returns to physical capital guarantees this.
- However, the fact that the measured real rate of return on capital (which
Piketty puts at roughly 5% over all periods and countries) is so much higher
than any plausible discount rate suggests that the whole enterprise of trying
to relate returns on capital to marginal products is ill-conceived. Indeed,
Piketty rightly says as much, and his claim that \( r > g \) is just an
empirical regularity, true for most but not all of his data.
So it's clearly not immutable, and indeed his policy proposal of a progressive
tax on capital is designed to change it!
- Manual trackack: A Fine Theorem (on aggregate production functions).
- Charles Stross, The Rhesus Chart
- Mind candy. Of course this is what would happen if some City
quants happened to find themselves turning into vampires... (Before; after)
- Susan A. Ambrose, Michael W. Bridges, Michele DiPietro, Marsha C. Lovett and Marie K. Norman, How Learning Works: Seven Research-Based Principles for Smart Teaching
- An excellent guide to what psychological research has to say about making
college-level teaching more effective --- that is, helping our students
understand what we want them to learn, retain it, and use it and make it their
own. I'd already been following some of the recommendations, but I am going to
consciously try to do more, especially when it comes to scaffolding and giving
rapid, targeted feedback. Following through on everything here would be a
pretty daunting amount of work...
- Disclaimer: Four of the authors worked at CMU when the book was
published, and one is the spouse of a friend.
Books to Read While the Algae Grow in Your Fur;
Scientifiction and Fantastica;
Commit a Social Science;
Minds, Brains, and Neurons;
The Beloved Republic;
The Dismal Science;
Corrupting the Young;
The Commonwealth of Letters
Posted at July 31, 2014 23:59 | permanent link