Alms Watch 2007

  • Slashdot, as usual, has a pretty good (not necessarily correct) discussion on Prof. Clark’s thesis
  • Also at Slashdot, they discuss a study that finds genetic diversity has decreased in England over the last 1700 years. You’ll notice the explanation for this change is the black death, an explanation Clark dismisses to explain the “rise of modern man”
  • gnxp also discusses the genetic diversity study. He points out while specific alleles may be becoming less diverse, there’s been a marked increase in the combinations of different genes (e.g. most Latino men have Spanish Y chromosomes but Indian mitochondrial DNA).

UC Davis Econ in the News

I didn’t see this before… Professor Clark had an op-ed about immigration in the LA Times:

Can the U.S. forestall the relative decline of the economies on its southern fringe? No. The evidence from history again is that the rise and decline of economies is beyond the reach of economic policy. The British ran India from 1857 to 1947 with a set of economic policies that would have brought pride to the heart of the most pro-market modern economist: free markets, absolute security of property, price stability, low taxes, free mobility of capital and entrepreneurs. Yet, in that same interval, Indian income declined relative to that of Britain. Quite possibly the income gap between the U.S. and its southern neighbors will further widen.

In such a situation, recognizing that there will be some flow of labor across this wealth divide, and periodically legalizing those who manage to find their way to the U.S. labor market, is not a bad option. The United States’ biggest foreign aid program is not the $19 billion that it sends through official aid channels (a mere 0.14% of GDP) worldwide. Instead, it is the employment it provides for the many millions of illegal immigrants in the U.S. from the Third World, mainly Latin America. The earnings of these migrants, which some estimate at more than $200 billion a year, easily dwarf the official U.S. aid contributions.

Furthermore, the remittances these immigrants send back to relatives in their home countries — more than $25 billion annually just to Mexico, according to the World Bank — far outweigh official aid. And unlike that aid, a large share is not absorbed by bureaucrats and consultants but goes directly to the poor.

UPDATE: I had no idea Clark wrote so many editorials… Here’s another one he wrote last month. This one is on African development:

Before the Industrial Revolution all societies were caught in the same Malthusian Trap that imprisons Africa today. Living standards stagnated because any improvement caused births to exceed deaths. The resulting population growth, pressing on fixed land resources, inevitably pushed incomes back down to subsistence.

But living conditions did vary across pre-industrial societies. Perversely, rich societies were those where nature or man created high death rates. In such settings living conditions could be good as long as the population did not grow. In the Malthusian era, what is now vice in economic policy — violence, poor public health, war, inequality — was virtue in terms of living standards. And what is now virtue, vice.

But much of Africa is still trapped in its Malthusian past. Indeed, material consumption has fallen well below the preindustrial norm as a result of the Western gift of modern medicine and hygiene. A host of countries, such as Malawi or Tanzania, would be better off materially had they never had contact with the industrialized world and instead continued in their preindustrial state.

Alms Watch 2007

  • Farwell to Alms is reviewed at the NYT. Blog commentary here, here and here.
  • Borjas discusses a report that rich people are starting to have more kids… So let’s see, before 1800 they had more kids, there was a demographic transition so that more recently they had fewer kids and now there may be a trend back to more kids… phew, that’s a lot for a rationalizing model to explain
  • gnxp talks about peer groups and gene/environment interactions, “40% of unattributed component of variation of personality is due to our peer groups (10% is parents and 50% is genes).”
  • Jonathan discusses the much talked about study that showed social networks (aka “peer groups”?) determine what are acceptable weights. “What appears to be happening is that a person becoming obese most likely causes a change of norms about what counts as an appropriate body size. People come to think that it is okay to be bigger since those around them are bigger, and this sensibility spreads.”

UPDATE: Another response to the NYT piece over at scienceblogs.

More on a theme

I noted before that Prof. Clark’s non-explanations (as The Economist put it) are a theme around here. Resident superstar blogger notsneaky comments on a previous post and I reply:

Clark has a chapter in his book called “the rise of modern man” suggesting modern (post-Malthusian) people are different than their ancestors in ways you suggest (e.g. they’re more patient, but also smarter, harder working and less violent).

For example, interest rates declined steadily over the centuries. One by one, using the usual Ramsey results on interest rates, he eliminates the possible reasons for this. Growth premium? Nope, there was no growth pre-1800. Risk premium? Nope, the King didn’t really confiscate too much and the characteristics of death statistics didn’t change much in the Malthusian era. Without stating it, the only thing left to cause steadily declining interest rates is changes in time preferences.

He then discusses rising levels of literacy, eliminating the possibility that people were responding to market pressures to increase their human capital… one by one, knock ‘em down… he shows work hours increased and violence decreased. It could only mean one thing… you know, the obvious thing… which was… well you know.

So you could counter Clark by arguing against each of these points, e.g. “yeah, maybe the King didn’t expropriate that often, but when he did it was a big deal, usually accompanied by a disembowelment or two”. Or you can take issue with the Ramsey model itself. But my biggest issue is that Clark never develops a positive theory of the “rise of modern man”, he simply tries a proof by exhaustion showing all the things that couldn’t explain the facts on demographics and interest rates.

To be fair, though, he hints, using testate records, that these deep parameters developed by selection.

To me that’s just a huge can of worms. What is being selected? Genes? Is there a temperance gene? If its genes, are there evolutionary models that select for such sophisticated behavior in just a couple of centuries? Instead were memes being selected? If so, what the hell are those?

UC Davis Econ in the News

Its a two-fer today… The Economist talks about Prof. Clark:

Mr Clark argues that differences in modern economic development are rooted in differences of labor quality. That is, rich countries are rich because their workers are better… Mr Clark is perhaps wisely circumspect in his (non-)explanation of the underlying causes of differences in labour quality. He rather unhelpfully posits that “economies seem, to us, to alternate more or less randomly between relatively energetic phases and periods of somnolence.”

Clark’s “non-explanations” are a bit of a theme.

UC Davis Econ in the news

Prof. Peri (ick, fix your website dude) writes a review of his immigration research and The Economist comments:

To an economist, one of the most aggravating aspects of debates on immigration and trade is the lack of perspective. There is often a great deal of hyperbole about the costs and very little exploration of the benefits. The view of trade (in goods or labour) is generally stunningly myopic, with little examination of the broader impacts on all workers… Peri’s analysis also underscores a more insurmountable bias, one that was diagnosed by French journalist Frederic Bastiat over a century and a half ago: the tendency to focus on what one can see (the Mexican workers taking the place of American workers in certain jobs)at the expense of less visible costs and benefits (the overall increase in aggregate productivity and job growth). Call it the “what-is-seen” bias. But no matter what you call it, it’s just the sort of thing that stymies the agenda of immigration and trade liberalizers worldwide.