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Waxman, Berman and Miller -- we will miss their leadership

Henry Waxman has announced he will not run again for his Congressional seat this year. He represents California's 33rd Congressional district, which is where I grew up. He attended UCLA a few years behind me. This is his 20th term in Congress. According to the Los Angeles Times

During a congressional career that began when Gerald R. Ford was president, Waxman became one of the Democratic Party’s most prolific and savvy legislators, focusing on issues related to healthcare and the environment. He played a central role — sometimes over opposition within his own party — in passing laws that dramatically cut air pollution, helped reduce smoking, expanded Medicaid coverage for the poor, reduced pesticides in food, made generic drugs more widely available, helped AIDS patients, promoted the development of drugs for rare diseases and improved federal regulation of nursing homes.

Howard Berman left Congress in 2013. He graduated from the same high school I did, a few years after me, and was at UCLA with Waxman, a fellow member of the university's Young Democrats. He served 15 terms in the House of Representatives. He lost an election in 2012 due to redistricting. The Los Angeles Times described him in the following terms:

 He is a liberal who has lent important support to Israel, consistently votes to protect the environment and has delivered for his district. He has served California in Congress since 1982 and enjoys considerable seniority, serving as the ranking Democrat on the House Foreign Affairs Committee and the second-ranking Democrat on the Judiciary Committee. Those positions give Berman broad influence; he is one of Congress' most highly regarded foreign policy lawmakers and is a leading voice on intellectual property issues, a topic close to the heart of his constituents in the entertainment industry. Finally, though he has a long record of bipartisan achievement, he is supported by the overwhelming majority of the California Democratic congressional delegation, including both of the state's U.S. senators, as well as by Gov. Jerry Brown.

George Miller has also chosen not to run again this year.  He currently represents California's 11th Congressional district, having switched as a result of redistricting from the 7th Congressional District. These include part of central California. Miller is serving his 20th term in Congress. According to Politico

Nancy Pelosi’s strong right arm and one of the top Democratic legislators of his generation, is stepping down at the end of this year after four decades in Congress........Miller was a player in the passage of the Affordable Care Act of 2010 as well as the No Child Left Behind Act of 2002 backed by then President George W. Bush and the future Speaker John Boehner. Miller helped write the last minimum wage increase with Kennedy in 2007, and through the years used his committees as a forum to highlight worker safety conditions in the coal, oil and apparel industries.

Having grown up in Los Angeles in about the same time as Waxman and Berman, and having attended the same schools, I feel some real linkage with them. I went to school at Berkeley for a couple of years, and that helps me to feel closer to Miller than I might have, since he grew up and was schooled in the Bay area.

We were all of an age to have been affected by the music of Pete Seeger and Joan Baez. As young men we all would have heard John Kennedy tell us to ask not what our country could do for us, but what we could have done for our country; we saw Martin Luther King lead a great crusade for human rights, and heard Bobby Kennedy speak on the evening of King's death. No wonder these politicians became active in Democratic politics in the 1960s, as did I.

Waxman and Miller came to Washington in the 1970s (as I did, to work on international development as a federal employee, and thus unable to participate in politics); Berman came a few years later. We all spent a great deal of our adult lives here.

The Congress has lost three liberal leaders, who have had great influence in health, environmental, foreign, and educational policy. I personally will miss knowing that they are in the Congress fighting the good fight. I fear the nation will miss their leadership, and their ability to work across the isle to advance a legislative agenda that the nation needs.

About Socio-Economic Development

I seem to have an unusual view of development. Let me state it again.

The Purpose of Development

I think the purpose of development is that people live better. I tend to believe that a dollar more income does a lot more for someone who has few dollars than for someone who has many dollars. I also tend to believe that relieving hunger, illness, disability is important. Meeting basic human needs is in the realm of human rights, and trumps efforts to allow people to lead more comfortable lives. But living better also involves living a more moral and responsible life, participating more fully in family, community and nation.

Doing Things Better

The process of development is a process of doing many things better and better. It involves increasing productivity -- getting more bang for the buck. That is increasing the productivity of farms, factories, schools, health facilities, government offices, banks and all the other productive units in the society. It involves substituting more efficacious treatments for less efficacious ones, and inventing new products and processes that. It involves achieving more effectiveness in large scale (e.g. it is no use to produce more food if the added production is wasted in the distribution and consumption process).

The process of development on a national level involves doing many things better and better by very many people. It may start with a minority, but eventually lots of people throughout society are going to be doing better things better.

Creating Better People

Central to the process is improving people as development actors. That includes people who are healthier and less afflicted by disabilities accumulated over their lifetimes. It includes people who are better schooled, and able to learn and carry out development tasks better and better. People should be becoming better workers, better managers, better citizens. Indeed, since trust is the glue holding much of society together, people should be becoming more trusting and more trustworthy.

Better Identifying, Managing and Utilizing Resources

Better identifying mineral resources, forest resources, fishery resources, soil resources, water resources, renewable energy resources, and indeed human resources is an important aspect of development. These resources have to be well managed in order not to be wasted. And most importantly they have to be applied effectively to promote the other aspects of development and production.

Energy

At an early stage of development, progress is made substituting energy in internal combustion engines and electrical networks for human and animal muscles. In later stages, development involves utilizing energy more and more to achieve the purposes of development and production. We have also discovered that development involves energy efficiency -- using the energy we have better.

Physical Capital Accumulation

Economists have long recognized that capital accumulation is critical to economic development. Here I am not discussin the monetary value of the capital. Development is based on physical capital -- roads, electrical power systems, irrigation systems, ports, railroads, ships, planes and vehicles, buildings, machines, and the increase the productivity of people and resources, and help people to live better. Development involves increasing the stock of such goods, improving the quality of the stock, and managing the stock to maximize its productivity and developmental utility. Better physical capital, better used.

Improving Technology

Here I am speaking of the body of knowledge of productive techniques. That knowledge may be embodied in machines, in supplies (such as drugs, pesticides, lubricants, materials, or coatings), in people or in institutions (that is, diffused in the people and things that make up an institution), these days in software and data banks, or even in disembodied forms such as books. As people get more tools with which to work, the technology for that work must change, and thus the technology embodied in the workers, machines, physical inputs and organization must change as well. Thus development involves managing the body of technological knowledge (acquiring new knowledge and discarding knowledge that is no longer useful; changing how or where knowledge is embodied) in such a way as to increase productivity and the accomplishment of the purposes of development.

Organizing Better

Businesses need to be organized to be more innovative and productive, as do governmental bureaucracies and non-governmental (civil society) organizations. Markets need to work better, as do market like institutions such as those that connect aspiring students to schools, colleges and universities, or job seekers to potential employers. Organizations need to be re-engineered to take better advantage of information and communications technologies, and sectors need to be restructured to allow businesses to function better. Some have termed this institutional development

Planning Better

People make plans at all levels of society. A teacher makes lesson plans for the day's lessons; a farmer makes plans for the years crops; a business makes plans for its yearly operation and its expansion; a government plans fiscal and monetary policy. Plans that once worked fine, no longer function well as development occurs and progress is made; thus planning is a continuous function in development, and the quality of development depends on the quality of the plans. Indeed, it seems likely that planning should get better and better with development -- based on better information, better analytic approaches, and developed in such a way to improve plan implementation.

The Bottom Line

In my view, development is something accomplished by people working to make society function better and better over time. It is rooted in real things -- resources, physical capital, and especially the abilities of people themselves. Fundamentally it involves producing more and more efficacious goods and services. It is based in people becoming better at what they do, in better organizations, and in better plans. To work, it must be pervasive, with improvements spread widely over a culture, society, polity and economy. Ultimately, development depends on cultural change and produces cultural change, ideally in a virtuous cycle.

As cars become more common, so do auto accidents.

There is an interesting point made in an article from The Economist:

Every 30 seconds someone, somewhere, dies in a road crash, and ten are seriously injured. The toll is rising: the World Health Organisation (WHO) expects the number of deaths globally to reach nearly 2m a year by 2030, up from 1.3m now. But the pain will fall far from equally. Rich countries are making roads safer and cutting casualties to rates not seen for decades, despite higher car use. Poor and middle-income ones will see crashes match HIV/AIDS as a cause of death by 2030 (see chart). In the very poorest, the WHO expects deaths almost to triple.

While death rates from communicable diseases such as malaria and TB are decreasing, those from automobile accidents are increasing in developing countries. Of course, that means that injuries and long term disability rates are also increasing related to auto accidents. Moreover, there is a huge financial cost. 

A thought on risk aversion

There is an article in The Economist on risk, pointing out that people tend to be risk adverse. If you ask people whether they would rather have $50 in hand, or a ticket to a lottery that would pay $120 half the time or nothing the other half of the time, most would prefer to take the cash. This is in spite of the fact that if you had the bet many times, one would do a lot better taking the odds. (Ask any casino owner; they make mints of money with much more modest odds in their favor.)

The article also notes:

Upbringing, environment and experience also play a part. Research consistently finds, for example, that the educated and the rich are more daring financially. So are men, but apparently not for genetic reasons. Alison Booth of Australian National University and Patrick Nolen of the University of Essex found that teenage girls at single-sex schools were less risk-averse than those at co-ed schools, which they think may be due to the absence of “culturally driven norms and beliefs about the appropriate mode of female behaviour”. 

People’s financial history has a strong impact on their taste for risk. Looking at surveys of American household finances from 1960 to 2007, Ulrike Malmendier of the University of California at Berkeley and Stefan Nagel, now at the University of Michigan, found that people who experienced high returns on the stockmarket earlier in life were, years later, likelier to report a higher tolerance for risk, to own shares and to invest a bigger slice of their assets in shares.

It has long been my opinion that we should do simulations of markets assuming that attitudes toward risk are randomly distributed. That seems intuitive to me. Consider parimutual betting at a race track; some people would rather bet on a longshot others on a favorite, the betting is not simply due to differences in estimation of the odds on winning. 

The Geography of Income in the USA

Source: Wikipedia

There are very large differences in median household income in different counties in the United States. The east coast and the west coast have large green areas on the map, as expected, and there are large swaths of white in the south and four corners area. Some of the other affluent areas are harder to explain -- perhaps the energy boom in North Dakota, Denver in Colorado are intuitively affluent, but how about the big area in Wyoming?

Income unlike water, has been flowing uphill!

The graph is from the Harvard Business Review Blog. It is still another way to visualize the shift in income in the United States from the rest to the affluent. Only the top quintile is getting more of the pie, and the middle quintile -- the prototype of the middle class -- is losing more of the share. The poorest 20 percent, who have little to spare, are losing a significant portion of the share that they had.

The blog post also said:

• From 1993 to 2013, incomes of the bottom 99% of taxpayers in the U.S. grew 6.6%, adjusted for inflation. The incomes of the top 1% grew 86.1%.
• The top 0.1% of U.S. taxpayers claimed 11.33% of overall income in 2012, up from 2.65% in 1978. The top 0.01% got 5.47%, up from 0.86% in 1978.
• The average income of the top 0.01% was 859 times that of the bottom 90% in 2012. In 1973 the top-0.01%-to-bottom-90% ratio was just under 80.

That is one ten-thousandth of the population got five and a half percent of the total income, more than the combined incomes of the bottom 20%.

Also:

All that wealth sloshing around in the top 1% leads to more bubbles and crashes. Extreme wealth corrupts the political process.  Income inequality may be slowing overall economic growth. And, as my colleague Walter Frick put it in an email when I brought this up, “given the diminishing marginal utility of income, it’s hugely wasteful for the super rich to have so much income.”

The Geography of Economic Mobility in the USA

Economic Mobility by State 2012

Source: Pew: Economic Mobility by State

Apparently President Obama wishes to direct national attention to the lack of economic mobility in the United States. Certainly that is an important problem. The story we have told ourselves about this country is that anyone could get ahead. Now other developed countries have more economic mobility than we do. This is especially a problem since the economic growth in the nation is not being shared with the poor and middle class, but being monopolized by the affluent, and especially the very rich.

The map above shows that poor economic mobility is concentrated in the old south, Missouri, Iowa and the Dakotas. Better than average economic mobility is found in a number of northeastern states, Michigan, the far west, Colorado and Utah.

Notably, the core of Republican conservatism is in states with less than average economic mobility and the core of Democratic progressive politics is in states with more than average economic mobility. Economic mobility seems to be related to urban areas, those with high levels of education and jobs for the educated; lack of economic mobility with rural areas with lower levels of education and lower levels of white collar jobs.

Can one suspect a cycle, in which the culture produces conservative or progressive culture, which leads in turn to further growth of the aspects of the culture consonant with that conservative or progressive culture?

A thought on reading about the Reformation.

I have been reading The Reformation: A History by Diarmaid MacCulloch. In the book, the author has an appendix with the Apostles Creed and the Nicene Creed, because they are widely shared expressions of the basics of Christian faith, used in the Roman Catholic and many Protestant churches (as well as Orthodox churches).

According to Wikipedia, the Nicene Creed was first adopted in 325 in the First ecumenical Council held in Nicaea. A revised version was adopted in the First Council of Constantinople of 381.

Again, according to Wikipedia, the earliest recorded mention of the Apostles Creed dates to 390 and the earliest written copy is from the 8th century.

One or other of these two creeds is recited in the Roman Rite Mass on Sundays and other special occasions. Similarly, the Nicene Creed is used in the Byzantine Rite. Thus, huge numbers of Christians regularly recite/hear the declaration of the content of their professed faiths in these Creeds.

According to Wikipedia:

The purpose of a creed is to act as a yardstick of correct belief, or orthodoxy. The creeds of Christianity have been drawn up at times of conflict about doctrine: acceptance or rejection of a creed served to distinguish believers and deniers of a particular doctrine or set of doctrines. 

and:

The Nicene Creed was adopted in the face of the Arian controversy. Arius, a Libyan presbyter in Alexandria, had declared that although the Son was divine, he was a created being and therefore not co-essential with the Father, and "there was when he was not,"

The Nicene Creed was originally written in Greek, later translated into Latin for the Christian church centered in Rome, and has been translated into many modern languages (with all the problems involved in modern language versions of ancient language texts). Here is a section drawn from one of the English translations of the 381 text:

We believe in one God, the Father Almighty, Maker of heaven and earth, and of all things visible and invisible. 

And in one Lord Jesus Christ, the only-begotten Son of God, begotten of the Father before all worlds (æons), Light of Light, very God of very God, begotten, not made, being of one substance with the Father;

If one asked a theologian involved in the Constantinople Council what the second paragraph meant, I suspect that he would have been able to tell you in detail, and specifically:

• What was meant by "begotten",
• What the evidence was from biblical texts and learned analysts for Christ having been "begotten",
• What was meant by "made". and
• What the evidence was from texts and learned elders for Christ not having been "made".

Were one to ask a modern Roman Catholic who has many times recited the Nicene Creed whether he believed Jesus Christ had been "begotten, not made", I suspect he would respond yes, because it was the settled doctrine of his Church. (I know that I had a duck named Donald when I was a small child because my parents told me so; I have no doubt of the fact, but no evidence that Donald ever existed.)

However, I believe that our modern Roman Catholic would be much less able to explain what "begotten, not made" meant specifically than the members of the Constantinople Council more than 1700 years ago.

Actually that makes sense that modern members of the churches might profess faith that they do not understand. It is very useful to have settled matters; we don't need to know all the details of the arguments that support them and the refutations of the counter-arguments. We can simply believe

• the scientific consensus that the earth spins on its axis and orbits around the sun, 
• the jury verdict that the evidence was not sufficient to convict OJ of murdering his wife, and 
• the electoral college that Barack Obama won the 2012 presidential election.

The modern Christian can focus attention on other matters of faith and religion that seem more relevant and pressing.

Still, in the past coming down on the wrong side of the question of whether Christ was "begotten, not made" could get someone burned as a heretic, depending on the theology held by of those in power where he that believer lived. Somehow it seems wrong that life or death should depend on one's belief on such a matter. (Maybe that is because I am an American, with a deep tradition of separation of church and state, and an even deeper tradition of state monopoly over lethal force.)

Moreover, our understanding of "all things visible and invisible" is so different today than that of people 1700 years ago, that I wonder if we can truly understand what they thought about the nature of a supreme being that created all things visible and invisible. Indeed, the scientific revolution has resulted in a new approach to knowledge, testing ideas by observation and experiment rather than review of texts and authorities so the theologian's methods, derived from the humanists', of seeking truth from old books is -- for me -- suspect. A friend suggested, and I suspect that he is right, that modern man has learned to be more skeptical than were our ancestors. Ultimately, I rather doubt that the folk who wrote the Nicene and Apostles Creeds could understand the universe as we do, nor the way we seek to understand the creation of the universe; nor can we really understand the way they perceived the world and thought about it.

Icon depicting the Emperor Constantine,
accompanied by the bishops of the First Council of Nicaea (325),
holding the Niceno–Constantinopolitan Creed of 381.

Who benefited how much from two decades of economic growth?

Source: Pew Research Center

I think I can explain this graph. The horizontal axis is the percentile of global income. Thus at the point half way between 45 and 55, you have people at the mid point in global income (probably a band from 47.5 to 52,5 percent of global income. The authors of the table must have taken the estimate of average real income for this group in 2008 and subtracted that in 1988 to calculate the "real income growth". Note that the same people or indeed the same countries may not be in the same income group over a 20 year period.

Still, I think the point made in the chart is important. The increase in real income over a two decade long period helped a large swath of people who were relatively poor. Look however at this chart from the original source:

Source

Those in the top five percent of the income distribution got so much of the total, that there percent increase made them a lot more money. Thus the top one percent who got 60 percent more income in 2008 than the top one percent got in 1988, also got 27 percent more of total gains of income. The top five percent took more than half of the total gain. (Again, some new billionaires joined the top one percent, some individual rich people dropped out over the two decades.)

Thus the picture is mixed. There remained a group of very, very poor people. Some income growth went to a wide swath of low income groups who actually benefited quite a bit. The middle class in the developed world tended to do poorly. The rich got richer.

The Geography of U.S. Lack of Economic Mobility

The Washington Post has published this map describing the geographic areas in which children find it hardest to escape poverty:

Iowa, Minnesota and Wisconsin. Meanwhile, Georgia, South Carolina, North Carolina, and Mississippi do the worst job helping kids advance. 

That's what a careful analysis of new income data from Harvard's Equality of Opportunity project shows.  The underlying study, which Jim Tankerlsey wrote up here, is fascinating and challenging -- it suggests that economic mobility, contrary to what many thought, hasn't changed much over the last 50 years. But it also found that geography is a massive predictor of future mobility. Head over to the map to see where your county ranks.

 Georgia, the Carolinas, Mississippi and Virginia -- where children are most likely to remain as poor as their parents -- are from the old Confederacy, the home of slavery and Jim Crow. The big blue counties in the southwest, in what we call the Four Corners region, are areas of large American Indian populations, where again there is a history of racial prejudice against the Indians.

Whatever the cause, the lack of opportunity in many counties in the United States suggests that the country as a whole will progress economically less rapidly that it might.

I have trouble understanding the Republican Right Wing.

The Pew Research Center has just published a report that most people in a large sample believe that inequality is increasing in the United States. There is some difference between Republicans, Democrats and Independents in the frequency of that belief, but in all cases more than two out of three respondents agreed that inequality was increasing.

Note then the difference in the following table, also from that report:

I believe that there is evidence that inequality of wealth and incomes decreases the rate of growth of per capita GDP. If the GDP is growing slowly, and most goes to the rich, then poverty will only slowly be reduced. If in fact, the GDP grows slowly and the rich take an ever larger portion of the GDP, the poor will benefit very little if at all. Even if that is not clear to Republicans, the effects of lowering taxes on the rich and on corporations should be clear, since they have not led to rapid growth.

Government aid to the poor, who include large portions of children, single mothers, the disabled, the old, and the working poor, seems obviously going to do a lot of good. I am not sure why so many Republicans think it will do more harm than good -- that is why they think these people without government help will become more independent, not just poorer.

Is randomized case controled experiment always the best way to evaluate a treatment?

I recently read a report saying that an extract of a specific cultivar of the Cannabis plant was effective in treatment of Dravet Syndrome, a rare, severe form of intractable epilepsy. It is reported that children affected by this syndrome, suffering hundreds of seizures per month and responding to no other medication, become seizure free after taking the extract. I don't know if the media report is true, or if this is something which occurred in a number of cases or is an isolated event that might be explained by some other change in the child or the child's situation.

However, it suggests that perhaps something other than a standard randomized case, controlled, double blinded study would be appropriate for approval of the use of such an extract. A radical reduction of symptoms in a case for which there was no alternative effective treatment, especially for a totally debilitating or fatal disease, would seem to call for trials in other children, and as long as the treatment proved uniformly beneficial, why would one give a placebo to other afflicted children. I am assuming that in the case of Dravet Syndrome, the diagnosis is confirmed by detecting the genetic defect that causes the seizures, and that there is sufficient historical evidence from untreated clinical cases that the seizures continue.

Scientific Publications Change Credibility of Hypotheses

There is an article in the science section of the New York Times on the reproducibility of results published in scientific journals. I think that it is based on a misperception of the role of scientific publications.

Let me start with an example. Times of sunrise, sunset, high tide and low tide are very accurately measured and predicted. If a scientific journal were to publish an article on the measurement of such events, those results could be reproduced widely and easily. The science is well established, its credibility assured. Thus no scientific journal would now publish such results (unless of course, the rotation of the earth suddenly changed in an unexpected way).

So suppose a scientist comes up with a hypothesis that the sun rises not in the east, but in the west in a specific place on earth. That is a very surprising hypothesis, one that seems very likely, a priori, to be wrong. He goes there and measures the location of the sunrise for a year, and indeed his data show it to have risen in a westerly direction. He submits an article to a good journal; it establishes he is a credible person, and peer reviewers can find no fault in his methods, so his paper is published. Of course, his hypothesis is still judged to be wildly improbable, but others would seek to replicate his observations. If they did, an important lead would then be available for new discoveries for earth scientists. If, as would be likely, it was found that there was an abnormality in the magnetic field or that his instruments were flawed in a way he had failed to detect, and that the sun indeed rose in the east, that would be the end of it. The results would not be reproduced and confidence would be restored in the prior theory.

Scientific journals seek to publish interesting results, those which show evidence for something that was thought a priori to be unlikely. The most interesting experimental results are just those which most challenge the probabilities as estimated before the experiments. It seems reasonable that these anomalous results will not stand up; that published scientific research will be difficult to reproduce. something is unlikely to be true, as any scientist will tell you, an experiment that indicates it is true is likely to be faulty.

This would seem to be especially true as scientists explore things very far from common experience, where the experiments themselves become very difficult. Think of particle experiments at very high energies, superconductivity experiments at very low temperatures, astronomical observations at very long distances, etc.

An experiment that appears to challenge a well established idea, doing so by achieving very unusual and difficult to achieve experimental conditions, may be very suggestive of new ways to understand the world. Such an experiment would also seem likely to be an artifact

•  a set of observations that would occur only very improbably, but which by the laws of random chance occurred in a specific experiment
• a methodological error, difficult to detect, that fell upon a reputable researcher. 

That is why replication is important, and indeed why scientific integrity is important. Often the supporting or challenging evidence will be obtained by alternative experiments, done with different equipment, and done in other laboratories.

So irreproducible results are not indicative of something being wrong with science or scientific publication, but are a natural result of the use of scientific journals to direct attention at potentially important findings as the frontiers of science advance into more and more difficult experimental domains.

This incidentally is why the public should not rush off to demand doctors prescribe a new drug based on reading a newspaper report that it had very unexpectedly cured a condition in an experiment on rats. A single unlikely result leaves the theory still unlikely. Consumers should wait until the FDA, based on the advice of expert, experienced scientists judge that the evidence is then sufficiently credible of safety, efficacy and effectiveness to allow doctors to prescribe the medication.

The High Cost of Failure to Immunize Children

Source: Mother Jones

I had a case of the mumps as an adult, and was quite sick. I ran a high fever for days, had a complication, and was hospitalized. I know it was once regarded as a "childhood disease", as was measles, but these can cause serious illness. They are preventable, but there are those who spread false stories about dangers of immunization, and where those stories are believed, epidemics occur as the map shows.

Check out this very good interactive graphic on the epidemics of some of the common diseases that can be prevented by immunization.

Poverty is concentrated near the equator.

World Bank Regional Forecasts for 2014

Read the Bank's blog post supporting the figure.

New from the UN Economic Policy and Analysis Division

Go to the report website.

"Nothing in the world is more dangerous than sincere ignorance and conscientious stupidity." -- Martin Luther King, Jr.

Khaled & Fella - Les ailes

Do Economic Fundamentals Assure that the Economies Will Become More Unequal?

There was an interesting article in The Economist a couple of weeks ago, reflecting new economic research on the distribution of income.

It suggests that when the saving rate is higher for a country than the economic growth rate, then the ration of national capital to GDP increases. As the graph on the left indicates, this has been happening in the USA, France, Germany and Britain more or less continuously since 1940.

The graph on the right indicates that the rate of return on capital has been relatively constant for centuries.

The implication should be obvious. If the ratio of capital to GDP is increasing, and if the rate of return to capital is constant, than more of the GDP will to return on capital; less will be available for return to labor.

In Mr Piketty’s narrative, rapid growth—from large productivity gains or a growing population—is a force for economic convergence. Prior wealth casts less of an economic and political shadow over the new income generated each year. And population growth is a critical component of economic growth, accounting for about half of average global GDP growth between 1700 and 2012. America’s breakneck population and GDP growth in the 19th century eroded the power of old fortunes while throwing up a steady supply of new ones.

The article concludes:

New technology can also make it easier to substitute machines for human workers. That allows capital to gobble up a larger share of national income, raising its return. Amid a new burst of automation, wealth concentrations and inequality could reach unprecedented heights, putting a modern twist on a very 19th- century problem.

Perhaps rapid growth of capital and slow growth of population leads to conditions that favor investment in the production of labor saving, capital intensive technology.

On the other hand, evolving technological systems have their own directions for technological development. The industrial revolution was based on engines (largely using fossil fuels) driving machinery, and these may have encouraged capital-intensive, labor saving technology development. The Information Revolution -- especially in the smart phone, Internet era -- may be promoting a different kind of technological innovation and thus a different economic trajectory. 

You Probably Owe More Than You Know to Other Parts of the World

 I am not sure that all of these are correct. For example, I thought apples were from central Asia rather than the Middle East. But the point is true that our food crops and lifestock were domesticated in many regions, and much of the progress of the world has come from the diffusion of high yield crops to new areas where they supported population and economic growth.

I believe that there are other crops that could be made to yield more and could bring increased productivity to new regions, but have been left behind.

Thanks to Calestous Juma for posting this.

Cultural Institutions Divide Us -- Five Maps

I just found the Washington Post's "40 maps that explain the world: Part two: 40 more maps that explain the world". Here are five of the maps that describe some of the big cultural divides:

The world's major writing systems

The world's most and least ethnically diverse countries

Economic inequality around the world

Legal systems of the world

How the U.S. compares to the world on economic inequality

Source

If we keep on our current economic path, we will soon be comparable to South Africa and Latin America -- regions where history saw tiny colonial elites lord it over the vast majority of the people.

Of course, we could reverse that course and try to join the advanced developed countries of Europe, Asia and Oceana and reduce income inequality and increase socio-economic mobility. That is the way America used to be, and the way Americans generally see themselves.

Good News on Education, But We Have More to Do

Source: Pew Research Center

College entrance among high school graduates has increased in all income groups in the USA since 1975. Still, the higher income groups seem to attend college in much higher percentage.

The New York Times in 2012 reported that 90 percent of America's 25- to 29-year-olds had completed high school, and one-third had completed at least a bachelors degree.

However, data from 2009 suggest that poor areas in the United States have lower high school completion rates than do more affluent areas:

Source: Bureau of the Census

Thus perhaps secondary education completion is less available to the blacks in the south and Hispanics in the strip from southern Texas to southern California, and college education is still less available to them.

This counts because education leads to more secure jobs and higher income.

Source: Wikipedia

Why ever would the U.S. distrust European governments?

The Cuban Missile Crisis of 1962 almost resulted in nuclear war. The Soviet Union (with its capital in Europe) had without U.S. knowledge placed nuclear warheads in Cuba, was adding missiles, and began building launch sites. It was only at that point that the U.S. discovered the danger.

In 1941, after the Japanese attacked Pearl Harbor without warning, Germany and Italy declared war on the United States. They did so four days after the attack on Pearl Harbor.

During World War I, without a declaration of war on the United States, Germany authorized unrestricted warfare on shipping in the Atlantic and encouraged Mexico to attack the United States with a promise of assistance if Mexico did so.

If you go back further in history, the United States fought wars with England and Spain. France took over Mexico while the U.S. was preoccupied with the Civil War. As a colony, American settlers fought the French in what we call the French and Indian War (and the rest of the world calls the Seven Year War).

Isn't there a saying that those who don't know history are condemned to repeat it?

Looking at history, how long does it take for two European nations at peace with each other to decide to go to war? Aside from the fact that European nations spy on the USA (think of Britain in trying to get the USA to join it in World War II, or Russia, or even Israel) perhaps it is not surprising that the United States spies on Europe.

I am not sure I approve of the degree to which we do so, but then I am also not sure that the outrage expressed by foreign leaders is real, or if real, justified.

Fewer Sunspots than any time in a century

According to NASA:

The current predicted and observed size makes this the smallest sunspot cycle since Cycle 14 which had a maximum of 64.2 in February of 1906.

You can see how this stacks up against the record for the past 400 years.

According to an article in The Mail:

The Sun's activity is at its lowest for 100 years, scientists have warned.
They say the conditions are eerily similar to those before the Maunder Minimum, a time in 1645 when a mini ice age hit, Freezing London's River Thames.
Researcher believe the solar lull could cause major changes, and say there is a 20% chance it could lead to 'major changes' in temperatures.

The article also states:

Mike Lockwood University of Reading says that the lower temperatures could affect the global jetstream, causing weather systems to collapse.
'We estimate within 40 years there a 10-20% probability we will be back in Maunder Minimum territory,' he said.

MY TAKE ON THIS DATA

Prediction is very difficult, especially if it's about the future.
Niels Bohr

Lets say that these predictions come true, and the sun provides less energy to the earth for a period of decades. Temperatures would then be likely to trend lower. Climate change deniers would claim they had been right all the time, and concern for global warming would be likely to be less intense than it might have been. To counteract cold winters, more energy would be used in heating.

Perhaps these trends would lead to increased rates of greenhouse gas emissions. The level of Carbon Dioxide might increase in the atmosphere faster than would have otherwise occurred. When the sun's cycle returns to the more normal level, the problem of global warming may be exacerbated.

Who knows?

On Tacit Knowledge and the social distance you get living abroad.

There is a good op-ed piece by David Brooks in the New York Times. This is what he says about implicit (or practical) knowledge:

(C)raftsmen possess and transmit practical knowledge. This sort of knowledge, Oakeshott says, exists only in use. It cannot be taught, only imparted by imitation and experience. It’s knowing when to depart from the cookbook; how much, when running a meeting, to let the conversation flow and how much to rein it in. 

Practical knowledge is hard to see, but it is embedded in traditions of behavior. It is embedded in the lives of older legislators and public servants, and it is passed down by imitation to the younger ones. 

And he says this about living abroad:

Go off to some alien part of this country or the world. Immerse yourself in the habits and daily patterns of that existence and stay there long enough to get acculturated. Stay there long enough so that you forget the herd mentality of our partisan culture. 

When you return home, you will look at your own place with foreign eyes. You’ll see the contours of your own reality more clearly. When you return to native ground, you’re more likely to possess the sort of perceptiveness that Isaiah Berlin says is the basis of political judgment.

I believe that one of the functions of a professor is to profess, that is to demonstrate one's faith in his/her profession. For a professor of science or engineering, it would be both to profess the faith in the profession of teaching and the profession of science/engineering. That is because some of the tacit knowledge of the profession is learned by the example from the professor.

It is a long time since I spent several years in Chile, but I had the advantage of a good course from a good professor of anthropology before going. It is also a long time since I later spent several years in Colombia, but I had the advantage of working with a great group of Colombian professionals who taught me a lot. But I remember how I had come to see things at home differently when I returned.

Roger Stein: A bold new way to fund drug research

This is an interesting idea. My question is, why doesn't big pharma do this already?

Pope Francis on Decision Making

I am always wary of decisions made hastily. I am always wary of the first decision, that is, the first thing that comes to my mind if I have to make a decision. This is usually the wrong thing. I have to wait and assess, looking deep into myself, taking the necessary time.Pope Francis I

Poverty is most prevalent among children -- they don't vote.

A half century after the Johnson administration created the War on Poverty, there is a report card from the Pew Research Center. By the best available indicator, the poverty rate "fell from about 26% in 1967 to 16% in 2012."

In 1966......four-in-ten (41.8%) of African-Americans were poor.......By 2012, poverty among African-Americans had fallen to 27.2% — still more than double the rate among whites (12.7%, 1.4 percentage points higher than in 1966).

For Hispanics, in 1972

22.8% lived below the poverty threshold. In 2012, the share of Hispanics in poverty had risen to 25.6%. But the U.S. Hispanic population has quintupled over that time.

At most, America’s poor receive $212 billion a year (in welfare). And almost half of this is available only to people who are working -- the refundable part of the Earned Income Tax Credit ($55 billion), the Child Tax Credit, and Supplemental Security Income ($43.7 billion). The only direct help available to the non-working poor and their families are food stamps ($75 billion), housing vouchers ($18 billion), and Temporary Assistance for Needy Families ($21 billion), for a total of $114 billion. Even $212 billion is the smallest direct payment to the poor, as a proportion of our total economy, than before the War on Poverty began. And Republicans on the Hill are trying to slash even these. Yet we still have a huge poor population in America, including 22 percent of our nation’s children, as well as a large and growing share of the middle class at risk of falling into poverty. It’s time to counter the baloney spewing forth from right-wing think tanks, and make the case for shared prosperity.
Robert Reich

Two Maps -- Heritage of Ethnic Poverty Frozen in Geography

American ancestry by county

Source: "40 more maps that explain the world," The Washington Post

This map, which shows the dominant ancestry in each U.S. county, is a wonderful show of American diversity and a living museum of America's history of immigration, voluntary as well as forced. 

 Percentage of individuals living in poverty, by county, 2000

Source: "The Topography of Poverty in the United States: A Spatial Analysis Using County-Level Data From the Community Health Status Indicators Project"

Compare the two maps. Note how often the counties with majority African American, majority Mexican ancestry, and majority Native American populations are also counties with relatively high percentages of people living in poverty.

What do you suppose the socio-economic mobility is for a young person of one of these ancestries, coming from a very poor family in a county with lots of poor people? Do they have equal educational services? We know that education has been a key to individual mobility in America. Do they have role models living locally who have succeeded economically?

Things you must know about the world in three maps.

There is a great new site from The Washington Post with 40 maps, some of which are animated. Here are a couple that I found especially relevant:

Where the world's people live, by economic status

Those dots represent people: the brighter the dot, the more people. The color shows their country's average income level: blue is richest and yellow is poorest.

How countries compare on economic inequality

 Yes, the United States has worse income inequality than Nigeria. That's according to a metric called the Palma Ratio that measures economic inequality. Read more here about how the metric works and the fascinating results of using it to compare the world's countries.

 Where the world's 30 million slaves live

 This is not some soft, liberal, by-modern-standards definition of slavery. This is slavery. There are 30 million people living today as forced laborers, forced prostitutes, child soldiers, child brides in forced marriages or other forms of property. There are 60,000 right here in the United States – yes, really. This map shows the proportion of each country that is enslaved.

Embracing Uncertainty II

“I can live with doubt and uncertainty and not knowing. I think it is much more interesting to live not knowing than to have answers that might be wrong. If we will only allow that, as we progress, we remain unsure, we will leave opportunities for alternatives. We will not become enthusiastic for the fact, the knowledge, the absolute truth of the day, but remain always uncertain … In order to make progress, one must leave the door to the unknown ajar.” 
― Richard P. Feynman

In my previous post I recommended embracing uncertainty. I meant that in terms of big, important things. In trivial things, of course you should ignore uncertainty, acting as if it didn't exist. Would you prefer to wear this or that today? Ignore your uncertainty and choose. Would you prefer pancakes or waffles for breakfast? Ignore your uncertainty and choose.

How should you deal with uncertainty?

• Recognize alternative theories of the nature of the situation, but also recognize that you may not have recognized all the relevant alternatives. Consider searching for other alternatives.
• Recognize alternative courses of action, but also recognize that you may not have recognized all the relevant alternatives. Consider searching for other alternatives.
• Consider the dangers involved in those alternatives actions and their probabilities. Recognize that you may have failed to identify dangers. Recognize that your estimates of probabilities may be faulty. Consider more detailed risk assessment.
• Consider the potential benefits in those courses of action. Recognize that you may have failed to identify potential benefits. Recognize that your estimates of the probabilities may be faulty.
• Consider making your analysis of the situation more profound. Recognize that there are costs in time and effort in continuing analysis.

At some point you will decide that the state of your analysis justifies the decision to act or not to act, and you will do so. You will also decide to continue analysis or to discontinue analysis and go on to think about something else.

Embrace Uncertainty

There is a nice article in Scientific American titled "The Case against Copernicus".  Fundamentally, it suggests that when Copernicus published his theory that the earth and planets all revolved around the sun early in the 17th Century -- and for many years after that -- astronomers were skeptical.

In ancient days, nights were dark and people looked at the night sky. They saw the stars move across that night sky. They saw the planets, and were bemused by the fact that they alone (other than the moon) moved with respect to the stars. For a very long time, people sought to explain the behavior of the planets.

The video shows three models:

• The Geocentric model, in which the earth is the center of the system, and there are complex processes leading to the path of the planets against the celestial sphere;
• The Geoheliocentric model, in which the earth is the center, but the sun is in orbit around the earth, and the other planets are in orbit around the sun; and
• The Heliocentric model, in which the earth and the other planets revolve around the sun.

People had a very good idea of the size of the earth, and the idea that it was making a revolution every day was hard to accept. Scientists thought that, were that true, they should be able to detect the motion in the flight of shot from a canon. If the shot were at a right angle to the direction of rotation, would the shot not appear to deviate from the point at which it was aimed? The did not realize that they did not have sufficiently accurate instruments to detect the effect.

People also knew that it was hard to move big, heavy things, and the earth was very big and very heavy. They found it very hard to believe that the earth could be moving around the sun. Of course they had no theory of gravity to explain the force which at such a distance could move the earth. They believed that celestial objects were of a different sort of matter, much lighter, and as a result could move easily in orbit.

Lest that seem  silly, note that astronomers now postulate that there is dark matter and dark energy that we can not see, but that is needed in their models to explain the motion of the stars and galaxies.

The point of the article is that the astronomers of the 17th century had good reason to be skeptical about the Galileo and Copernicus. I would say that their first concern was having the means to accurately predict the paths of the planets in the night sky. A model would not be useful unless it proved better at those predictions than other models.

Galileo was condemned by the Catholic Church, basically on the charge of heresy in that he did not accept the Church's belief in the geocentric model. As a scientist, I think he did not believe in any model, nor should he have believed in any model.  A scientist may believe a model is very probably true, and an alternative is very improbable, but skepticism about ultimate truth of theory is the hallmark of science.

Einstein's theory has proven to make predictions in some circumstances that are more accurate than Newton's theory. Still, scientists recognize that they don't have a means of understanding both Relativity Theory and Quantum Theory and are keeping their minds open. They look for experiments that might supply new observations to falsify one of the other theory, leading to the construction of still better theories.

Perhaps that acceptance of uncertainty should be much more widely used. Would our 21st century foreign policy have been better had U.S. government leaders been more willing to acknowledge the uncertainty in their understanding of Iraq and Afghanistan? Would the Congress work better now if Republicans and Democrats be more willing to acknowledge the uncertainty in their understanding of the economy and national development? I suspect so!

Neil DeGrasse Tyson -- a role model for our young people

Job Losses -- Why this is called "The Great Recession"

Source

The best of us have cognitive biases and half of us are below average!

Psychologists have identified a large number of cognitive biases that lead people to make less than optimal decisions. If you know what those biases are, and recognize that you too are subject to them, you at least have a chance to protect your decision making against them.

Here are some sources of information on cognitive biases:

• "The 12 cognitive biases that prevent you from being rational"
• Wikipedia entry: "Illusory superiority"
• Wikipedia entry: "List of cognitive biases"

U.S. falling farther behind OECD peers in health

A bubble with a number less than one means Americans are losing fewer years of life, although you don't see many of those, because, in every category measured in 2008, the United States did worse than than average.

 Potential Years of Life Lost (YPLL) to Different Diseases

United States Compared to OECD Median

Source: Washington Post Wonkblog

Israeli Views on Peace -- Infographic from J Street.

Overall Water Risk Map

This nice map comes from a set of maps published on the Internet by The New Africa.

Look at the red areas. China, India, Pakistan and Israel all have weapons of mass destruction, and Iran seems to want them.