Marginal Revolution

The orca wars escalate, with special reference to the economics of fisheries

by Tyler Cowen on June 23, 2017 at 1:48 am in Current Affairs, Food and Drink, Games, Political Science | Permalink

The orcas will wait all day for a fisher to accumulate a catch of halibut, and then deftly rob them blind. They will relentlessly stalk individual fishing boats, sometimes forcing them back into port.

Most chilling of all, this is new: After decades of relatively peaceful coexistence with cod and halibut fishers off the coast of Alaska, the region’s orcas appear to be turning on them in greater numbers.

“We’ve been chased out of the Bering Sea,” said Paul Clampitt, Washington State-based co-owner of the F/V Augustine.

Like many boats, the Augustine has tried electronic noisemakers to ward off the animals, but the orcas simply got used to them.

“It became a dinner bell,” said Clampitt.

John McHenry, owner of the F/V Seymour, described orca pods near Alaska’s Aleutian Islands as being like a “motorcycle gang.”

“You’d see two of them show up, and that’s the end of the trip. Pretty soon all 40 of them would be around you,” he said.

A report this week in the Alaska Dispatch News outlined instances of aggressive orcas harassing boats relentlessly — even refusing to leave after a desperate skipper cut the engine and drifted silently for 18 hours.

These are not Coasean orcas, or are they? And sperm whales are now in on the act:

Fishing lines are also being pillaged by sperm whales, the large square-headed whale best known as the white whale in Moby Dick.

“Since 1997, reports of depredation have increased dramatically,” noted a report by the Southeast Alaska Sperm Whale Avoidance Project.

A remarkable 2006 video by the Avoidance Project captured one of the 50,000 kg whales delicately shaking fish loose from a line. After a particularly heavy assault by sperm whales, fishers are known to pull up lines in which up to 90 per cent of the catch has disappeared or been mangled.

Here is the full story, with video, and further points of interest. For the pointer I thank the excellent Mark Thorson.

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The commerce that is Chinese

by Tyler Cowen on June 23, 2017 at 12:51 am in Current Affairs, Economics, Sports, Travel | Permalink

As organized, multiplayer video game competitions — also known as esports, or electronic sports — continue to gain recognition in China, entertainment giant Tencent Holdings Ltd. has accelerated its esports expansion with the unveiling of a new five-year plan.

The plan, which involves setting up esports leagues, tournaments and associations, nurturing players and constructing esports-themed industrial parks, was published by Tencent E-Sports, a subsidiary established in early December.

Tencent is the world’s largest mobile gaming company by revenue, according to research firm Newzoo. With the new plan, it aims to create a 100-billion-yuan esports industry in China within five years, the company announced on Friday at a press conference.

The plan was based on Tencent’s expectations that China is set to become the world’s largest esports market. Tencent predicted there will be 220 million esports players in China and 335 million globally by the end of this year.

Here is the story. And:

The number of Chinese “red tourists” who visit Russia to retrace a shared communist history has been soaring in recent years, contributing to the wave of Chinese visitors to Russia that has grown with the help of closer bilateral relations between the countries, according to industry insiders on Tuesday.

“There definitely is growing interest among Chinese tourists for Russia, especially the older generations, who are nostalgic about the history of Russia,” Zeng Qingan, general manager of Beijing Global Travel Ltd, told the Global Times.

Zeng said that since his company started tour groups to Russia nine years ago, the number of participants has increased fast, especially after the company redesigned its tour routes in 2014 to cover historical Soviet Union era sites, including the Red Square and Victory Square in Moscow, the Lenin Memorial Museum in Ulyanovsk and Moscow State University. The travel firm called it the “Red Tourism” package.

Link here. The revolution not only will be televised, but they will make an e-sports version of it, marketed on WeChat.

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Grading Modi

by Alex Tabarrok on June 22, 2017 at 3:18 pm in Economics | Permalink

There have been a number of articles recently reviewing economic reform under India’s Prime Minister Narendra Modi. The best is this excellent report from the Economist:

FEW countries would see a tax requiring some businesses to file over 1,000 returns a year as an improvement. But India might. A nationwide Goods and Services Tax (GST) is set to come into force on July 1st. It will replace such a tangle of national and local levies and duties that even the prospect of 37 annual filings (three a month plus an annual return) for each of India’s 29 states in which a business operates is a relief by comparison.

By replacing domestic tariffs, the new tax should rid India of checkposts at internal borders, where lorries carrying goods typically languish for hours. Less red tape, however, comes with complications. Most countries with a value-added tax settle on a single rate for many goods and services. India has opted for six, ranging from zero to 28%. Officialdom decrees, for example, that shampoo, wallpaper and fizzy water are luxuries to be taxed at 28%; eyeliner, curry paste and plain water will attract an 18% levy. Restaurants will pay 12%, unless they are small (5%) or air-conditioned (18%).

Hopes that liberalising reforms would breathe new life into India’s economy have permeated the air since Narendra Modi swept to power as prime minister in May 2014. But the GST is perhaps the most obvious example of an opportunity wasted. Economists think a simple GST, which would have ensured businesses focus on goods and services that consumers want rather than those favoured by the tax code, might have added two percentage points to GDP growth. The complicated version will probably yield less than half that and only after a painful transition.

Read the whole thing.

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Temporarily postponed markets in everything, Gilligan’s Island edition

by Tyler Cowen on June 22, 2017 at 1:38 pm in Uncategorized | Permalink

There is a restaurant in New Jersey called Tina Louise.

It’s serves “a taste of Asia.” We were thinking tropical island fare. According to the website, it is temporarily closed due to a fire. But if you someday find yourself in Carlstadt, New Jersey…

Link here, the restaurant’s home page is here, menu here (pdf, yum), here are the Yelp reviews.

I thank an anonymous MR reader for the pointer.

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Thursday assorted links

by Tyler Cowen on June 22, 2017 at 12:04 pm in Uncategorized | Permalink

1. Those who leave vs. those who stay.

2. Cass Sunstein paper on mandatory labeling for GMOs.

3. Did the Scalise shooter almost cause a constitutional crisis?

4. Is there an oversupply of American restaurants?

5. Rollback of Medicaid provisions in the GOP health bill (NYT).

6. Excellent Eduardo Porter piece on the costliness of America’s energy transformation (NYT).

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To what extent is current alt right populism an Anglo-American phenomenon?

by Tyler Cowen on June 22, 2017 at 10:48 am in Current Affairs, Philosophy, Political Science | Permalink

That is the topic of my latest Bloomberg column, here is part of the argument:

More generally, the U.S. is an environment where new products — and here I mean of the non-political sort — get started relatively easily. People are willing to take more chances with their consumption, and so this is a fertile environment for startups, which then spread to the broader world.

As for Britain, the traditional aristocracy is remarkably weakened, voting along class lines has disappeared and, most observers agree, if it were really up to the House of Lords, Brexit wouldn’t be happening.

On top of these factors is English, by far the world’s leading language for scientific and philosophic and political discourse, for blogs, for Twitter, and for many other kinds of dialogue. We shouldn’t be surprised if new ideas are more likely to surface and take hold in the English-speaking world.

Here is another bit:

To be sure, some evidence suggests the influence of President Trump is actually causing Western Europe to become more liberal. But don’t confuse style and substance. Another five to 10 years of deindustrialization, terrorist attacks and migrant crises might lead to a “home brew” version of Trumpian ideas in continental Europe, albeit cloaked in a more intellectual and more aristocratic garb. There is a running joke going around along the lines of “If fascist ideas come to [Country X], they will come in the form of anti-fascism.” Once the properly European version of the product comes to the fore, it might do very well indeed.

There is much more at the link.

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How and why did economic history blossom?

by Tyler Cowen on June 22, 2017 at 12:47 am in Economics, Education, History, Uncategorized | Permalink

C. inquires:

Why do we live in the golden age of economic history? Was there something identifiable that caused the subfield to grow in esteem? Some new technology that changed the costs of research (not that I can see)? Something else?

Mark Koyama should write a Medium essay on this, but in the meantime here are my thoughts:

1. We now know much, much more about the earlier economic histories of China, India, and some other locales. The rise of more and better graduate students from the emerging economies, or for that matter from Europe, has been essential here.

2. Some of the turn toward economic history came with the financial crisis, and the search for longer-term parallels, which meant looking back in history, most of all to the Great Depression.

3. Although the advance of cliometrics started a long time ago, we are now finally at intergenerational margins where economic historians are as quantitatively well-equipped as most parts of the applied micro spectrum.

4. The stranger the time period, the more people will have to look to broader stretches of history for understanding. Yes, this one is an uh-oh.

5. Some applied micro fields have become a little more boring, so that has helped a partial shift of status to economic history. Public data sets have been exhausted, and a lot of economic history data sets are “weird or idiosyncratic” data sets, which now are “in” and I predict will stay “in” for a long while to come because they offer the possibilities of both new discoveries and moats.

6. An academic trend that hasn’t yet been exploited usually ends up exploited, sooner or later, once the right nudge comes along.

5b, 6b. In chess, the top players are opting for the Giuoco Piano once again.

7. Competing economic models are more “allowed” in the subfield — not everything must be neoclassical — which has opened economic historians to more wide-ranging questions. Economic history remains a good place to pursue the questions about economics that initially interested many people as undergraduates.

8. Academic attention is more media-driven these days, and good economic history papers usually have a story of some kind, and perhaps also a historical personage, event, or institution of broader interest.

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The new Charles C. Mann book, The Wizard and the Prophet

by Tyler Cowen on June 22, 2017 at 12:01 am in Books, Food and Drink, History, Science | Permalink

I am of course excited about this, as his 1491 and 1493 are two of my favorite books:

The Wizard and the Prophet: Two Remarkable Scientists and Their Dueling Visions to Shape Tomorrow’s World

Here is the Amazon summary:

In forty years, Earth’s population will reach ten billion. Can our world support that? What kind of world will it be? Those answering these questions generally fall into two deeply divided groups–Wizards and Prophets, as Charles Mann calls them in this balanced, authoritative, nonpolemical new book. The Prophets, he explains, follow William Vogt, a founding environmentalist who believed that in using more than our planet has to give, our prosperity will lead us to ruin. Cut back! was his mantra. Otherwise everyone will lose! The Wizards are the heirs of Norman Borlaug, whose research, in effect, wrangled the world in service to our species to produce modern high-yield crops that then saved millions from starvation. Innovate! was Borlaug’s cry. Only in that way can everyone win! Mann delves into these diverging viewpoints to assess the four great challenges humanity faces–food, water, energy, climate change–grounding each in historical context and weighing the options for the future. With our civilization on the line, the author’s insightful analysis is an essential addition to the urgent conversation about how our children will fare on an increasingly crowded Earth.

I pre-ordered mine but a moment ago.

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Wednesday assorted links

by Tyler Cowen on June 21, 2017 at 1:47 pm in Uncategorized | Permalink

1. 7 year olds solve coordination problems over 80% of time, 5 year olds less than 20% of time -finds Grueneisen

2. Claims about wages in southern Brazil. (Better link here)

3. “”Socialists who think charter school success can’t be scaled” occupy an interesting ideological space” — Adam Ozimek.

4. NYT profile of CBO head Keith Hall.

5. WeChat vs. Apple, bet on WeChat.

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Beijing notes

by Tyler Cowen on June 21, 2017 at 1:12 pm in Uncategorized | Permalink

To consider the delta, for all the talk of lactose intolerance, dairy products are booming. Taxi drivers seem to have lost their reluctance to pick up Westerners. More and more hutongs have been removed from downtown (duh). There is a street with three different outlets selling Mexican-style churros. Overall it feels nicer and more normal.

I am the odd bird who prefers Beijing to Shanghai. The food is more representative of China as a whole, the faces show more drama, you are more likely to see “weird random ****” driving around in a cab, and the core culture is less chi-chi. It’s the most important city in the world. Let’s hope Washington does nothing to reclaim that mantle, New York never will.

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My podcast with Ed Luce

by Tyler Cowen on June 21, 2017 at 8:11 am in Books, Current Affairs, History, Political Science, Uncategorized | Permalink

It was a forty-minute chat (podcast, no transcript), most of all about the decline of liberalism, based around Ed’s new and very well-received book The Retreat of Western Liberalism. We also covered what a future liberalism will look like, to what extent current populism is an Anglo-American phenomenon, Modi’s India, whether Kubrick, Hitchcock, and John Lennon are overrated or underrated, and what it is like to be a speechwriter for Larry Summers, among other topics. Here is the opening bit:

COWEN: Having a taste for the esoteric, I’d like to start with a question. If we go back to the 1680s and James II takes the throne, then, William of Orange comes over from what we now call the Netherlands and pushes him out — was that a liberal development or an illiberal development?

LUCE: At the time, it was very much a liberal development. Of course, we then get the bill of rights. We then get a further restriction of the power of the monarchy that comes with this new Dutch co-monarchy, William and Mary.

In retrospect, given the fact that this is very much the Protestant fundamentalist, the Battle of the Boyne, the victory of the Orange forces, William of Orange. In retrospect, I think it’s being celebrated in a pretty illiberal manner.

Of course, that’s very germane right now in Britain, given that Theresa May is trying to form a government in which the DUP, the Ulster Unionist Party are going to make up the difference between being a minority government and majority government.

It depends which bit of history you’re looking at it from is my answer.

And then I toss him this question:

COWEN: Let’s say we take the British election that was just held. So many people are calling it a mess, chaos, no-good results but, say, I offered you a revisionist view, how would you respond?

I would say it’s the first real election where voting by class has essentially fallen away. You even have Kensington in London going Labour for the first time since 1974.

Voting is now much more by age. You’ve more female representatives than ever before. You’ve 15 Muslims elected, 7 of those being female. More LGBT individuals. Maybe the new liberalism is reflected by that kind of elevation.

Then on top of that, the election definitely thwarted Scottish independence. It probably helped a soft border for Ireland. We hope it’s helping a soft Brexit.

No Corbyn, no UKIP. Wasn’t it exactly the vote we needed and the most liberal outcome you could have imagined, at least relative to all the initial constraints? Or not?

Ed is extremely interesting and articulate throughout.

Again, you can subscribe to the whole series here, we will be doing more bonus offerings of this nature.

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Is the 100-year Argentine bond good news or bad news?

by Tyler Cowen on June 21, 2017 at 3:02 am in Current Affairs, Economics | Permalink

Mr Costa explained that long-duration bonds are the best way for real money investors to place bets on Argentina, given that they are unable to leverage themselves like a more nimble hedge fund. “If you are an investor with a constructive view on Argentina, what you want is duration,” he said.

Argentina sold $2.75bn of the debt with a coupon of 7.125 per cent, equating to an annual yield of 7.9 per cent, according to a statement from the Argentine finance ministry late on Monday. The bond attracted $9.75bn in orders from investors.

But don’t focus on the 100 years:

Given the bond was sold at a yield of almost 8 per cent an investor would recoup their initial investment in around 12 years.

Yields could fall by at least 150 basis points, moving more in line with other major economies in the region such as Brazil — implying capital gains on such bonds in the double digits. “Those are pretty good returns. At a rate of 8 per cent or higher, it’s a buy,” Mr Costa said.

The bad news is what you must endure to have a crack at the 8 percent:

Argentina has defaulted on its sovereign debt eight times since independence in 1816, spectacularly so in 2001 on $100bn of bonds — at the time the world’s largest default — and most recently in 2014 after clashing with Elliott Management, an aggressive hedge fund.

But Mr Macri’s government “cured” the latest default in 2016, and times have changed, said Joe Harper, a partner at Explorador Capital Management, an investment fund focused on Latin America. “The policy pendulum in Argentina has shifted to the centre, and the country’s next 100 years will be very different than the last century.”

Here is the full FT story, by Benedict Mander and Robin Wigglesworth.

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Shakespeare in an age of Trump is a little disconcerting

by Tyler Cowen on June 21, 2017 at 1:03 am in Current Affairs, History, Law, Political Science, The Arts | Permalink

That is the topic of my latest Bloomberg column, here is just one excerpt:

I see Trump as not a ruler but rather akin to the various fools, jesters or, in the case of Lear, the character of Edgar, who appears before the king in disguise and warns him of his enemies. Don’t interpret the word “fool” too literally here. The most common features of these characters is that they speak between the cracks in the action and utter sentiments that no one else dares to voice. That’s Trump on Twitter. Would the word “covfefe” be so out of place in one of those poetic rants?

And:

And looking forward, what might a study of Shakespeare tell us to watch for in the evolution of the Trump administration? How’s this for a start?:

Blood may be thicker than water, but nonetheless power struggles can break family bonds rather easily.
Power cannot be given away and still retained.
Don’t overweight legitimacy and birth order in determining succession.
Love is a wild card.
There is no maximum limit to chaos.

Do read the whole thing.

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