What happens when individuals can coordinate their actions and efforts to promote interests that aren’t merely personal?  What goals can be achieved and goods can come from the collective efforts of smart and successful people who work to improve the state of a community outside of conventional markets and government?  Anton Howe’s new book Arts and Minds: How the Royal Society of Arts Changed a Nation opens with a one line dedication “to the public-spirited,” and what he then proceeds to show his readers is that public spirited people can overcome collective action problems and accomplish very remarkable things when they rely on self-interest, ambition, and our desire for social standing.  His conclusions about human nature, the structuring of institutional incentives and the sweeping scope of the Royal Society’s history over the past 300 years is well worth reading for individuals in history, public policy, and economics. The philanthropic sector has long been a subject of scholarly interest, and this book fits in that category — sort of.  Howe’s subject is what he calls “the Society.” Founded by the visionary William Shipley in 1754, the Society originally attracted successful, intellectually curious individuals from the upper and middle classes.  Its membership was open to anyone who could pay the dues, and the goal was to promote research and investigation into a wide range of tangible areas including agriculture, manufacturing, mechanical matters, trade, and the “polite” arts (the founders were no fans of luxury).  This was done primarily through the creation of “premiums” in which investigators, inventors, artists, and others were awarded prizes for their work in various subject areas specified by the Society.  Throughout its continued existence, the Society has sponsored work on thousands of new ideas, inventions, and discoveries in various fields, but it specifically focused on fields that were not patentable (and therefore not obviously profitable), yet broadly defined to be in the public good.  What did the public good mean? That changed quite a bit over the years. Who joined this organization?  When Shipley founded the Society, he targeted upwardly mobile professionals, the emerging middle class, along with some upper class members to give the organization prestige.  The idea was to provide the members with some tangible and intangible benefits.  Tangible benefits included participation in the events, talks, and presentations addressing new scientific, artistic and technological advances in various academic and practical fields.  The members could also network with like minded professionals and even meet new clients if they were artisans or producers of other wares. But Shipley also wanted the organization to be prestigious and to allow the newly ascendant professional classes access to philanthropic, public spirited endeavors that had previously been the purview of the upper classes and royalty.  He was providing a chance for the newly minted wealth of the country to serve the public good, and to do so publicly, signaling their patriotism and status.  For example, members paid dues to participate in the meetings, but also to signal to their families, friends, neighbors, and fellow professionals that they were public spirited and hard working.  The society allowed members to reap both material and social benefits from their membership fees which in turn paid for the research and premiums awarded. It drew partially on vanity and enlightened self-interest to create something more broadly viewed as “good”. What types of projects did the organization support?  As Howe describes it, the Society “rewarded means of preventing accidents on horse-drawn carriages, the reduction of smoke from steam engines, ways to prevent steam locomotive accidents, the reduction of noxious fumes from industrial processes, extendable fire-escape ladders, and safety apparatus for use in mines” (p. 79).  Later, the society supported efforts to prevent forgery of British currency, the development of lithography, and numerous artistic projects to promote a sort of British national painting that included women artists. The Society was also involved in three significant and important political battles that helped to promote the cause of liberty.  First the Society actively helped to promote Richard Cobden’s campaign against the Corn Laws in the late 1830’s.  The Society was filled with members of the new “productive” classes who weren’t wed to the ancient and stale British agricultural system.  This prompted the Society to engage in various activities to promote free trade and the ideas of Adam Smith. The Society also helped to fundamentally change patent laws in England in ways that helped to encourage innovation and artistic expression.  When the Society was first founded, getting a patent was incredibly difficult and expensive.  The Society helped to promote the passage of a streamlined patent law that was widely lauded for promoting innovation and intellectual creativity.  Through its work to promote dialogue during labor unrest in the latter part of the 19th century, the Society also served as a platform for discussion about the prospects for introducing limited liability in corporations in the UK.  A bill allowing for this revolutionary change was passed with the help of influential members of the Society. The Society has been through at least three distinct periods according to Howe.  The first was the actual founding, development, and activities of the society itself. Howe focuses on the work that Shipley did not only in growing the organization through sheer force of will, but also the very unusual institutional framework that he built.  At the outset, the Society was a majoritarian democracy – Shipley himself had no more tangible power than any other member.  Meetings were open to all members, and at those meetings important policies were made about the future of the Society.  Shipley gave the members almost complete responsibility, though ultimately some delegation and committee work developed once the Society became too large to be governed through large meetings that drew hundreds of members into packed spaces. And the membership rolls were filled with many well known historical figures that will surprise readers.  Among the more prominent names you will recognize includes Ben Franklin, Adam Smith, Hogarth, Dickens, as well as a wide variety of slightly lesser known figures in British history.  What’s more the membership was widely open to both men and women throughout the history of the Society.  Women were allowed as members from the outset, which made the Society an outlier for that time.  The group provided a critical outlet for women to participate in civic and professional life when most other avenues were closed off to them. The second part of the story involves the Society’s second major leader, Henry Cole, utilitarian disciple of Jeremy Bentham and force of nature.  He rapidly rose to become the head of the Society and eventually used the organization to help launch Britain’s famous Great Exhibition of 1851.  Howe describes Cole as an ambitious, scheming do-gooder who strove to raise his profile and influence while advancing specific goals in the arts, education, and other aspects of British life.  The idea of what goals were in the public’s best interest began to shift toward things Cole himself and his fellow utilitarians viewed as “good”.  Some of these involved “improving” the public’s taste for art and expanding the power of government in education, things we might now view skeptically.  The third part of the story recounts Howe’s belief that the Society became more interested in its own glory by establishing connections to the famous and powerful throughout the world.  During the middle of the 20th century, he notes that the Society’s  leaders were increasingly drawn from members of the professional bureaucracy that developed in Britain after World War II, giving the Society an even more favorable outlook towards government and those in power. The Society has moved away from premiums paid for successful research promoting the public interest to awarding medals to famous individuals throughout the world, many of whom are politicians.  Whereas before the organization paid for inventors to solve legitimate problems, now it simply awards medals and prizes to people in order to raise the profile of the Society. The book has obvious interests to historians. Those interested in public policy, particularly philanthropy, will be intrigued by the way the Society influenced Britain and affected many other European nations creating spin-offs elsewhere. In addition, this is an organization which for much of its existence skillfully aligned the interests of its members with that of “the public,” along with the work of innovators who would otherwise have had no outlet. It’s a marked departure of the model of grant giving we see so prevalent today. For economists, this book will serve as yet another example of how much institutions change as their rules and practices change.  The early part of the book focused on the large, rowdy meetings in which groups of self-interested people tried to co-opt the Society and create prizes to serve their narrow goals is fascinating reading.  But there’s also a great lesson about how institutions that pursue non-market goals can effectively use self-interest, both intangible and tangible, to unleash a torrent of creativity and innovation over a period of several hundred years.  Howe is clearly conversant in economics and the history of economic thought, and his explanations for things like limited liability and the advantages of free trade are lucid and accessible to a wide audience. It is clear the Society was a powerful force for change that had a positive impact in Britain and elsewhere.  Howe has written a very readable and interesting book on pursuing “the good” that will hopefully attract a wide readership. (0 COMMENTS)

Bill Blain has a piece on CapX on the issue of European debt, which fits into the so called “Next Generation EU” plan to finance recovery after the pandemic. I am glad a piece like this was published, insofar as I think the fact that the EU is issuing debt is itself a significant change from the past and should better be appreciated. It is an interesting piece, and Blain is correct in pointing out that whatever steps we take towards an “ever closer union”, including mutualization of debt, will likely raise the level of conflict between member states: The mutualisation of Europe’s debt is therefore a political objective for the Eurocrats in Bruxelles. But mutualisation and Brussels control will raise the level of dissent. Still, I don’t believe that “Next Generation EU” was much of a political objective for the Eurocrats in Bruxelles. If somebody knows about the difficulties of keeping Europe together, and dreads the very notion of conflicts, it is actually the Commission’s officers. What happened in this case was much more complex: great pressure from Southern European states, the fear of Northern and more frugal states, and particularly Germany, that unless the Southern member States were kept afloat financially, the very survival of the EU was at stake. The common understanding is that exceptional circumstances (like the pandemic) allow for exceptional changes (which everybody would prefer to avoid). And, of course, there seems a dominant ideology in the EU and the US, that sees public spending as the solution to any and all problems. In this sense, the profligate spending by the US administration is setting the tone of the debate elsewhere and shaping what is bound to be, for the next few years, a conviction of establishments everywhere: that is, that massive government intervention does not necessarily need to be anti-cyclical, but could and should shape the recovery by meddling with the allocation of factors of production. “Green” bonds are the new game in town, and Eurocrats do not look any different than policy makers in London or Washington, alas. It would be good to have, at least in some capitals, somebody who has a more long term vision of our current predicament. To the best of my understanding, the only powerful voice who took a stance different from most is Wolfgang Schäuble. I shall confess I am kind of a fan of Schäuble, who has been one of the few consistent voices for sanity in the EU over the years and whose political courage I admire. See this recent article on Project Syndicate. There, Schäuble writes The prospect of recovery makes it all the more urgent to have a firm vision of how the burden of public debt can be reduced once the coronavirus has been vanquished. Otherwise, COVID-19 could be followed by a “debt pandemic,” with dire economic consequences for Europe. Countries like the US and China are already ahead of the demographically aging Europe in terms of productivity and workload. This competitive disadvantage would widen if EU countries were to jeopardize their financial flexibility through excessive debt. And also For this reason, every country must work on itself and strive to maintain budgetary discipline. Financial solidarity is, and will remain, a key condition for sustainable investments in education, research, and innovation, without which our prosperity cannot be safeguarded. But one thing is clear: Left to their own devices, members of a confederation of states like the eurozone are too easily tempted to incur debts at the expense of the community. Balanced budgets are almost unattainable in high-debt countries without external pressure. It seems to me it is not the first time Schäuble is right, and it will not be the first time most of his colleagues refuse to admit it. (0 COMMENTS)

“Old Lives Matter.” I fully agree with the title of Jeremy Horpedahl’s latest reply on the value of life.  To say that the life of an 80-year-old is worth 1% or .1% as much as the life of a 10-year-old is not deny the high value of elderly lives, because 10-year-old lives are immensely valuable. However, I disagree with almost all of Jeremy’s arguments.  To wit: Let’s start with Caplan’s three reasons, which he calls “iron-clad”: young people have more years to live, those years are generally healthier, and young people will be missed more when they are gone. The first in undeniably true on average, the second is probably true almost all the time, and I’m not sure on the third, but I’m willing to admit it’s not a slam dunk either way. So how can I disagree? These are only three things. There are many other considerations, and we can imagine other reasons that old lives are valued as much or more than younger lives! I’ll call mine 4-6 to go with Caplan’s 1-3: Old age spending is the largest component of public budgets in developed countries (and this is unlikely mostly due to rent seeking or the self interest of younger generations). The elderly possess wisdom which is highly valuable and that the young benefit from. The last years of your life are, on average, worth a lot more — you are usually very wealthy, have no employment obligations, you have grandchildren you love (without the responsibilities of parenting), and are (until the very end) generally healthy too. Taken as a whole, I think these three reasons present a strong counterargument to Caplan’s three reasons. And I think we could certainly come up with more! My point being that Caplan has picked three areas where clearly young lives have the advantage, but ignored all the good reasons why old lives are more valuable. I deny that any of these reasons are even in the same ballpark as mine.  Using Jeremy’s numbering: 4. As I explain in The Myth of the Rational Voter and elsewhere, government policy is largely based on what people feel comfortable publicly saying.  Ugly truths are politically impotent, which is the central reason why public policy is so terribly inefficient.  And “The lives of the elderly are worth much less than the young’s” is a quintessential ugly truth. 5. A few elderly people are wise, but they were almost certainly even wiser a couple decades earlier.  By any standard measure, their elderly’s cognitive abilities are in severe decline.  Their non-verbal IQ plummets, and their IQ on timed tests is especially low. More to the point, the elderly score low on psychometric tests of common test, also known as “wisdom.”  Unlike IQ, common test rises into middle age; after that, though, common sense gradually declines to tragically low levels.  Which is why the elderly are so vulnerable to scams, fail to pay their bills, back up their cars without checking their mirrors, and so on. 6. Even if the last years of life had especially high marginal value, I’d still be right that the total value of the last years of your life must be worth much less than the total value of your entire life.  But Jeremy’s arguments that your “golden years” have high marginal value are also weak.  Yes, being a grandparent is great; I’m really looking forward to it.  But it’s consumption, not mere wealth, that people enjoy – and the elderly have low consumption.  People normally like working, if only for the social component.  And the idea that the elderly are “generally health” is absurd.  About half of people 80+ say their health is “fair” or “poor” – and they’re obviously grading on a curve.  A 20-year-old with the health of a “healthy” 80-year-old would be considered severely ill. Jeremy then covers a lot of empirical research on estimates of the value of life by age.  A great literature review, but the main thing it shows is that my view is less aberrant than Jeremy initially suggested.  Many papers do not reach the insane conclusion that the total value of life rises as time slips through your fingers. He closes with: For my last point, let me zoom out and mention again why we are discussing this question in April 2021. It’s related to COVID-19. If indeed Caplan is correct, and an elderly life is only worth 1/1,000 of a young life, not only are “lockdowns” not justified, we would be foolish to take any steps to protect the elderly. In this case, we not only need to junk Social Security and Medicare, we need to junk the Great Barrington Declaration too. Focused Protection of the elderly? What foolishness, those lives aren’t worth more than a few pennies! Greatly overstated.  If 10-year-old lives are worth $20M, and 80-year-old lives are worth 1% as much, they’re still worth $200,000, not “pennies.”  Moderate COVID caution for non-vaccinated individuals is in order, as I’ve been saying all along.  But yes, reasonable estimates of the value of elderly lives do greatly undermine the case for the totalitarian COVID crusade of the last year.  Indeed, even if we count all years of life equally (not lives, but years of life), the totalitarian COVID crusade badly fails a cost-benefit test. P.S. What if I were elderly?  Since I’m only slightly past my peak IQ and common sense, I wish to state for the record that if there is ever a similar pandemic when I am elderly, my considered judgment is that (a) I do not want my family or friends to greatly disrupt their lives to protect me, and (b) I absolutely do not want to be isolated from family or friends for “my own protection.”  Indeed, since I plan to still be working at 80, I would like to continue teaching in-person during this future pandemic, though I would reluctantly choose to wear a mask when doing so. P.P.S. Tyler claims to agree with me over Jeremy, but I don’t think he’s going to retract this. (0 COMMENTS)

During a normal demand-side recession, wage growth tends to fall sharply, with a modest lag due to nominal wage stickiness. In this recession, however, it’s been hard to interpret the data due to “composition effects”. Put simply, lower paid workers were more likely to get laid off, so average hourly wages actually rose faster than normal last year. Fortunately, the government has another wage series that compares wage growth within a given job category. This shows average wage growth to have been relatively steady over the past year, which is still a bit surprising.  Wage growth normally slows sharply during severe recessions: Wage growth still might slow sharply, after all, wages respond with a lag.  But given the severity of the slump last March and April, I’d expect to see some evidence by now.  In the case of 2008, the severe slump didn’t begin until the second half of the year, and then wage growth fell a few months later. One possibility is that this time the recession reflects a decline in both aggregate demand and aggregate supply, so the overall effect on the price of labor is relatively small, even as quantity falls sharply.  (Never reason from a quantity change.) This fits in with all sorts of other evidence that this recession is unusual.  For instance, output and employment bounced back after the April 2020 slump much faster than after previous recessions.  Indeed the actual downturn lasted only two months.  Here’s the Wall Street Journal, discussing reports that companies are having trouble finding workers: One shouldn’t put too much weight on anecdotes, but these are corroborated by data. Some 7.4 million jobs were open in February, above the pre-pandemic level. By contrast, job vacancies plummeted by half in 2007-09. Mainstream economists tend to assume that causation goes from high unemployment to falling wages.  In my view, the root cause of most recessions is tight money, which reduces the equilibrium average wage rate faster than the decline in actual wages.  Because actual wages fall more slowly than equilibrium wages, the price of labor is too high.  This causes mass unemployment.  This recession was not caused by tight money, however, and hence there was no necessary reason for high unemployment to be correlated with falling wage growth. To summarize, when we finally get a recession caused by real factors, not a demand shortfall, we can see how different it is from normal recessions.  That should make us even more confident that most normal recessions are basically monetary problems.  (During my life, the 1974 recession was the one with the largest “real” component—prior to Covid-19.) One other point.  Although I often advocate NGDP targeting, in some models nominal wage targeting does even better.  If money were too tight then wage growth would be falling, and vice versa. In my view, the stability of nominal wage growth suggests that monetary policy has been roughly on target during this period. (0 COMMENTS)

  Tyler Cowen thinks so. In a post this morning, economist Tyler Cowen writes: Now consider some older people who have a lot of wealth but very little human capital.  These (selfish) individuals still will pay a lot to avoid death or risk of death, but in essence there is an externality.  They treat their wealth as “disappearing with their death” when in reality that wealth simply is transferred to others.  Therefore they overspend to keep themselves around on planet earth, and they will overpay for risk reduction. It’s true, of course, that their wealth doesn’t disappear with their death but is simply transferred to others. What does that have to do with there being an externality? Nothing. I would bet that almost no one who spends his/her own money on himself/herself treats his/her wealth as disappearing with death. Virtually everyone knows full well that declining to spend when near death will cause the heirs and, if the estate is large enough, the government, to get some of that wealth. But the person spending is spending it on its highest-valued use. Does the person spending it create pollution? noise? Maybe. But then that pollution or noise is the externality, not the spending per se. Moreover, if Tyler is right, then everyone spending on himself or herself, whether near death or not, is creating an externality. The reason is: it doesn’t get spent by someone else.     (0 COMMENTS)

Economic theories of politics sound warnings against oppression and tyranny. The prospect may seem abstract and theoretical, but history provides many examples of idealized political leaders who turned out to be self-interested tyrants and betrayed the power that naive citizens had granted them. Here is a telling one. At the end of the 19th century, many considered Germany to be the most advanced country in the world. It was at the first ranks of public health and the welfare state. Frederic C. Howe, an Ohio politician later associated with the FDR administration, “portrayed Germany as the world’s most advanced scientific state.” Many young economists who founded the American Economic Association in 1885 had studied there. (See Thomas C. Leonard, Illiberal Reformers, Princeton University Press, 2016.) It was still a sophisticated country as the Nazis were reaching for power. They were not ignorant barbarians. In August 1934, Rudolf Hess of the Nazi Party gave a speech asking Germans voters to approve a referendum proposal about making Adolf Hitler both Führer and Chancellor. (The featurde image of this post shows a cigarette card of the Nazi era.) One instructive excerpt from Hess’s speech: Someone may say that it is not good to put all power in one hand, since Adolf Hitler might use his authority arbitrarily and thoughtlessly! To that I can only say: The conscience of a moral personality is a far greater protection against the misuse of an office than is the supervision of parliament or the separation of powers. I know no one who has a stronger conscience, or is more true to his people, than Adolf Hitler. In the referendum that followed a few days later, some 90% voted yes for Hitler. The future confirmed that limited government and many centers of power are the only hope for liberty and prosperity, not the power and “conscience of a moral personality.” (0 COMMENTS)

Last year, I tried to figure out why there aren’t a lot more right-wing (or apolitical) firms.  A recent piece by Richard Hanania comes down firmly in favor of my Explanation #4.  To review: Explanation #4. Few moderates or right-wingers care enough to create a major profit opportunity.  While they don’t relish looking over their shoulders, they prefer their current job to an alternative where they can shoot their mouths off but earn a $1000 less per year.  In this story, the left proverbially just “wants it more.”  And as usual, the market takes the intensity of conflicting preferences into account. Hanania presents a pile of evidence that despite near-parity in ordinal preferences (the number of Americans who support Democrats roughly equals the number who support Republicans), there is a massive imbalance in cardinal preferences (the number of Americans who strongly support Democrats vastly exceeds the number who strongly support Republicans). Evidence?  Read the whole essay for the graphs; I’ll just summarize here. 1. Vastly more people donate money to Democrats than Republicans.  Assuming practically nobody donated to both Trump and Biden, which seems a pretty safe bet, as of late October, 9.6 million Americans donated to a presidential campaign, compared to 161 million who voted. In other words, 49.1% of all Americans cast a ballot in 2020, compared to 2.9% who cared enough to actually give money to one side or the other. 2. Left-wing protests attract far larger crowds: In September 2009, at the height of the Tea Party movement, conservatives held the “Taxpayer March on Washington,” which drew something like 60,000-70,000 people, leading one newspaper to call it “the largest conservative protest ever to storm the Capitol.” Since that time, the annual anti-abortion March for Life rally in Washington has drawn massive crowds, with estimates for some years ranging widely from low six figures to mid-to-high six figures. March for Life is not to be confused with “March for Our Lives,” a pro-gun control rally that activists claim saw 800,000 people turn out in 2018. All these events were dwarfed by the Women’s March in opposition to Trump, which drew by one estimate “between 3,267,134 and 5,246,670 people in the United States (our best guess is 4,157,894). 3. Liberals are also much more likely to personally shun conservatives than vice versa: Those on the left are more likely to block someone on social media over their views, be upset if their child marries someone from the other side, and find it hard to be friends with or date someone they disagree with politically. Hanania thoughtfully adds: “Not letting politics interfere with personal relationships is a sign that politics isn’t all that important to you.” 4. Leftists are much more likely to seek low-paid jobs yet politically-relevant jobs: A final way to understand cardinal utility is to consider the media and academia. Generally, these are professions that have absolutely terrible career prospects, and they draw people with high IQs who could expect to be making a lot more money doing something else. But for those who make it in these fields, individuals get to have an influence in society that is disproportionate to their status as measured by income. Hanania adds: People go into academia and journalism for generally idealistic reasons. Some conservatives might be turned away from these professions for political reasons, which poses a “chicken or egg” problem. In my experience though, a smart young person going into journalism is probably better off going into conservative media than they are liberal media, which is already saturated with people with elite degrees who cannot find stable employment. There’s a great deal of demand for conservative journalism among the general public, but few competent conservatives who want to be journalists given what the profession pays relative to what else smart people can be doing.   By the way, Hanania piece clearly surpasses mine by generalizing from business to institutions in general: Asking why corporations are woke is like asking why Hispanics tend to have two arms, or why the Houston Rockets have increased their number of 3-point shots taken over the last few decades. All humans tend to have two arms, and all NBA teams shoot more 3-pointers than in the past, so focusing on one subset of the population that has the same characteristics as all others in the group misses the point. I think one reason Woke Capital is getting so much attention is because we expect business to be more right-leaning, and corporations throwing in with the party of more taxes and regulation strikes us as odd. We are used to schools, non-profits, mainline religions, etc. taking liberal positions and feel like business should be different. But business is just being assimilated into a larger trend. Corporations are woke, meaning left wing on social issues relative to the general population, because institutions are woke. So the question becomes why are institutions woke? So the real story is just that right-wingers are apathetic?  Hanania suggests a competing spin: There’s a way to interpret the data discussed above that is more flattering to conservatives than presenting them as the ideology of people who don’t care. Those who identify on the right are happier, less mentally ill, and more likely to start families. Perhaps political activism is often a sign of a less well-adjusted mind or the result of seeking to fill an empty void in one’s personal life. Conservatives may tell themselves that they are the normal people party, too satisfied and content to expend much time or energy on changing the world. But in the end, the world they live in will ultimately reflect the preferences and values of their enemies. Overall, Hanania provides a wonderfully compelling explanation for a wide range of social phenomenon.  He doesn’t really address the question of, “What changed?”  But that’s pretty obvious in his framework.  What changed is that the left-right fervor gap has grown rapidly over the last few decades.  Especially among the young, who famously feel more fervor than their elders.  Makes sense to me. My main criticism: Hanania still fails to explain the sheer uniformity of left-wing cultural dominance.  Competition normally delivers more diversity than we’re getting.  And for that, I stand by my Explanation #5, which I flesh out greater detail here. Explanation #5. Discrimination law covertly stymies the creation of right-wing firms.  Most obviously, any firm that openly and aggressively opposed #MeToo and #BLM would soon be sued into oblivion. Which does raise the question: Since the right runs the government roughly half the time, why don’t they try a lot harder to defang the “discrimination laws” that do so much to cause political discrimination? P.S. Hanania’s piece thoughtfully discusses several other big issues, so read the whole thing.         (0 COMMENTS)

Over the past 12 years, U.S. airlines have accomplished an astonishing feat: carrying more than eight billion passengers without a fatal crash. Such numbers were once unimaginable, even among the most optimistic safety experts. But now, pilots for domestic carriers can expect to go through an entire career without experiencing a single engine malfunction or failure. Official statistics show that in recent years, the riskiest part of any airline trip in the U.S. is when aircraft wheels are on the ground, on runways or taxiways. The achievements stem from a sweeping safety reassessment—a virtual revolution in thinking—sparked by a small band of senior federal regulators, top industry executives and pilots-union leaders after a series of high-profile fatal crashes in the mid-1990s. To combat common industry hazards, they teamed up to launch voluntary incident reporting programs with carriers sharing data and no punishment for airlines or aviators when mistakes were uncovered. This is from Andy Pasztor, “The Airline Safety Revolution,” Wall Street Journal, April 16, 2021. (The print edition is Saturday/Sunday, April 17/18, 2021.) Unfortunately, it’s gated. It’s a tremendous article. The bio at the end says: Mr. Pasztor, who is writing a book about the history of air safety, recently retired from The Wall Street Journal, where he covered aviation since the mid-1990s. I’m guessing this is an excerpt from his forthcoming book.   (0 COMMENTS)

Matt Yglesias directed me to a graph showing that teenage employment has bounced back to near pre-Covid levels: This surprised me, as prime-age employment remains depressed at levels well below early 2020: What explains the difference?  There are many potential explanations, but one possibility is that teenagers are less likely to be receiving generous unemployment benefits, as many of them were not working when the Covid recession hit last March, or had not worked long enough to qualify.  What are some other theories? If I’m right, then prime age employment should bounce back after the extra $300/week benefits expire in early September. PS.  It’s true that in an absolute sense the teenage employment ratio is quite low, but it was also low in 2019 when the economy was booming and jobs were plentiful.  Today, teenagers are less likely to choose to work than back in the 20th century, when teen participation rates were higher.  Many teens now participate in extensive extracurricular activities to boost their chances of getting into a good college.  (I worked in a canning factory when I was 17.) (0 COMMENTS)

I’ve enjoyed Bryan Caplan’s recent two posts (here and here) about how the value of life varies with age and I’m inclined to agree with him. I think about my own situation. My mother died of cancer in December 1969 at age 53. My brother committed suicide in July 1970 at age 22, just shy of 23. My father died in June 1997 at age 87. And my sister died in November 2018 at age 72. When I think about my degree of sadness and loss, it corresponds with what Bryan says. I’m most upset (still) by the loss of my brother, then my mother, then my sister, and then my father. Of course, one potentially confounding factor is that I didn’t like them all equally. My father was the toughest, but we had a strong finish, starting in the early 1980s. Here’s a problem, though. This is my valuation of my siblings and parents. It says nothing about their own valuations of their lives. Clearly, my brother valued his life at zero in the moment he took his own life. Although, as I’ve learned from reading about suicide since, if I had been able to foresee his action and talk him out of it, he might have felt different even in a few days. A good rule for people who are thinking of suicide is similar to one that Mark Twain was purported to have said about the weather in New England: “If you don’t like the weather in New England now, just wait a few minutes.” Re suicide, “If you want to commit suicide, put it off until tomorrow.” Back to my point. I remember when Walter Oi came to UCLA when I was a graduate student and presented at Harold Demsetz’s law and economics workshop in about 1974 or 1975. My memory is a little vague here, but he presented what he found to be a quandary. His data showed that if, while driving, you hit someone and injured him badly, you or your insurance company would be required to pay $X. But if you killed him, you would be required to pay $Y, where Y is less than X. The moral of the story, he said jokingly, is if you hit him and he appears to be moving, make sure you back up and run him over. Armen Alchian gave him another way of looking at it. In the case where you kill him, he’s not around to deal with the consequences. But if you injure him badly, he is around and wants to be compensated. The idea, said Armen, is that the rates are set on the basis of the victim’s preferences: in one case he’s not around to have preferences. They are not set on the basis of the victim’s family’s preferences, who, if they love him, would want to be compensated more for his death. (In the comments, you might want to present alternate evidence on X versus Y. Be gentle because my memory is imperfect. Walter Oi might have been talking about workmen’s compensation or something like that.) The picture above is of Walter Oi.       (0 COMMENTS)