Economics & Marginalia: May 5, 2023

Hi all,

There’s something just perfectly British about having local elections just 48 hours before an obscenely wealthy 70-something puts on a hat made from plundered jewels, sits on an ancient bit of granite and becomes King. The local elections are just about as pure a form of democracy as possible, in which someone from the end of the block can run for the local council on the platform of scraping the chewing gum off the windows of the Dog and Duck pub; the coronation is a dude worth £1.8 billion grinding public transport in the city centre to a halt so we plebeians may pay obeisance to him for the good fortune of being borne into the right family, before we continue to subsidise his family (rather than selling off their property to start up a sovereign wealth fund, for example). FiveThirtyEight point out that people in the UK have broadly positive views of Charles (and, to be perfectly fair to him, it could be much worse; it could be his brother); LitHub point out how jarring it is that he gets his own Little People, Big Dreams book (how is he a little person?! And wasn’t his dream just to live long enough to claim what was literally his birthright?). I’ll watch a bit on the TV, but the only King I currently recognise needs to find three wins and a new plantar fascia, doublequick.

1. I mentioned a big number in that preamble: 1.8 billion. Do you know how big that is? Can you visualise how much bigger it is than 1 million? I deal with numbers that range from quite small ($2.15, to pick one at random) to very large (turning billions into mythical trillions, for example), but even for me it’s still a surprise to see it visualized. The best thing I read this week was, I think, Sarah O’Connor’s confession: “I hate big numbers” (FT, so register or subscribe). It’s not that she’s mathematically challenged, it’s that big numbers, used without context typically confuse the audience they’re aimed at, rather than illuminate the topic they are ostensibly about. This is, of course, usually the point: politicians and press releases (and abstracts of academic papers!) often use numbers without context to create a vibe: look how much this matters! Or, indeed, how little! And sometimes we scale the same number to achieve either vibe. The aid budget is around 12 billion pounds. That’s big! (or is it?). Alternatively: UK aid costs about as much as a first class stamp a day per taxpayer. That’s tiny! (or is it?). I think we do this most egregiously with big numbers, but Sarah’s argument generalises. Numbers only really have an intuitive meaning when they are related to something concrete. They are very easy to misuse and we all do it far too much.
2. Another big number is a trillion, which was the dollar value of the metaphorical bill Michael Clemens saw lying on the pavement in 2011. With that article, Michael more or less revolutionised the study of migration as an economic and development phenomenon; his research and the research of scholars he has worked, mentored or inspired is all over this year’s World Development Report, on Migrants, Refugees and Societies. He’s cited 63 times; his influence is visible everywhere. And it matters, as Helen Dempster and Cindy Huang write here.
3. We often say that migration is a policy area with little traction; and in some senses that may be true (it’s hard to get a politician to *say* they’re adopting a radically pro-immigration policy, and they often do very dumb and harmful things in the field). But the way our societies are changing may belie that opinion. John Burn-Murdoch says that when you look closer, “[t]he data paints a picture of countries that are increasingly diverse — and increasingly relaxed about that fact.” (Again, FT, so register or subscribe, sometimes the good stuff is behind a paywall). His final point, that our perception that things are going backwards may in part be because with more diversity, we become more aware of the failings of our societies on race and diversity rings true. I often comment to my wife that I see people today being Asian, casually, on TV, in a way that they never did on TV shows or in movies when I was growing up. Their Asian-ness was always the point. That’s no longer always true, and it feels incredibly liberating as an Asian viewer.
4. Speaking of things that are often misunderstood (including by me): Planet Money discuss AI and it’s effect on jobs and inequality with Erik Brynjolfsson; and he has field research to back him up. He finds in a customer service centre, the use of AI to support workers both increased productivity and customer satisfaction, but notably supported the least skilled workers more than the most skilled. This isn’t a surprise, since the AI basically learns from the best and then tries to guide the less good to be more like them. But it does has quite different implications for inequality than the old story of technology bringing benefits only to those skilled enough to harness it; though anyone who claims to know how this will all shake out is pulling your leg.
5. Huge congratulations to Gabriel Zucman, a genuinely important and impressive scholar, for winning the John Bates Clark medal. Tyler Cowen can barely contain his excitement; The Economist have a write-up which gives some voice to his critics (which largely boil down to “your assumptions are not the ones I would make”, which is legitimate grounds for disagreement, but the argument can only be settled empirically; if we have learnt anything from the migration literature, it’s that once the empirics are firmly established, they can upend years of established assumptions).
6. Let’s close the econ portion of the links with more big numbers. Specifically, does winning the lottery (usually winning a big dollar number by guessing a big number correctly) make you less happy? There’s certainly more literary mileage in the rags-to-riches-to-rags template the media so love, but Tim Harford points out that for the most part, that story is incorrect. Money can be used to make your life more comfortable (“it may not buy happiness, but at least I can be miserable in comfort”); to remove inconvenience from one’s life; and to plan for the future. On the whole, getting a big bunch of money leads people to do just that.
7. We’ll end on the absence of a big number. Ed Sheeran won the $5.3 million copyright infringement case brought against him, for using a chord progression in one of his songs that was reminiscent of Let’s Get It On, by Marvin Gaye. I’m not a fan of Ed Sheeran, but this was surely the right outcome from a social benefit perspective. If there is a problem with modern music, it definitely isn’t that too much of it sounds like Marvin Gaye; we are not swamped with songs that bring it quite as hard as Please Stay (Once You Go Away); I have not been complaining that the duets of today make Tammi Terrell’s songs with him sound commonplace; we’re not bored with James Jamerson’s bassline from What’s Going On. If anything the whole thing illustrates that you can steal the notes, the tempo, the style, but somehow you just can’t steal the sound. And we’d be much better off if you could.

Have a great weekend, everyone!

R