Economics & Marginalia: July 30, 2021

Hi all,

That was a well-timed week off: we arrived in Cornwall in glorious sunshine and left just as the rain clouds (and summer holiday visitors) began to gather. In between, there was an inhuman quantity of fish and chips and pasties, scallops barbecued on the shell, “swimming” expeditions that involved stopping every two strokes to check for the ever-present jellyfish and the first dunking of our eleven-month old in the water. He howled. Next time will be in warmer waters. In a pandemic year-and-a-half, it’s difficult to remember to take real time off – I found myself delaying doing so ‘until things have calmed down’, but they may not for a very long time indeed, given how unequal and unfortunate the global response to Covid has been. If you’ve been doing the same, and have some time off available, I strongly advise a break – I hadn’t even realised how worn out I was until I stopped moving for a minute. The links will be off again for the next two weeks, as I take time off to settle the baby in nursery and enjoy time with him before he’s spending his days with his peers, but I’ll be back in mid-August.

1. Perhaps it’s the week off making me more upbeat than usual, but one of my favourite reads of the week was the transcript of Charles Kenny’s slack chat with 5 American children about the state of the world, their take on the great issues of the day and when they wish they were born. Perhaps I shouldn’t be, but I was surprised by how firmly and quickly they decided that now is the best time to have been born from a human welfare perspective (they’re right, but many of my decidedly more middle-aged friends think the world was better in the past… and continue to argue the case when I point out that they’re texting me on an iPhone, sending gifs to punctuate their arguments, and have more computing power in the palm of their hands than most universities had in total 50 years ago). They were surprisingly conservative about lowering the voting age, though. Reading this made me more optimistic about the world, fitting for the author of Getting Better and Your World, Better.

2. Three great Bengali economists have been busy with their memoirs recently; all are worth reading. Pranab Bardhan has been publishing his in blog form, (part 1 here, and part 2 here) and it’s full of delightful anecdotes – including the story of an infant Amartya Sen demanding of Rabindranath Tagore, “why is this fellow talking?!” – but mainly, reading it, you realise why he has such an abiding interest in inequality. Kaushik Basu has also written his as an e-book, and from the excerpts so far, it’s full of his typical wry humour. And Amartya Sen’s is on my bookshelf, but has had great reviews from friends.

3. It’s not often that my two most time-consuming (and annoying to my wife) activities, economics and birdwatching, collide so this Planet Money episode feels made for me. It opens with the Dunlin’s call and goes onto tricky problem of incentivising farmers to provide a viable habitat for migratory birds. Since buying large swathes of the American would be ruinously expensive, Eric Hallstein came up with an alternative approach: reverse auctions, at which farmers announce a price for flooding their fields for the migration season. Contract and mechanism design, birding and migration – it’s a proper Ranil hat-trick (transcript).

4. My colleague Euan Ritchie lays into the Treasury for its handling of the ODA budget: not because of the cuts per se, but its approach to counting things under the ODA budget that have minimal fiscal implications for the UK, thus forcing even-deeper cuts to aid, and making a mockery of their own claim that the level of spending associated with 0.5 was the fiscally sober level. Mark Miller and Lionel Roger wade in, too, pointing out that the UK’s approach to counting SDRs amounts to nothing more than fiscal gimmickry.

5. Thiemo Fetzer has also been hammering absurd Government policy with clever research, first hammering the UK’s Eat Out to Help Out scheme and now -with co-authors – arguing that the announced withdrawal of NATO troops from Afghanistan by the end of 2021 is likely to induce a strategic response by the Taliban based on previous patterns of engagement. Public policy is hard, of course, but we make it harder by refusing to learn the lessons of failures past.

6. Branko was on typically blistering form while I was away – savaging Norway for its cleaner-than-clean domestic policy of reducing its carbon footprint while simultaneously extracting and exporting fossil fuels elsewhere, comparing it to the East India Company’s approach to opium; then criticising a number of books on economic development for rank Eurocentricism; he describes Why Nations Fail’s treatment of Asian countries a collection of cliches (and really, he’s not wrong). I wonder what he would make of Chris Bayly’s Birth of the Modern World – a book explicitly about global connections (the review I link to there is also worth reading).

7. Lastly, it’s Olympics time, but with rather less pomp and circumstance than most Olympics I can remember. Certainly, there’s been little to match matchless brilliance of Vasyl Lomachenko, or indeed Usain Bolt. The closest we’ve come has been Luka Doncic continuing to stake his claim as the best basketball player in the world, and perhaps the breath-taking chutzpah of half of twitter in criticising Simone Biles. If you’re tempted, McSweeney’s has a handy guide for assessing your eligibility to question her.

Have a great weekend, everyone! See you in a few weeks!

R