Economics & Marginalia: May 28, 2021

May 28, 2021

Hi all,

The one benefit of a baby up at 4 in the morning with teething pain and demanding (loudly, repeatedly and convincingly) to be held in order to sleep is that it lets you keep up with events on the West Coast of the US, and in particular, LeBron doing LeBron things yet again. You could teach theories of economics using him: adaptive expectations – LeBron’s team made the finals nine out the last ten years, so we expect the Lakers to make the finals this year. Rational expectations: LeBron is playing at MVP level again, and there is no evidence to suggest he slows down as the postseason progresses, so we expect the Lakers to make the finals this year. Sometimes the underlying model doesn’t do much to change the equilibrium. Meanwhile, Sri Lanka are showing signs of life in the cricket again, so I retain some hope that by the time my son is old enough to understand the rules of the game (conservatively, by the time he’s 18 months old; I am prone to optimism bias), we may have a team worth watching. Hope springs eternal.

  1. One of the best things I read all week was this essay by the philosopher Liam Bright, about why scientists lie. He starts from the simple observation that most academics have self-selected into an occupation that pays less than alternative uses to which their PhD can be put, and are – presumably – motivated by the pursuit of truth. If this is true, why does scientific fraud occur? Bright’s essay considers a central contradiction in how we understand scientific fraud: that the social system that gives rise to it through the warped incentives with which it entices scientists is also at root of the best characteristics of scientific endeavour. That is, we can’t simply remove the incentives to cheat without removing some of the most powerful incentives to do good science. He has no solution to scientific fraud (it is a philosophy essay, after all) but a suggestion that to solve it requires understanding the whole underpinnings of the enterprise, not just what gives rise to bad behaviour.
  2. I recently linked to Daniel Kahneman’s lunch with the FT, saying that more than being right or wrong, I found his writing and thinking to be interesting. Well, given the tepid reaction to his new book (with Cass Sunstein and Oliver Sibony) among statisticians, it seems that a lot of people find at least this book to be wrong, more than right or interestingAndrew Gelman gives it a bit of a savaging in this review (building on a tweet by Rachael Meager, who if you don’t follow on twitter, what even is your twitter for?). Kahneman himself pops up in the comments to defend his ideas and the book, and it’s worth reading. Gelman really dislikes Sunstein’s work, that much is very clear.
  3. Back to the UK for a moment, my own piece this week about what we can infer about the FCDO’s strategic direction from what we know about what it is still funding (as opposed to what it is cutting, information that has been dripping into the public domain haphazardly) involved a bit of detective work. I conclude that, amongst the carnage, you can make out the key strategic choices; you may disagree with them, but they are there. The key challenges for the future revolve around forestalling further depredations that undermine these choices and the good the FCDO can still do. Also from CGD though on a very different topic, Michael Clemens and Helen Dempster look at how countries have misinterpreted the WHO’s guidelines on the international recruitment of health workers, why that’s damaging, and what they should do.
  4. Tim Harford’s piece on intellectual property, the hot topic du jour in these insufficiently vaccinated times, is typically sensible, and typically pithy. He argues that the idea that IP protection is good for nice people and bad when given to scoundrels is not exactly a good basis for policy – and suggests that breaking the policy question down to ‘reward’ and ‘incentive’ is a bit more helpful. His argument carries weight: as he says, The Great Gatsby entering public domain only this year points out the limits of both arguments as justification of the protections actually awarded. Fitzgerald has been dead since the early days of World War 2; he is unlikely to have had much use for the money made from his book since then, nor been encouraged to write more.
  5. On the failings of the economics discipline, part 2,391,382,001: Arun Advani and co-authors look at exactly how little economists have grappled with questions of race and discrimination by comparison with other disciplines, and how much we over-estimate the richness of this particular economic literature. On the one hand, these findings are pretty grim; on the other, this kind of meta-economics was virtually unheard of for most of my career as an economist and that in itself offers some grounds for hope.
  6. Kaushik Basu sounds the alarm over the prospect of a ‘great divergence’ in the pandemic recovery, not just across countries, but within them as well. He particularly worries that a recovery that leaves the rich intact – or even better off – while hammering the poor will be ignored by Governments that are much more responsive to elites, at least until they simmer over from discontent to disorder.
  7. And lastly, after a long week of working, being up in the middle of the night and stressing over the massive Himalaya of deadlines that is constantly threatening to throw an avalanche on my head, I really need some bubblegum for the brain; my wife and I started watching Master of None’s third season, hoping for a bit more of Aziz Ansari butchering the world Allllllllora, but no. Instead, it was like someone ate Andrei Tarkovsky and vomited him onto a Neflix series. I’m as much of one for classical cinema as the next person – but it’s got to be good. No more 30 second shots of a horse looking quizzically at the camera, please. Thank god the Venom 2 trailer has landed. This is the content I am waiting for; and if – like me – you can’t wait for Woody Harrelson to chew the scenery, and his co-stars, as Carnage, the Ringer have a second-by-second breakdown of the trailer.

Have a great weekend, everyone!



CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.