Utopia, you are standing in it!

This post is a reblog of the Manhattan Contrarian Quiz — Climate Tipping Points Edition
October 11, 2018/ by Francis Menton. Text in italics with my bolds.

On Monday the UN IPCC came out with its latest Special Report, this one supposedly addressed specifically to the allegedly dire consequences of allowing world temperatures to increase by more than an arbitrarily-selected threshold. Here is a copy of the “Summary for Policymakers,” and here is a copy of the accompanying press release. But I urge you not to peek at those until you have taken today’s very important Manhattan Contrarian Climate Tipping Points Quiz.

Many have noted that this latest Report seems to step up the level of hysteria and shrieking about the threat of climate change to a whole new level. The gist is, we are doomed, doomed, doomed unless mankind takes immediate drastic action to reduce and then eliminate carbon…

Occasionally, the Nobel Committee gives a prize which is unexpected, surprising, yet deft in how it points out underappreciated research. This year, they did no such thing. Both William Nordhaus and Paul Romer have been running favorites for years in my Nobel betting pool with friends at the Federal Reserve. The surprise, if anything, is that the prize went to both men together: Nordhaus is best known for his environmental economics, and Romer for his theory of “endogenous” growth.

On reflection, the connection between their work is obvious. But it is the connection that makes clear how inaccurate many of today’s headlines – “an economic prize for climate change” – really is. Because it is not the climate that both winners build on, but rather a more fundamental economic question: economic growth. Why are some places and times rich and others poor? And what is the impact of these differences?…

In my previous post here I explained why the Google memo is fundamentally right in its factual claims about the broad population, which in turn explains the proportion of women in Google itself. Here I discuss some arguments against what has already been explained.

For the first time since its inception, the Five Star Movement finds itself in government, with the stated intention of increasing the use of direct democracy by increasing the circumstances in which a national referendum can be held. Carlo Fusaro examines the proposals and their potential impact on Italian democracy. 

This post intends to report on the most recent initiatives concerning referendums by the new populist majority in Italy, as represented in the government formed by the Five Star Movement (M5S) and by the League (formerly known as the Northern League), following the 4 March 2018 elections.

The proposals

While the two vice-premiers Matteo Salvini and Luigi di Maio have been making headlines in other areas, Riccardo Fraccaro, a University of Trento graduate in international environmental law who serves as the minister for relations with parliament and direct democracy, has recently announced the constitutional reform strategy of the Cabinet.

Since…

Greeted with wide acclaim, Why Nations Fail: The Origins of Power, Prosperity, and Poverty, should put to bed all debate on using foreign aid to promote economic development on a national level.

Authors Daron Acemoglu and James A. Robinson effectively deploy path dependency to explain the trajectories of the political institutions that form the core of their argument: Nations with “inclusive” political institutions succeed economically whereas those saddled with extractive” political institutions fail. Citing cases from myriad times and places, the authors demonstrate the relationship between political institutions and economic development. The authors tether their argument to Schumpeter’s idea of creative destruction in the marketplace: No creative destruction, no long-term development. Nations encumbered by extractive political institutions typically privilege monopoly. And so, over time, their economies atrophy.

So far, so good. In deploying path dependency to explain why institutions, once in place, tend to persist, authors add a solid…

The UN climate report known as SR15 calls for high carbon taxes from $135 to $5,500/ton while a Wall Street Journal op-ed by Bjorn Lomborg of Oct. 9, 2018 says the costs of proposed CO2 cuts are not worth it, leading the Friends of Science Society to slam the UN report as Goldilocks thinking without any rational cost-benefit analysis or practical plan.

Friends of Science says the WSJ paragraph in which Lomborg describes the economic impact on Europe of cutting emissions 80% by 2050 should be front page news in every newspaper in Europe and North America. Lomborg notes that, with a well designed and coordinated climate policy (i.e. the opposite of what European and North American governments have now), the annual costs will reach U.S. $3.3 trillion, “more than twice what EU governments spend today on health, education, recreation, housing, environment, police and defense combined”.

“The policy will make…

In the rush to regulate –  that seems to characterise all our governments these days – it was announced yesterday that government plans to legislate to give the force of statute law (complete with penalties) to “do not knock” signs on someone’s front door.       What next?  Statutory penalties for, say, people who dawdle down Lambton Quay at lunchtime trying to text as they walk, or any of the many other minor social irritants?

But the initiative that particularly caught my eye was a proposal to legislate to fix the maximum cost of “high cost” credit at no more than 100 per cent of the value of the loan.  Borrow $500 and the total interest and fees you will ever pay will be capped at $500.   Apparently (judging from the high level material the minister published) regardless of how long the term of the loan is.  That…

Simon Franek brings us another piece of buried treasure from the FEE archive. This time it is Murray Rothbard’s article “Laissez-Faire Rides Again” from the February 1973 edition of Intellectual Discourse. Click the image below for the PDF.

In this post I write about the connections between Paul Romer’s work, which is essentially applied theory, and the empirical work on long-run economic growth done by economic historians. How was Romer influenced by the work of economic historians? has he influenced economic history? and have his theories been confirmed by the recent work of economic historians? (preview: I will argue that the answer is no).

Addendum shortly after publishing: my point above is not that Romer is wrong in general; in fact some of his ideas *about ideas* are fundamental for us to think about growth in the past. (Read on if this isn’t clear yet.)

Paul Romer’s was a well-deserved and long-anticipated prize. Many predicted he would eventually win, including myself in my very first academic article, written when I was a undergradute and published in 2008. (alternatively, click here for an ungated version). I now…