Some useful reminders from Professor Somin.
Here is a nice piece from The Economist. Most of it deals with the switch from hunter/gatherers to farmers, which was initially difficult, but offered high rewards relative to the alternative. The same logic can be applied to the industrial revolution:
Notice a close parallel with the industrial revolution. When rural peasants swapped their hovels for the textile mills of Lancashire, did it feel like an improvement? The Dickensian view is that factories replaced a rural idyll with urban misery, poverty, pollution and illness. Factories were indeed miserable and the urban poor were overworked and underfed. But they had flocked to take the jobs in factories often to get away from the cold, muddy, starving rural hell of their birth.
Eighteenth-century rural England was a place where people starved each spring as the winter stores ran out, where in bad years and poor districts long hours of agricultural labour—if it could be got—barely paid enough to keep body and soul together, and a place where the “putting-out” system of textile manufacture at home drove workers harder for lower pay than even the factories would. (Ask Zambians today why they take ill-paid jobs in Chinese-managed mines, or Vietnamese why they sew shirts in multinational-owned factories.) The industrial revolution caused a population explosion because it enabled more babies to survive—malnourished, perhaps, but at least alive.
It also discusses the high levels of violence and environmental destruction associated with hunting and gathering – which contradicted the long held intellectual view of primitive peoples living happily with each other and with nature. The major evidence for this view seems to have been the desires of these intellectuals for it to be true.
The article offers some parting wisdom as well:
There is a modern moral in this story. We have been creating ecological crises for ourselves and our habitats for tens of thousands of years. We have been solving them, too. Pessimists will point out that each solution only brings us face to face with the next crisis, optimists that no crisis has proved insoluble yet. Just as we rebounded from the extinction of the megafauna and became even more numerous by eating first rabbits then grass seeds, so in the early 20th century we faced starvation for lack of fertiliser when the population was a billion people, but can now look forward with confidence to feeding 10 billion on less land using synthetic nitrogen, genetically high-yield crops and tractors. When we eventually reverse the build-up in carbon dioxide, there will be another issue waiting for us.
Here’s a nice piece that I saw on Arts and Letters Daily:
To Prof. Peterson, though, belief is not optional. And regardless of the specific belief, he maintains it is as necessary as air and water.
At its most basic level, belief acts like a set of headlights to guide us through a foggy universe that “is far more complicated than we are smart.” So belief is eradicable, he said, because there will never be a time when we know everything.
I like to think that the only thing I have faith in processes in which failure is easily identifiable and eliminated.
Per the recent discussion on the gold standard, the Fed’s process of setting interest rates doesn’t meet this standard. The Fed giveth and the Fed taketh away.
Paul Krugman, of Princeton University, has recently argued* that contemporary America's widening income gap is ushering in a new age of invidious inequalities. But a peek at the numbers behind the numbers suggests that Mr Krugman has been misled: far from a new Gilded Age, America is experiencing a period of unprecedented material equality. . . .This compression is the predictable consequence of innovations in production and distribution that have improved the quality of goods at the lower range of prices faster than at the top. New technologies and knock-off fashions now spread down the price scale too fast to distinguish the rich from the aspiring for long.This increasing equality in real consumption mirrors a dramatic narrowing of other inequalities between rich and poor, such as the inequalities in height, life expectancy and leisure. William Robert Fogel, a Nobel prize-winning economic historian, argues that nominal measures of economic well-being often miss such huge changes in the conditions of life. “In every measure that we have bearing on the standard of living…the gains of the lower classes have been far greater than those experienced by the population as a whole,” Mr Fogel observes.Some worrying inequalities, such as the access to a good education, may indeed be widening, arresting economic mobility for the least fortunate and exacerbating income-inequality trends. Yet even if you care about those aspects of income inequality, the idea can send misleading signals about the underlying trends in real consumption and the real quality of life. Contrary to Mr Krugman's implications, today's Gilded Age income gaps do not imply Gilded Age lifestyle gaps. On the contrary, those intrepid souls who make vast fortunes turning out ever higher-quality goods at ever lower prices widen the income gap while reducing the differences that matter most.
We should hope that the tie survives. It is too noble a garment to let go for light and transient, or dark and sinister, causes. The good news is that Mr. Obama's foray into tielessness does not stem from deeply held ideology. When it really counts, he does the right thing. No doubt, should he make it to the end, his neck will be covered on inauguration day. Just like JFK's head.
In my response to Dr Cowen’s post on Ron Paul below, I didn’t say much about his charge of anti-intellectualism against Dr Paul.
Yet the historical record of intellectuals controlling the reins of government aren’t great. Jonah Goldberg’s review of Amity Shlaes’ book The Forgotten Man in the newest Claremont Review of Books is a good reminder. The economic advisors at the time who suggested wage and price freezes, and the advisors who controlled the Fed, didn’t exactly help out.
Might Dr Paul’s position that we take whatever hardships are caused by the free functioning of the of the market and in exchange give up the massive screw-ups that are caused by incorrect expert opinion be a position that has some historical validity, anti-intellectual as it is?