Tag: USA

Ross Douthat and Noah Smith on Asia (kinda)

The reason I say kinda is because Ross Douthat’s column is titled “Why We Should Fear More Than Middle Eastern War“. Noah Smith’s post, on the other hand, is titled “Asia Is Much More Important to US Interests Than The Middle East“.

But both are really talking about the same thing, if for slightly different reasons: the real fight for the USA is going to be with China, and therefore Asia is what President Biden (and whoever comes next) needs to focus on.

Here’s Ross Douthat:

“It makes sense to talk about China, Iran and Russia as a loose alliance trying to undermine American power, but it is not a trio of equals. Only China is an arguable peer of the United States, only China’s technological and industrial might can hope to match our own, and only China has the capacity to project power globally as well as regionally.”

And here’s Noah:

“The EU and the UK together have more than enough people, industrial capacity, and technology to defend against Russian aggression indefinitely with minimal American assistance, should they choose to do so. The only reason the U.S. remains key to Ukraine’s war effort is that Europe has been reluctant to step fully into that role. Over time, that will hopefully change. But in Asia, China is so strong that U.S. power is indispensable.

In sum, Asia wants and needs the U.S. to protect it. It needs U.S. military power and economic engagement, not to crush China, but to preserve the status quo that has worked so well. Developed Asian countries want to keep being rich and free, and developing Asian countries want to keep getting rich on their own, and to do this they need the U.S. to deter Xi Jinping from trying to upend the modern world’s greatest success story.”

Wish it away as much as you like, there is likely to be a showdown of sorts between America on the one side, and Russia, China and Iran on the other. Who else will be with America, and to what extent (and for what reasons) will only become clearer with time, and ditto for the other side. But it is coming – like I said, like it or not.

By the way, Noah Smith has advice for the United States about how to go about getting the answers to the questions I raised in the previous paragraph:

In Asia, meanwhile, the U.S. should be beefing up both our defensive power and our engagement with other countries. We need to accelerate the supply of defensive weapons to Taiwan, Japan, Vietnam, India, and the Philippines, and to keep building and strengthening and expanding multilateral organizations like the Quad. We need to re-engage economically by re-joining the modified TPP, and by creating a dense network of other economic agreements in Asia. And in general, we just need to pay a lot of attention to the region, making sure our allies and quasi-allies and potential allies know we’re there for the long haul, and won’t suddenly withdraw to go plunge into some foolish conflict in the Middle East.

https://www.noahpinion.blog/p/asia-is-much-more-important-to-us

In effect, both Ross and Noah are asking Biden a question I am fond of asking here (and they’re answering it for him too): what are you optimizing for?

And both of them are saying that America should be optimizing for going up against, and not being defeated by, China.

(The way I chose to frame that last sentence is striking to me, by the way, and I realized it as I was typing it out: not being defeated by China. Not, you understand, defeating China. Quite telling, no?)

Why does this matter for the USA?

China hawks tend to argue that losing a war over Taiwan would be much worse than our post-9/11 debacles, worse than letting Vladimir Putin hold the Donbas and Crimea permanently. You cannot definitively prove this, but I think they’re right: The establishment of Chinese military pre-eminence in East Asia would be a unique geopolitical shock, with dire effects on the viability of America’s alliance systems, on the likelihood of regional wars and arms races and on our ability to maintain the global trading system that undergirds our prosperity at home.

And it’s at home where I fear the effects of such a defeat the most. America has experience losing wars of empire — in Vietnam and Afghanistan, for example, where we were extending ourselves without putting our full might into the fray. But we have no experience being defeated in straightforward combat, not guerrilla war, by a great-power rival and ideological competitor.

Whatever anxieties you have about our current political divisions, whether you fear left-wing disillusionment with America or right-wing disillusionment with democracy or both, such a defeat seems more likely than anything to accelerate us toward a real internal crisis. Which is why, even with other foreign crises burning hot, a debacle in East Asia remains the scenario that the United States should be working most intensely to avert.

https://www.nytimes.com/2023/10/21/opinion/china-taiwan-war.html

And what about India? What is our position, and what should be our position?

The really big wild card here is India, which has a huge population and a reasonably hefty economy. The USSR was India’s protector during the Cold War, and much of India’s military equipment still comes from Russia (though this is starting to shift). So India can’t be expected to enter into any conflict against Russia. But China is a very different matter. China is India’s main military threat, and the two countries have come to blows recently over a disputed border. They are also rivals for influence in the Indo-Pacific region. This is why India has joined the Quad, forging a loose quasi-alliance with the U.S., Japan and Australia whose purpose is obviously to hedge against China.

https://www.noahpinion.blog/p/the-war-economy-sizing-up-the-new

We live in interesting times. On that score, there is no doubt.

One person worth following on Twitter on this topic is Elbridge Colby. This is his pinned tweet, if you’re asking why he is worth following on this issue:

Bottomline: buckle up. Life is about to get very interesting indeed.

Robin Brooks on the Whispers from Marrakesh

Angus Deaton on Adam Smith and the Provisioning of Healthcare in America

Join me in staring at this chart. I have been doing so, on and off, for the past couple of days:

https://www.bostonreview.net/articles/how-misreading-adam-smith-helped-spawn-deaths-of-despair/

This is Figure 2 from a speech given recently by Angus Deaton at the Adam Smith Tercentenary celebrations at the University of Glasgow on June 8, 2023. I’ll have much more to say about the speech – that is the subject of today’s post – but for the moment, look at the chart.

It shows you life expectancy at age twenty-five in the United States of America (US) and Scotland (SCO). What does life expectancy at age twenty-five mean? Well, what does life expectancy at any age mean?

Life expectancy at a certain age is the mean additional number of years that a person of that age can expect to live, if subjected throughout the rest of his or her life to the current mortality conditions (age-specific probabilities of dying, i.e. the death rates observed for the current period).

https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Glossary:Life_expectancy

In simple English, if you made it to the age of twenty-five as an American man in the year 1990, you could expect to live an additional fifty-one years from there on in (see the chart on the left).

Except for two problems.

The first problem is that the number, while indeed improving over time, started to drop off a little before 2020. A little before 2020, note, so this is not the pandemic we’re talking about.

And the second problem is a much bigger one. The red line in the chart on the left that I have been talking about is the red line at the top. That is the line for men in the United States with a BA degree.

The red line at the bottom of the chart – the life expectancy at age twenty-five for men in the United States without a BA degree – that red line is the one that I have not been able to stop thinking about. Here’s why:

  1. It is lower than the line for those with a BA throughout the entire period of analysis. US men without a BA degree have had lower life expectancy at twenty-five for the last thirty years.
  2. The life expectancy for this cohort at twenty-five started to drop off in 2010 – a full decade prior when compared to those with a BA degree.
  3. Not only has that drop-off not been arrested, it has accelerated a little before 2020. The data is probably even worse post 2020, but Angus Deaton has chosen to stop at 2020, since the topic of his speech isn’t the effects of the pandemic.

Outcomes over intentions, always remember. It doesn’t matter what the intentions were in 1990 or have been since then. Whatever they may have been (and are), the outcomes show that something, somewhere has gone wrong.

What has gone wrong? Can it be fixed? If so, how? Why should an Indian blogger care about this when there are so many other problems more specific to India?

I’ll answer each of these questions in turn, but I’ll begin with the last of these first.

Why should an Indian blogger care about this when there are so many other problems more specific to India?

For the same reason that an Indian blogger should care about what South Korea got right in the 1950’s when it comes to industrial policy. Because we should aim to try and replicate policies that have worked in other parts of the world, while being mindful of the opportunity costs of these policies. And by the same token, we should aim to try and avoid policies that have not worked in other parts of the world, while being mindful of the opportunity costs of not implementing those policies.

The second half of the last sentence in the paragraph above is quite something to think through, but we’ll get to it later on.

Being a student of the Indian economy requires you to be a student of economic policies the world over, and that over the years.

What has gone wrong?

Not just what has gone wrong, of course, but also why has it gone wrong.

It is here that we get into the deep and tricky part of the ocean. Tricky because the diagnosis of a problem depends upon your ability to reason things through. Your ability to reason things through is in turn dependent upon:

  1. How well you know you know your facts
  2. How well you are able to analyze them in order to reach a conclusion
  3. How familiar you are with the developments within the subject being analyzed
  4. The tools and theories being used for analysis.

Let’s take the first three of these as a given in this specific instance, and so too the first part of the fourth. It is the second part of fourth point that Angus Deaton focusses upon.

What are we analyzing here? The fact that life expectancy at twenty-five for American men is declining, and that the decline is worse among men without a BA degree. What theory should we advance for trying to understand why this has happened?

There can be many, but let’s cleave them into two parts for now.

Theory 1: There is too little government support when it comes to the provisioning of healthcare in the United States of America.

Theory 2: There is too much government support when it comes to the provisioning of healthcare in the United States of America.

The good news is that one hundred percent of economists upon reading this have gone “Aha! Exactly!”

The bad news is that some of them said so upon reading Theory 1, and some of them upon reading Theory 2.

So which is it? Why so, and how do we know?

I wouldn’t be much of an economist if I didn’t have an answer to this question. But more importantly, I wouldn’t be much of a teacher if I didn’t give you an overview of both theories. That is exactly what I plan to do over the course of the next two days, so stay tuned.

On Specificity and Sensitivity

Before the pandemic came along, it was relatively more difficult to get students to be truly interested in the topic of specificity and sensitivity. And in a sense, understandably so. By that I do not mean the topic is not important – it absolutely is – but rather that I can understand why eyes may glaze over just a little bit:

Sensitivity and specificity mathematically describe the accuracy of a test which reports the presence or absence of a condition. If individuals who have the condition are considered “positive” and those who don’t are considered “negative”, then sensitivity is a measure of how well a test can identify true positives and specificity is a measure of how well a test can identify true negatives

https://en.wikipedia.org/wiki/Sensitivity_and_specificity

But when we’ve all got skin in the game, it’s a whole other story.

“We’re going to learn all about specificity and sensitivity today” is one way to begin a class on the topic.

“Let’s say you self-administered a Rapid Antigen Test in 2020, and the test came back positive. Do you have Covid or not?” is another.

Incentives matter!

I’ve linked to this thread before, but it is worth sharing once again, for it remains the best way to quickly grok both what specificity and sensitivity are, but also to get a sense of how to untangle the two in your own head:

Why do I bring this up today? Because now that we’re past the pandemic, how do we now motivate students to learn about specificity and sensitivity?

By asking, as it turns out, if we’d prefer detection systems to pick up on more objects in the sky (sensitivity), or get better at picking up only the relevant objects in the sky (specificity)!

After the transit of the spy balloon this month, the North American Aerospace Defense Command, or NORAD, adjusted its radar system to make it more sensitive. As a result, the number of objects it detected increased sharply. In other words, NORAD is picking up more incursions because it is looking for them, spurred on by the heightened awareness caused by the furor over the spy balloon, which floated over the continental United States for a week before an F-22 shot it down on Feb. 4.

https://nyti.ms/3HUWnGD

To a statistician, it doesn’t matter if it’s objects in the sky or objects in your body. The principle remains the same, and it is the principle that you should internalize as a student. But also, it is equally important that you ask yourself a very important, and a very underrated question once you’ve learned the principle in question:

Where else is this applicable?

I cannot begin to tell you how much more interesting things become when you ask and answer this question. UFO’s and viruses in your body – what a class in statistics this would be!

No?

Incentives Matter, the International Trade Edition

A chart and a paragraph from The Economist to get us started today. First, the chart:

https://www.economist.com/finance-and-economics/2022/11/06/who-wins-from-the-unravelling-of-sino-american-trade

I’ve been a student of economics for a little more than two decades, and the one thing that is quite familiar to me in this chart is how large China’s share is in US imports (that’s what the “17” at the bottom right of the chart represents. Spend some time going over the rest of the numbers on the right of this chart, and come to the realization that China is about 50% more than all of the other nations on this chart combined.)

Being a student of economics in these past two decades makes it inevitable that some notions of how the world works and functions will get deeply ingrained. And the idea that China will be much larger in everything compared to, often, the addition of all other countries performances has become a useful rule of thumb. Note that I am not advocating forming such a rule for the future – I’m simply saying this has been the case for the past two decades.

But as the Nobel Laureate said, the times, they’re a-changin’:

Yet Mr Trump’s tariffs seem to have played an important role. According to recent analysis of industry data by Chad Bown of the Peterson Institute for International Economics, a think-tank, China’s share of America’s imports rose from 36% to 39% this year in goods not covered by tariffs. For goods subject to a 7.5% tariff, however, China’s share sank from 24% to 18%. And for those hit by a whopping 25% tariff, which covers lots of it equipment, China’s share of imports fell from 16% to 10%. Overall America is now much less dependent on Chinese goods, from furniture to semiconductors.

https://www.economist.com/finance-and-economics/2022/11/06/who-wins-from-the-unravelling-of-sino-american-trade (Emphasis added)

This post isn’t about whether Trump should have imposed those tariffs or not, nor is it about whether those tariffs have been worth it. That is an important topic, but we’re going to skip over it in today’s post. Today is just a reaffirmation of a principle of economics:

When something becomes more expensive, there will be lesser demand for it.

That, of course, is just another way to state the law of demand. You can draw a curve, if you like, or you can phrase it the way I did, or you can write out a paragraph that gives an application of the law, like The Economist did. But the next time you read people opining about whether Policy X will work or not, ask yourself how the incentives have been realigned as a consequence of the new policy.

By how much will demand go down (elasticity), should this policy be implemented or not (geopolitics), and what might be the impact of this policy on China and America and other nations (international trade) are all excellent questions, and they will keep all manner of professionals busy for decades to come.

But again, that’s for another day. Today’s post is about helping you realize that the law of demand is one way to understand incentives, and (don’t stop me even if you have heard this before) it is about chanting a mantra that all economics students would do well to internalize:

Incentives Matter

MADDER

If you are even an amateur fan of game theory, you must have come across the term “MAD”:

Mutual assured destruction (MAD) is a doctrine of military strategy and national security policy in which a full-scale use of nuclear weapons by two or more opposing sides would cause the complete annihilation of both the attacker and the defender (see pre-emptive nuclear strike and second strike). It is based on the theory of deterrence, which holds that the threat of using strong weapons against the enemy prevents the enemy’s use of those same weapons. The strategy is a form of Nash equilibrium in which, once armed, neither side has any incentive to initiate a conflict or to disarm.
The term “mutual assured destruction”, commonly abbreviated “MAD”, was coined by Donald Brennan, a strategist working in Herman Kahn’s Hudson Institute in 1962. However, Brennan came up with this acronym ironically, to argue that holding weapons capable of destroying society was irrational.

https://en.wikipedia.org/wiki/Mutual_assured_destruction

As with most theoretical concepts, it has its fair share of exceptions and limitations. Reading the Criticism section of the Wikipedia article is a great way to depress yourself, for example. But today, we depress ourselves a little bit more, by thinking about an article whose cheerful title is “The Math is Bad for MAD“:

Alarmingly, the current modernization of nuclear-missile arsenals by both Russia and China exposes a simple mathematical flaw in the assumptions underlying continued reliance on MAD. Despite our having ~1,400 deployed strategic nuclear warheads, they are postured such that a surprise attack by approximately 70 – 100 Russian or Chinese missiles—a fraction of their total nuclear forces—could soon undermine our “assured” retaliatory capability.

https://www.realcleardefense.com/articles/2021/11/08/the_math_is_bad_for_mad_802552.html

The rest of the article explains how China and Russia could, quite conceivably, undermine the US’ “assured” retaliatory capability. And when I say “quite conceivably”, I am not exaggerating. The authors, Norman Haller and Peter Pry lay out with implacable logic how China and Russia might think through all of the moves in this most dangerous of games, and reach the conclusion that America’s ability to “assure” retaliatory capability is not, in fact, assured. I will not excerpt anything to defend my argument, please read the entire article.

So what, one might ask, is to be done? The authors lay out seven things that America could conceivably do, and evaluate each of them in turn. Again, read the whole thing, it is in your interest to do so. I will, however, excerpt their concluding paragraph:

Finally, U.S. decision-makers should tune out minimalists who ignore the math and advocate replacing the Triad with either a Diad (bombers and submarines only) or, even worse, a Monad (submarines only). Tuned out as well should be MAD proponents who are inattentive to the math and insist that an undefended America is a positive asset.

https://www.realcleardefense.com/articles/2021/11/08/the_math_is_bad_for_mad_802552.html

You may agree with that paragraph, you may not. But you should, as a student of game theory, ask yourself if you can frame your agreement (or otherwise) in game theoretic terms. It is a useful (albeit depressing) exercise in your journey as a student of game theory.

And finally, for your reading pleasure, a further selection of cheer inducing books by one of the authors.

As my favorite bloggers like to say at the end of posts that are as optimistic as this one, have a nice day.

The State of America, Circa 2021

Kevin Drum has an excellent article out on where the United States of America finds itself in the year 2021, in terms of both medium and long term trends along a variety of dimensions. Here are just the first three from “The Good” section:

  1. Income is up for everyone: men, women, Black, white, Hispanic, rich, poor, and middle class. Data from the CBO is here. UPDATE: Confused by this chart? Explanation here.
  2. Poverty is down by five percentage points since the ’70s.
  3. Federal income taxes are lower for practically everyone.

I found it instructive that he chose to go with 28 Things that he found to be Good, but only 5 that were Bad. That, in a meta-sense is worthy of being included as a 29th Good Thing!

Here are the five Bad Things:

  1. The worst trend of the past couple of decades has been a steady deterioration in average health outside of the upper middle class. Life expectancy has stopped increasing; obesity is up; opioid addiction is up; and deaths of despair are up.
  2. The labor force participation rate has been steadily dropping.
  3. The Black-white education gap has been stubbornly resistant to improvement.
  4. Climate change continues unabated.
  5. Political polarization has gotten worse, thanks mostly to Fox News and, more recently, the rise of Trumpism.

(I haven’t formatted both excerpts as quotes because the WordPress editor, best as I can tell, allows you to either format a piece of text as a numbered list, or as a quote, but not both at the same time. They call this the improved editor, and that makes me weep.)

What might India’s list look like? What do you choose to include and exclude in the good, the bad and the ugly, and what does that tell us about both the country we live in, and the biases that we reveal?

If any student reading this is looking to start a YouTube channel around a fun theme, I have, um, a suggestion for you 🙂

Five Links About – Well, What Else?

It doesn’t matter whether you support Trump, Biden – or even Kanye. It doesn’t matter whether you read this at 10 in the morning on the 4th of November 2020, which is when I’ll be scheduling this post, or much later (and that could be hours, days, weeks or months later). I’ve tried to collate five sources that will give you the long view of whatever might happen on this day. With that in mind, here we go:

Ezra Klein speaks about the American divide, and posits that it isn’t about Republicans v Democrats (and read the whole excerpt, and then the whole book!):

Over the past decade, the dreams of democratic theorists everywhere actually came true. The internet made information abundant. The rise of online news gave Americans access to more information — vastly more information, orders of magnitude more information — than they had ever had before. And yet surveys showed we weren’t, on average, any more politically informed. Nor were we any more involved: Voter participation didn’t show a boost from the democratization of political information. Why?

…

But among those with cable and internet access, the difference in political knowledge between those with the highest and lowest interest in cable news was 27 percent. That dwarfed the difference in political knowledge between people with the highest and lowest levels of schooling. “In a high-choice environment, people’s content preferences become better predictors of political learning than even their level of education,” Prior wrote.

…

Misperceptions were particularly high when people were asked to describe the other party. Democrats believed 44 percent of Republicans earned more than $250,000 a year; it’s actually 2 percent. Republicans believed that 38 percent of Democrats were gay, lesbian, or bisexual; the correct answer is about 6 percent. Democrats believed that more than four in 10 Republicans are seniors; in truth, seniors make up about 20 percent of the GOP. Republicans believed that 46 percent of Democrats are black and 44 percent belong to a union; in reality, about 24 percent of Democrats are black and less than 11 percent belong to a union.

…

Here’s the kicker: As the charts below show, the more political media people consumed, the more mistaken they were, in general, about the other party. This is a damning result: The more political media you absorb, the more warped your perspective of the other side becomes.

https://www.vox.com/2020/1/28/21077888/why-were-polarized-media-book-ezra-news

… while Bruno Macaes hypothesizes that the split is between fiction and reality (and interpret that any way you will)

The main binary in American politics is not between left and right, but between fiction and reality. One experiences particular fictions, but at some point they must be revealed as no more than fictions. They must be switched off, in anticipation of new stories.

https://brunomacaes.substack.com/p/biden-the-kill-switch

This article is impossible to excerpt from, but deserves to be read in full, multiple times. Ross Douthat on what the right, the centre and the left learned from four years of Trump.

A worthwhile read on – no matter the outcome, whenever you read this – the Nate Silver/Taleb debate:

Because FiveThirtyEight only predicts probabilities, they do not ever take an absolute stand on an outcome: No ‘skin in the game’ as Taleb would say. This is not, however, something their readers follow suit on. In the public eye, they (FiveThirtyEight) are judged on how many events with forecasted probabilities above and below 50% happened or didn’t respectively (in a binary setting). Or, they (the readers) just pick the highest reported probability as the intended forecast. For example, they were showered with accolades when after, ‘calling 49 of 50 states in the 2008 presidential race correctly’ Nate Silver was placed on Times 100 most influential people list. He should not have accepted the honor if he didn’t call a winner in any of the states!

https://towardsdatascience.com/why-you-should-care-about-the-nate-silver-vs-nassim-taleb-twitter-war-a581dce1f5fc

And hey, take the long view!

In 44 chronological episodes, the “Presidential” podcast takes listeners on an epic historical journey through the personality and legacy of each of the American presidents. Created and hosted by Washington Post reporter Lillian Cunningham, “Presidential” features interviews with the country’s greatest experts on the presidency, including Pulitzer Prize-winning biographers Doris Kearns Goodwin, David McCullough, Jon Meacham and Bob Woodward. Start listening at the very beginning, with the life of George Washington, or jump ahead to any president whose story you want to better understand.

https://www.washingtonpost.com/graphics/business/podcasts/presidential/

Notes on “Why Tech Didn’t Save Us From Covid-19”

The MIT Technology Review recently published an interesting, thought-provoking article with the title in quotes above. It was also a little bit one-sided, but we’ll get to that later.

  • The title itself brought to mind Peter Thiel’s quote about being promised flying cars, and being given 140 characters instead. You may want to make a snarky joke about whether 280 characters counts as progress or not, but the point is well taken. And indeed, reinforced by this quote from David Rotman’s article:
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    “In an age of artificial intelligence, genomic medicine, and self-driving cars, our most effective response to the outbreak has been mass quarantines, a public health technique borrowed from the Middle Ages.”
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  • The article then goes on to highlight at least three separate aspects of why tech has failed us: lesser government support for technology and innovation (particularly in the USA), a sclerotic bureaucracy, and policy-making that is not a) proactive enough b) good at managing risks effectively c) far too focused on short-term issues d) aware of the pitfalls of focusing solely on efficiency.
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    Let’s begin with the last of these points:
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  • ““The pandemic has shone a bright light on just how much US manufacturing capabilities have moved offshore,” says Erica Fuchs, a manufacturing expert at Carnegie Mellon University.”
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    I teach courses in international economics at the Gokhale Institute, and one of the fundamental insights that I think students need to walk away with is the concept of a non-zero sum game. Trade makes both parties better off, and therefore more trade is good, is literally the basic starting block of a course on trade. For an excellent summary of this idea, read this article by Paul Krugman, or watch this TED talk by Matt Ridley.
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    But two basic concepts from economics have come to haunt this rather neat idea. One is scale, and the other is the need to diversify. Both are very closely related.
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  • If, conventional theoretical thinking goes, a firm is able to scale up effectively, it will be able to produce more for cheaper. Yes, it is more complicated than that, but that’s the gist of the benefits of scale. Now, think of all countries as firms, and China is the obvious example of a country that scaled more rapidly than other countries, and was able to produce stuff cheaper than almost anywhere else. And that’s how China became the “manufacturing centre of the world”. The more you import from China, the more they scale (and effectively!). The more they scale, they cheaper they can make stuff. The cheaper stuff gets, the more you have an incentive to import from China. And once the loop is up and running, it becomes difficult to stop.
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  • And that’s a simple explanation for how the world ended up putting all of its eggs in one basket. We failed to diversify, because we focused on efficiency, without worrying about risk. What happens if an increasingly efficient global trading order suddenly breaks down? The price of efficiency is two fold: a) a lack of diversification b) not enough risk mitigation measures that allow one to fall back on domestic production. Which is where most of the world finds itself today. Readjusting global supply chains away from China is necessary, but it will not be easy. Especially because most countries will not want to pursue twin objectives: a) diversification away from China into other potential export powerhouses b) some production to be kept at home, especially in crucial sectors such as healthcare.
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    Scale, and a lack of diversification. There’s a lesson in there for us at the individual level as well, of course. A single minded pursuit of some goal (say money, or career growth) at the cost of other things isn’t necessarily a good idea.
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  • “Why couldn’t the US’s dominant tech industry and large biomedical sector provide these things? It’s tempting to simply blame the Trump administration’s inaction.”
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    The truth is always more complicated than you think, and beware simple explanations, but that being said, you might want to read The Fifth Risk. Here’s a slightly tangential review from The Guardian if you are feeling lazy, and a quote from that article follows:
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    “But we’re actually much more likely to die driving to the shops. The fifth risk is something impossible to conceive of in advance, or to prepare for directly. What matters is having a well-organised government in place to respond to these contingencies when they hit – exactly what the Trump administration has failed to do.”
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    No government, or Big Ol’ Central Planner is perfect, of course (and there’s a very readable book about that topic, or here’s a fascinating review of the same book), but Michael Lewis makes the claim that the Trump administration is rather less than perfect even by our less than exacting standards.
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  • “Any country’s capacity to invent and then deploy the technologies it needs is shaped by public funding and government policies. In the US, public investment in manufacturing, new materials, and vaccines and diagnostics has not been a priority, and there is almost no system of government direction, financial backing, or technical support for many critically important new technologies. Without it, the country was caught flat-footed.”
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    The book to read about this topic, if you ask me, is The Entrepreneurial State, by Mariana Mazzucato. Here’s the Wikipedia link about the book. Governments need to play, she says (and I suspect the author of this article would agree), a more active role in fostering the tech ecosystem in a country. Shades of Studwell, perhaps, but I have a counterargument here:
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  • “Incompetence and a sclerotic bureaucracy” is a phrase David Rotman uses early in the article when speaking about the Center for Disease Control in the USA. I find myself in complete agreement with the adjectives used. Why presume, then, that other government departments are likely any better? The truth, as always, lies somewhere in the middle. You can certainly make the case a la Michael Lewis, that the Trump administration took us to one end of the spectrum – but you should beware equally the other end of it!
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  • “Economists like to measure the impact of innovation in terms of productivity growth, particularly “total factor productivity”—the ability to get more output from the same inputs (such as labor and capital). Productivity growth is what makes advanced nations richer and more prosperous over the long run. For the US as well as most other rich countries, this measure of innovation has been dismal for nearly two decades.”
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    Well, yes, sure. And there is more than a grain of truth to the charge laid above, and not just for America. But keep in mind that measuring TFP is really and truly hard, and I am nowhere close to being convinced that we do a good job of it, even for a country like the USA, forget India. I am writing this post while sitting in my bed, using a laptop that allows me to keep multiple tabs (well over 50 right now) open in a modern browser, while being seamlessly connected to an overwhelming variety of news sources. All this while I listen to a Spotify playlist, and sip on excellent coffee that is made using home delivered Arabic beans. I’ll stop channeling my inner Keynes now, but most of this was not possible, especially at these prices, two decades ago.
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    Progress may not be fast enough for our tastes, sure – but it has been taking place. If you would like to read a book with a take contrarian to mine, try this on for size: The Rise and Fall of American Growth, by Robert Gordon.
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  • “The problem with letting private investment alone drive innovation is that the money is skewed toward the most lucrative markets.”
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    Churchill’s quote about democracy comes to mind!
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  • “In a widely circulated blog post, internet pioneer and Silicon Valley icon Marc Andreessen decried the US’s inability to “build” and produce needed supplies like masks, claiming that “we chose not to have the mechanisms, the factories, the systems to make these things.” The accusation resonated with many: the US, where manufacturing has deteriorated, seemed unable to churn out things like masks and ventilators, while countries with strong and innovative manufacturing sectors, such as China, Japan, Taiwan, and Germany, have fared far better.”
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    Here’s is Andreessen’s post, and also, this is your periodic reminder to read How Asia Works. China, Japan, Taiwan and Germany being up there isn’t a coincidence.
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  • ““The great lesson from the pandemic,” says Suzanne Berger, a political scientist at MIT and an expert on advanced manufacturing, is “how we traded resilience for low-cost and just-in-time production.””
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    Options are easy to teach, but difficult to grasp, and even more difficult to implement. See put, long.
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  • “…they are calling for an immediate ramp-up of public investment in technology, but also for a bigger government role in guiding the direction of technologists’ work. The key will be to spend at least some of the cash in the gigantic US fiscal stimulus bills not just on juicing the economy but on reviving innovation in neglected sectors like advanced manufacturing and boosting the development of promising areas like AI. “We’re going to be spending a great deal of money, so can we use this in a productive way? Without diminishing the enormous suffering that has happened, can we use this as a wake-up call?” asks Harvard’s Henderson.”
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    More participation from the government than is currently happening, but throw also into the mix a more venture-capital-ish approach, and don’t forget prizes! In fact, I found myself wishing midway through the article that the author had explored other options, rather than the government-or-markets binary.
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  • I hope I haven’t comes across as overly critical of the article, and my apologies if I have. That has certainly not been my objective. We rely far too much on the private sector now, that is true – and government can and should play a bigger role than is the case currently. But an extreme position, in either direction, always worries me a little!

Understanding Afghanistan A Little Bit Better

“Here is a game called buzkashi that is played only in Afghanistan and the central Asian steppe. It involves men on horseback competing to snatch a goat carcass off the ground and carry it to each of two designated posts while the other players, riding alongside at full gallop, fight to wrest the goat carcass away. The men play as individuals, each for his own glory. There are no teams. There is no set number of players. The distance between the posts is arbitrary. The field of play has no boundaries or chalk marks. No referee rides alongside to whistle plays dead and none is needed, for there are no fouls. The game is governed and regulated by its own traditions, by the social context and its customs, and by the implicit understandings among the players. If you need the protection of an official rule book, you shouldn’t be playing. Two hundred years ago, buzkashi offered an apt metaphor for Afghan society. The major theme of the country’s history since then has been a contention about whether and how to impose rules on the buzkashi of Afghan society.”

That is an excerpt from an excerpt – the book is called Games Without Rules, and the author, Tamim Ansary, has written a very readable book indeed about the last two centuries or so of Afghanistan’s history.

It has customs, and it has traditions, but it doesn’t have rules, and good luck trying to impose them. The British tried (thrice) as did the Russians and now the Americans, but Afghanistan has proven to be the better of all of them.

Let’s begin with the Russians: why did they invade?

 

One day in October 1979, an American diplomat named Archer K. Blood arrived at Afghanistan’s government headquarters, summoned by the new president, whose ousted predecessor had just been smothered to death with a pillow.

While the Kabul government was a client of the Soviet Union, the new president, Hafizullah Amin, had something else in mind. “I think he wants an improvement in U.S.-Afghan relations,” Mr. Blood wrote in a cable back to Washington. It was possible, he added, that Mr. Amin wanted “a long-range hedge against over-dependence on the Soviet Union.”

Pete Baker in the NYT speaks of recently made available archival history, which essentially reconfirms what seems to have been the popular view all along: the USSR could not afford to let Afghanistan slip away from the Communist world, no matter the cost. And as Prisoners of Geography makes clear, and the NYT article mentions, there was always the tantalizing dream of accessing the Indian Ocean.

By the way, somebody should dig deeper into Archer K. Blood, and maybe write a book about him. There’s one already, but that’s a story for another day.

Well, if the USSR invaded, the USA had to be around, and of course it was:

The supplying of billions of dollars in arms to the Afghan mujahideen militants was one of the CIA’s longest and most expensive covert operations. The CIA provided assistance to the fundamentalist insurgents through the Pakistani secret services, Inter-Services Intelligence (ISI), in a program called Operation Cyclone. At least 3 billion in U.S. dollars were funneled into the country to train and equip troops with weapons. Together with similar programs by Saudi Arabia, Britain’s MI6 and SAS, Egypt, Iran, and the People’s Republic of China, the arms included FIM-43 Redeye, shoulder-fired, antiaircraft weapons that they used against Soviet helicopters. Pakistan’s secret service, Inter-Services Intelligence (ISI), was used as an intermediary for most of these activities to disguise the sources of support for the resistance.

But if you are interested in the how, rather than the what – and if you are interested in public choice – then do read this review, and do watch the movie. Charlie Wilson’s War is a great, great yarn.

 

 

AP Photo, sourced from the Atlantic photo essay credited below.

Powerful photographs that hint at what the chaos of those nine years must have been like, from the Atlantic.

 

 

And finally, from the Guardian comes an article that seeks to give a different take on “ten myths” about Afghanistan, including the glorification of Charlie Wilson:

 

This myth of the 1980s was given new life by George Crile’s 2003 book Charlie Wilson’s War and the 2007 film of the same name, starring Tom Hanks as the loud-mouthed congressman from Texas. Both book and movie claim that Wilson turned the tide of the war by persuading Ronald Reagan to supply the mujahideen with shoulder-fired missiles that could shoot down helicopters. The Stingers certainly forced a shift in Soviet tactics. Helicopter crews switched their operations to night raids since the mujahideen had no night-vision equipment. Pilots made bombing runs at greater height, thereby diminishing the accuracy of the attacks, but the rate of Soviet and Afghan aircraft losses did not change significantly from what it was in the first six years of the war.