Sunday, November 15, 2015

Without the World Wars, Would the U.S. Have Played the Role of a Bigger Canada?

A good way to eclipse your economic competition is for their industrial centers to be flattened by wars twice, within a few decades, and for your own country to be on another continent entirely that is not directly involved in the war (excepting one attack). I've always been curious about the extent to which WWII could explain the eclipse of the UK's role as world police and bankers by the US. As I've traveled around the Commonwealth I can't help but imagine an alternative U.S.: a kinder, gentler, less exceptional Anglosphere nation that retained more of the isolationist flair of pre-WWII politics. If the Archduke had survived that summer day in 1914, and Europe had moved rationally and peacefully into an E.U. with Habsburgs...would not the U.K. have retained its economic, cultural and military dominance?

So I checked the numbers. Perhaps London would have remained the undisputed capital of the world for longer, but it's hard to ignore the already-evident economic trend that pre-dated the wars. In terms of the size of its economy (absolute GDP), the U.S. had already outgrown Britain by 1870. In terms of per capita income, the U.S. was neck and neck with the U.K. from shortly after the turn of the last cenutry until WWII, when it pulled away. The wars no doubt accelerated this process, in particular after WWII when there was an obvious incentive to move toward the American sphere and away from the Soviet, allowing international law and finance to move in discrete steps toward the U.S. But the underlying economic process was already underway. Now that China is eclipsing the U.S. as the absolute largest economy, we should expect that this process will repeat itself, particularly if the country escapes the middle income trap and the PCI of the interior rises as well.

Monday, July 27, 2015

The Oregon Brewers Festival as an Example of Status Hierarchy Gaming

Two friends recently attended the Oregon Brewers Festival, a favorite of beer lovers, and one of them complained along the following lines: "I'd really just like to try some good IPAs, and this is all weird experimental sh*t." I had noticed the same effect in the San Diego brew scene in the last few years. People can have their wasabi beer and horchata beer and though it's all fun in conception, a lot of it doesn't work in execution; but sometimes it does, and you get an innovation. At the same time, one wonders what drives "innovation" to the point where brewfest attendees are complaining that the brewers, rather than try to make the best (stout, lager, IPA, etc) that they can - they make psilocybin-kim chee beer with yeast exposed to Fukushima radiation (or something). Here I argue that this is in fact a symptom of a broader trend in modern culture and the U.S. in particular.

Note: I came up with kim chee beer off the top of my head, and then realized that if I thought of it that easily, it almost certainly already existed. So then I looked it up. Bingo.

It's hard to make even a marginal improvement on an established type of product, beer or otherwise, and that's true not just for beer but for all commodities, commercial, art, whatever. Why is this happening? 3 possibilities.

1) Brewers do this for rational commercial reasons. That is to say: everyone makes an IPA. No one else makes Fukushima kim chee beer, and people who buy it will remember that. In addition to the branding benefit, right away these brewers have a monopoly on this beer and therefore could seek rents, bestowed (at least temporarily) by a unique product rather than some other type of product protection. However people would have to make a regular habit of the Fukushima kim chee beer, and most of these aren't sustainable, so this mostly reduces to the kim chee beer as a loss-leader getting you to buy their IPA.

2) It's high status for brewers to be seen as making something novel, even if that novelty isn't a beer that people would drink more than once. Similarly I once got garlic ice cream and jalapeno ice cream. I never got it again, but I remember the place where I got both of these, and would go there again for ice cream.

3) Most interesting in terms of cultural criticism - people are (again) seeking high status by gaming the status hierarchy - that is, not by misrepresenting themselves, but by creating a whole NEW status hierarchy, or at least a sub-hierarchy. Consumers do this all the time, defining themselves in multiple overlapping status hierarchies usually based on what they consume (and how that defines their identities, because it's easy) vs what they produce.

The concern for #3 is that if brewers are so desperate to escape being not-#1 that they produce weird beer that no one drinks rather than make a just-as-good IPA (or not even quite as good as their neighbor, but still solid), then one wonders where else in the economy that quality of life and value-production is suffering due to the same effect.

I don't include "boredom" on the list above, because that would imply that these brewers have already mastered a standard type of beer, and I doubt that's the case.

Saturday, June 27, 2015

New World, Non-Malthusian Population More Determined by Historical Accident Than Climate

Above: the Frontier Strip - the westernmost U.S. states before the Rockies - contain the 100th meridian (bold vertical line in maps) which is often used a marker of low precipitation and therefore low agricultural productivity. The argument has been that the population therefore drops off to the west of this; but if that's the case, then why does Canada not follow the same pattern?

It is commonly believed that the population drop-off seen in the United States at the 100th parallel has to do with changes in rainfall and agricultural productivity as one moves west in North America. This article shows that this is probably not the case. It more likely has to do with historical accident - about the time Americans had expanded west to the 100th meridian, we started building trains, and people could move to the more pleasant climates of the West Coast. Note that the "population distribution is by historical accident" theory applies more to the New World than the Old, because of the introduction of intensive agriculture and lack of a Malthusian limit. Maybe over time, there will be a smoother population gradient - it would be easier to argue that with thousands of years of agriculture, longer-term Malthusian limited populations in Asia and Africa populations do reflect agricultural productivity, and therefore also rainfall and longitude-degrees from ocean.

Presumably the same applies to latitude, although for different reasons. Very high latitudes are not great places to grow food. Latitude is still going to be affected by geography (if you're near coastline at 25 degrees latitude, life is much more pleasant than if you're inland) - but the solar radiation remains constant so the effect of latitude is a little less subject to being obscured by the details of geography than longitude would be. (Note that there may be constraints on population growth other than calories that I'm completely neglecting; e.g., maybe agriculture at the equator is better than 30 degrees, but disease slows population growth once you drop below the 30s.)

Geography junkies have likely already seen maps like the one above showing population by latitude, and the assumption is that agriculture just produces more calories at certain latitudes (similar to the provincial precipitation distribution that obtains in North America and which was assumed to influence our own population distribution). But if we're trying to pull out first principles, absolute population doesn't help much - what if there's just a lot of land at certain latitudes? That doesn't tell us whether that latitude is good for agriculture and therefore modern humans, it tells us where the land is on Earth's surface. If your denominator for population density includes ocean, then it doesn't really tell us anything about the carrying capacity of land at that latitude. So population alone won't work - it needs to be population density.

And even just population density per latitude won't work - it has to be population density per actual land area found at that latitude. I couldn't find population density per land area data. Fortunately this Brookings Institute Paper quotes World Bank 1997 figures for land area and population in bands of 10 degrees latitude (see pp 49-51), and I back-calculated population density per actual land area at this level of granularity.

Thinking it might be interesting to see how things stack up when the northern and southern latitude bands are combined, I did so:

(There wasn't full data below 40s south or above 50s north, which means we can't even do 50s when we combine them, which non-ideally eliminates most of Europe.) The question that emerges is, what's wrong with you people in the 30s and 40s south? Up here on the correct side of the world we certainly seem to be able to get along alright in those latitudes. The lion's share of the land in the 30s and 40s south is to be found in the southern half of Australia, most of Argentina and Chile, and South Africa. These aren't bad places to live - note that this contains 3 of the world's 5 Mediterranean climate zones! Again, even trying to smooth things out, historical details matter. These are places where intensive agriculture was only introduced in the last few centuries by Europeans. And geographical details matter, even after using population density instead of population - Australia is an ancient craton with terrible soil, and Argentina is drier than it might otherwise be due to the rainshadow of the Andes. That said, in the Malthusian future, we should expect to see the Pampas filling up much like another Mediterranean climate zone (California) is filling up as we speak.

Finally, it's worth glancing at Malthusian long-term intensive agriculture countries, to see whether this holds up. I've put population density, precipitation and elevation next to each other. China's marked parallels are 40-30-20. India's are just 30-20. (10 crosses near the southern tip of the subcontinent.)

The precipitation relationship holds up better for India than for China, but both of them follow elevation. This may be more true in rice-farming areas than other grains. The relationship of population to elevation has been profitably studied elsewhere; there's a notable outgroup in the central Mexican plateau, where grains that enjoy dry conditions are grown and near to where agriculture began in North America.

Fully stated then, the theory can then be summarized as "Population distribution is strongly influenced by agriculture which in turn is determined by climate and therefore latitude, but a) until Malthusian limits are reached millennia after the introduction of intensive agriculture, distribution will be mostly by historical accident as in the New World and b) precipitation and especially elevation dramatically affect the distribution as well."

Tuesday, June 23, 2015

Books I Read in 2013-2014

At first I thought the exercise of posting book lists was middlebrow vanity but it actually does help to organize your thinking and retain what you've read (the best is to write a review on each). I should note that a number of these were abandoned ("liberated") partway through (mostly fiction). For some reason people hesitate to notice and act on the sunk cost fallacy when reading, but it's a virtue to walk out of a bad movie, even when you've paid!

Also Spracht Zarathustra - Nietzsche
Herodotus - the Histories
Kama Sutra
Just So Stories - Kipling

Moonwalking with Einstein - Foer
Willpower - Baumeister and Tierney
Predictably Irrational - Ariely
Rational Choice in an Uncertain World - Hastie
Thinking and Deciding - Baron

Neural Darwinism - Edelman
Man's Search for Meaning - Frankl
Mind Over Mood - Greenberger/Padesky
Handbook of Cognitive Behavioral Therapies - Dobson
First Aid for the USMLE Step 2 CK
Crush Step 2
Cases for the USMLE Step 2 CK
Q&A for the USMLE Step 2 CK
Step Up to Medicine

Olympos - Dan Simmons (This one I can review: I hated it. I hated it from page one and kept hating it so much.)
Zulu Heart - Stephen Barnes
A Heavy Metal Memoir - Dave Mustaine

Memorable Short Story Writers (most of whose stuff I sought out online after reading one story)
Yoon Ha Lee
Ted Chiang
Ken Liu

Alternate Histories: Russian Hawai'i, Swedish Delaware

Actually, it sounds like alternate history but it's not:

"In 1815-17, Kaumuali'i led secret negotiations with representatives of the Russian-American Company in an attempt to gain Russia's military support against Kamehameha; however, the negotiations folded and the Russians were forced to abandon all of their presence in Kaua'i, including Fort Elizabeth, after it was revealed that they did not have the support of Tsar Alexander I."

More here - perhaps, even stranger to my American eyes and ears than the 17th century Swedish colony in Delaware. I would think some fascinating alternative history could be written about either of these, but like all fiction, alternative history is about us, here and now, and here and now we don't think much about the Russian and Swedish forays into Hawaii and Atlantic North America (although there's online discussion of Russian Hawai'i of course, here's an online crack at a surviving New Sweden...)

I only just discovered the Points of Divergence alternate history site, which I will surely be wandering around in the coming days.

Monday, June 22, 2015

Hobbes Understood Why It May Be Rational in Unstable States to Heavily Discount the Future

"In [the war of all against all], there is no place for industry; because the fruit thereof is uncertain."
- Thomas Hobbes, Leviathan, Chapter XIII, "Of the Natural Condition of Mankind as Concerning Their Felicity and Misery"

More on the rationality of future discount rates in Japan and Somalia here.

Friday, March 27, 2015

Is It Better For a Capital NOT to be the Largest City?

After an enjoyable blog post about New Zealand at Crooked Timbers, a commenter pointed out how unusual it is for a country's capital not to be the biggest city. (Wellington is New Zealand's third largest.)

I previously investigated another assumption, namely whether it is better for a capital to be located centrally in its district. Using capitals of U.S. states and those states' per capita income as a snapshot indicator of "better", this doesn't matter.

So does it matter if there's life outside the capital in your country? It's easy to make just-so arguments in both directions. Having a smaller capital that is (presumably) separate from the financial life of the country keeps legislators and businesspeople separate, preventing corruption (right?) as well as providing multiple paths to success. But at the same time, it would seem obvious that this creates inefficiencies in allocating human capital (how many petrodollars and attention-minutes have been wasted in airports and train stations between New York and Washington?) So what do the data say?

Only about 18% of world capitals are not also the largest city (I'll call these "smaller-capital" countries). The New World-Old World distribution is not that different (higher in the New World, 24% are smaller-capital). In fact the smaller-capital countries really seem to be the Anglosphere - about half of them (more than random chance since the Commonwealth makes up about a quarter of the world's countries). The other half of the smaller-capital countries are ones that have had revolutions or otherwise gotten their act together enough to deliberately relocate the capital (e.g. Vietnam, Brazil).

And (drumroll), smaller-capital countries do have a median per capita income advantage of about US$800, or almost 10% more than large capital countries. But, we may lose resolution here because the data are broken into categories. That is to say, if we're looking for some effect of capital dominance, we should expect it to be weaker if the population of the capital only barely edges out another city, vs if the capital is obviously the only significant city in the country. Consequently, it might be more informative if we look at the relationship between % of country's population living in the capital, and the per capita income of that country. So I did, and there wasn't one.

So again I turn back to the my homeland, and use data for U.S. states, which are much more homogenous and don't suffer from having been colonized by different countries and have different mixtures of aboriginal vs colonist, recent wars, etc. The majority of U.S. states (33 out of 50) are smaller-capital states. (Why the capitals have not become the largest city is an interesting question for another post.) There didn't seem to be a clear weighting of one area of the country or the other - the big capital states are pretty much scattered around the country. And again, the smaller-capital states had an advantage in median per capita income, $26,929 vs $25,182, a 7% gain relative to large-capital. So again I looked for a relationship between % population in capital, and PCI. Again there was effectively none (very poorly fitting, very slight decrease with increasing % population in the capital). Out of curiosity I looked at effect of % population in the largest city; again, no dice (very poorly fitting, very slight increase with increasing population in the largest city).

So yes, there's a repeated categorical relationship (smaller-capital, lower PCI) that evaporates when looking at it more closely. It probably doesn't matter whether the capital of your state or country is also the largest city. Whether this means political life integrates itself effectively into the economy of a country regardless of human geography, or that government doesn't matter all that much, is difficult to say.

Data notes: I used Wiki tables, and CIA income information. I did not include overseas dependencies (sorry Greenland and Puerto Rico). For countries that divide their branches of government between cities, I added up the branches as one city; the only place this made a difference in whether they counted as smaller-capital was South Africa.