The Ambrosini Critique

The heavies are weighing in on Farewell to Alms. Not unexpectedly, they like the data but hate the underling thesis.

First, Prof. Clark goes head to head with Prof. Robinson (of MIT Harvard… like there’s a difference…) on the causes of the industrial revolution. Robinson is a big time believer in institutions (his latest paper is called “Property Rights and the Political Organization of Agriculture”) and thinks Clark’s cultural explanations are wrong but doesn’t provide much in the way of reasons for this conclusion. As Clark says:

Jim’s statement is a spirited summary of economists’ beliefs, but not an appeal to any compelling facts. It is a statement of faith, a Nicene Creed. It shows the yearning, the longing, of economists for eventual salvation through institutions. The facts, however, are that the Industrial Revolution was the result of cultural changes in England, not better incentives. By 1800 in successful economies people had embraced “thrift, prudence, negotiation, and hard work.” In most failed economies it is the failure of people to embrace these bourgeois values that explains economic failure.

In the original economic creed — the economics of Adam Smith — government just need to allow free and secure exchange, and growth results. Jim accepts that episodes like the British Raj in India show that libertarian prescription fails. So, he invokes the idea that governments must provide more: education to the masses, infrastructure for growth. But only democratic governments will have incentives to provide such goods the citizenry demand.

Yet, in the first nation to achieve modern economic growth, England, the government did none of this. There was no government support for education in England until 1870. Compulsory education to age 10 came only in 1880. The English educated themselves. The canals and the railways were all private enterprises, without even government subsidy.

Limited government produced growth in England but not in Malawi, because English society was very different from that of modern Malawi. Does limited government explain why Malawi is importing high cost Chinese workers even for unskilled labor?

Second, Solow (THE Solow) reviews the book, likes the data and hates the cultural explanation for growth:

In the end, Clark puts the finger on the workers—not their skills or native ability but their attitudes and aptitudes, their willingness to show up on time, work hard with little supervision, exercise local ingenuity, and so on.

In this context, too, he dismisses the prevailing view that dysfunctional or corrupt economic, social, and political institutions explain the divergence in efficiency. He reasons: if a factory in a poor country produces less than an essentially identical factory in a rich country, how can that be attributed to institutional failure? Here, too, he may be a little hasty. Cronyism at the top, failure to enforce laws, promotion by favoritism, inequitable taxation, capricious hiring and firing—all those practices could easily breed disaffection or even sabotage, and thus inefficient production. Maybe.

Clark’s pessimism about closing the gap between the successful and less successful economies may derive from the belief that nothing much can change unless and until the mercantile and industrial virtues seep down into a large part of the population, as he thinks they did in preindustrial England. That could be a long wait. If that is his basic belief, it would seem to be roundly contradicted by the extraordinary sustained growth of China…

A lot of critics of Farewell to Alms suggest China as a counter-example. I think China’s recent success is definitely a case where institutional changes freed the population to reach their potential. The question though, is why did China have such a huge potential in the first place? Does every country have this potential and are the low-income ones just being held back by institutional barriers?

“I want to make it crystal clear that the “centrism” here is entirely about gesture, tone, and affect. It’s got nothing to do with substance.” — David Roberts at Gristmill

As if the whole “left”/”right” dichotomy isn’t predicated on gestures, tones and affects. Being on the “left” is being in a club. Being on the “right” is being in a club. Both clubs have secret handshakes, slogans and banners.

And knowledge of the truth isn’t an exclusive benefit of membership in either club.

…and now we’re the ones to pick them up.

Now that is some of the most encouraging venom to be spit my direction I’ve ever heard.

… with support like this:

What a great line from a 1946 Supreme Court opinion deciding property owners don’t own the airspace above their land.

Larry Lessig has a good talk about property rights and copy rights in general. He makes two great points: First, he talks about how we need to set up a system were content that is “more free” (e.g. user generated content, mixes, etc) competes with content that is “less free” (e.g. music labels, etc). This is a good idea, but included in that discussion is one of the best statements of the virtue of competition I’ve ever heard. He says, the two competitors will “teach one the lessons of the other”. In other words, competition is about learning.

The second point: Kids know they are living outside the law when they’re following their instincts to recreate culture by remixing. Obviously, this “realization is extremely corrosive to a democracy” in which laws are meant to be for everyone.

Actually, besides these points and overall good content, the presentation itself is really good. Lessig puts on a good show.

So watch it already:

Google Reader implemented blogrolls. This means its much less tedious to coordinate the list of the sites I’m actually reading and my blogroll.

I like the little “read more…” link.

UPDATE: I’ve also added an “interesting posts” widget at the bottom of my posts. Oh, and I got rid of that nagging traineo widget.

Is this a good model of entrepreneurship?

Every so often, a dwarf in this game will fall into a strange mood. They will seek out a specific workshop and begin gathering items from all over your fortress. When they gather all of the items they require, they will begin a mysterious construction. When finished, they will produce an item of unsurpassed quality, and your dwarves will hail its creation. If it’s the right kind of mood, your dwarf will advance to legendary status in the skill required to make that item.

Often, though, your obsessed dwarf can’t find a specific item that they crave, and they’ll eventually go mad. This is a huge incentive to develop your infrastructure; there’s no telling when a dwarf will suddenly take over a forge and demand uncut tourmalines and bat leather.

Peri on complimentary immigrants (again).¹

1. I get the sense that the immigration debate is heating up in the UK… they’re worried about Poles not Mexicans… it would be interesting to see the debate outside the context of race. [↩]

Click here and take a look at the video.

[B]eing directed by sight of bills upon the walls, I did go to Shoe Lane to see a cocke-fighting at a new pit there, a sport I was never at in my life; but, Lord! to see the strange variety of people, from Parliament-man (by name Wildes, that was Deputy Governor of the Tower when Robinson was Lord Mayor) to the poorest ‘prentices, bakers, brewers, butchers, draymen, and what not; and all these fellows one with another in swearing, cursing, and betting. I soon had enough of it, and yet I would not but have seen it once, it being strange to observe the nature of these poor creatures, how they will fight till they drop down dead upon the table, and strike after they are ready to give up the ghost, not offering to run away when they are weary or wounded past doing further, whereas where a dunghill brood comes he will, after a sharp stroke that pricks him, run off the stage, and then they wring off his neck without more ado, whereas the other they preserve, though their eyes be both out, for breed only of a true cock of the game. Sometimes a cock that has had ten to one against him will by chance give an unlucky blow, will strike the other starke dead in a moment, that he never stirs more; but the common rule is, that though a cock neither runs nor dies, yet if any man will bet 10l. to a crowne, and nobody take the bet, the game is given over, and not sooner. One thing more it is strange to see how people of this poor rank, that look as if they had not bread to put in their mouths, shall bet three or four pounds at one bet, and lose it, and yet bet as much the next battle (so they call every match of two cocks), so that one of them will lose 10l. or 20l. at a meeting.

— Samuel Pepys December 21, 1663