Did Europe and the United States Become Rich for Different Reasons?

I think that Joel Mokyr’s analysis at Aeon of how Europe became rich while, say, China or India did not is largely nonsense. It has several problems.

The most serious is that Europe didn’t become rich. Parts of Europe became rich but other parts didn’t. The Netherlands became rich. Russia didn’t. Germany became rich. Greece didn’t. Rather than looking at “political fragmentation” look at the differences among the fragments.

But another problem is that his article certainly appears to draw a dividing line sometime in the 17th or 18th century, but the United States isn’t Europe, it became rich, too, and by the 18th century it had already differentiated politically and socially from Europe.

Frankly, I find Jared Diamond’s guns, germs and steel hypothesis better.

If you think that the difference is between Europe and the United States on the one hand and Asia on the other is Christianity, try explaining why the experiences of Protestant Europe, Catholic Europe, and Orthodox Europe were so different. They were all Christian.

What I think happened is that the Netherlands, Britain, and the United States all adopted some very specific economic and social reforms mostly related to banking and money and they became rich. Wherever the Netherlands, Britain, and the United States invested became rich, too. Where they didn’t invest or, worse, disinvested (like Africa) became poor.

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Exports As Percentage of State GDP

For which state do exports comprise the largest percentage of state GDP?

The answer, helpfully supplied by the Census Bureau, is Texas.

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1940s St. Louis

Most of the pictures that my dad took that I’ve reproduced here at The Glittering Eye so far have been family photos—mostly pictures of my mom, my dad’s favorite model in the early days of their marriage. I thought it might be fun to post something that’s a change of pace. You can click on the picture for a larger version. Be warned! It’s big.

The billboards (starting from the center of the picture and moving right) are a Coca Cola ad, a Ford ad, a Griesedieck Bros. beer ad, a Missouri Pacific (?) ad, and a Tip-Top Bread ad.

I believe the picture above to have been taken looking towards midtown St. Louis in the 1940s, probably from Market Street. IIRC the US 40-66 overlap ended on Market Street. Judging by the billboards and the vehicles I’d say 1945 or 1946.

Notice the cobblestones on the cross street.

Many of the buildings that formed the St. Louis skyline in that long ago time no longer exist so I’d say this picture is of at least a little historical significance. From left to right the buildings that I can identify are the Hotel Coronado and the Masonic Temple. I’m not sure what the building under construction is.

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The View from California

Speaking of California, the pie chart above is a simplified representation of the California economy. The source for the data is the Bureau of Economic Analysis. As you can see government forms a very large component of the state’s economy (especially when you include upwards of 50% of health and education as government) as does real estate. Manufacturing is a smaller proportion of the California economy than it is in many states.

Here’s the corresponding pie chart for the U. S. as a whole:

Same source. When you take into account how large California’s economy is (a little less than an eighth of the U. S. economy) and that the U. S. pie chart includes California, it highlights how greatly different California is from the rest of the country.

I don’t believe that demographics is destiny. I don’t even believe that demographics plus economics is destiny. But I do believe that they’re a reasonably good first order approximation.

Consequently, rather than criticizing the political attitudes of Californians or, if you live in California, those of the rest of the country, keep in mind that the view from California is different.

BTW, if you’re wondering what state is most like the U. S. as a whole demographically and economically, that would be Illinois, something that should give you pause. The country as a whole has a much higher percentage black population than California, a higher percentage of whites, and a much lower percentage of Hispanics.

An interesting question would be what state is the most average, the most representative in demographics and economy, excluding California? I don’t know but I’m guessing Missouri.

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The Paradox of California’s Water

There’s an excellent primer on California’s extensive and complicated water system by Chris Austin here. The bottom line is that there’s a colossal mismatch among California’s economy, its population center, and its water.

Southern California gets most of its water from three sources: the State Water Project that transports water from the Lake Oroville reservoir (where the dramatic videos of spillway collapse are coming from) all over the state including the Bay Area and Southern California, the Colorado River aqueduct that transports water from Lake Havasu to Lake Mathews near Riverside, and the Los Angeles Aqueduct that transports water from Mono Lake up by Yosemite to the Cascades facility in Sylmar. These aqueducts vary in age from about a century to 40 years. That maintenance is long overdue should come as no surprise.

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Don’t Bother Proposing Alternatives

I couldn’t help but laugh on reading this article at NRO by Pascal-Emmanuel Gobry proposing alternatives to an increase in the minimum wage. I honestly don’t know why he bothered.

It doesn’t matter if a higher minimum wage is economically inefficient. It doesn’t matter whether it hurts more people than it helps. It doesn’t matter than union officials have decidedly mixed motives in supporting a high minimum wage, e.g. it provides them with opportunities for underbidding the minimum and it would automatically provide raises to union members with minimum wage multiple contracts.

It most especially doesn’t matter that there are much more efficient and effective alternatives. None of them pits state against state the way a higher minimum wage does, none of them has the secondary effects noted above which for some of the supporters of a higher minimum wage are primary objectives rather than secondary, and none of them has a catchy slogan.

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Bloomberg on Investigation

The editors of Bloomberg have come out in support of the investigation I wrote about a few days ago:

One option, as Senator Lindsey Graham has proposed, would be a select committee made up of the top members of other congressional committees relevant to the investigation. Given the scope of the issues involved — including espionage, national security, cybersecurity, foreign relations, economic sanctions and more — that approach makes some sense.

Another option would be an independent commission. Although it would require legislation, such a panel would ensure a public and transparent probe, and it would be empowered to investigate failures and shortcomings across the government, including within Congress itself. The commission that investigated the Sept. 11 terrorist attacks was an exemplar of open bipartisan inquiry and could serve as a model.

Note that the idea of an official formal investigation isn’t partisan or media scalp-hunting. It’s an idea that has been proposed by both Republicans and Democrats.

Would such an investigation convince anyone? Or are all evaluations being performed primarily on the basis of confirmation bias?

For my part I don’t care. If we are to be a society based on laws, we need to follow certain procedures and the most impartial, even-handed investigation possible is one of those procedures.

Congress doesn’t need permission; it should act in creating an independent commission immediately with or without the support of the president.

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Cold War

There are presently two diametrically-opposed explanations of what’s going on in Washington today. One explanation is that President Trump won the election through collusion with the Russians and is a traitorous, incompetent criminal. That explanation is epitomized by E. J. Dionne’s column in the Washington Post today:

NEW YORK — Let’s not mumble or whisper about the central issue facing our country: What is this democratic nation to do when the man serving as president of the United States plainly has no business being president of the United States?

The Michael Flynn fiasco was the entirely predictable product of the indiscipline, deceit, incompetence and moral indifference that characterize Donald Trump’s approach to leadership.

Even worse, Trump’s loyalties are now in doubt. Questions about his relationship with Vladimir Putin and Russia will not go away, even if congressional Republicans try to slow-walk a transparent investigation into what ties Trump has with Putin’s Russia — and who on his campaign did what, and when, with Russian intelligence officials and diplomats.

According to this view Trump’s chickens are coming home to roost and he should resign or be impeached sooner rather than later.

The opposing view is that Trump is being subjected to a relentless campaign of disinformation, opposition, and subversion by Democrats, journalists, and employees of federal agencies (including the intelligence agencies). That view is exemplified in this article by Richard Pollock at The Daily Caller:

The talk within the tight-knit community of retired intelligence officers was that Flynn’s sacking was a result of intelligence insiders at the CIA, NSA and National Security Council using a sophisticated “disinformation campaign” to create a crisis atmosphere. The former intel officers say the tactics hurled against Flynn over the last few months were the type of high profile hard-ball accusations previously reserved for top figures in enemy states, not for White House officials.

“This was a hit job,” charged retired Col. James Williamson, a 32-year Special Forces veteran who coordinated his operations with the intelligence community.

Noting the Obama administration first tried to silence Flynn in 2014 when the former president fired him as director of the Defense Intelligence Agency, Williamson called Monday’s resignation, “stage Two of ‘Kill Mike Flynn.”

Former intelligence officials who understand spy craft say Flynn’s resignation had everything to do with a “disinformation campaign” and little to do with the December phone conversation he had with the Russian Ambassador Sergey Kislyak.

They charge officials from America’s top spy counsels leaked classified government intercepts of Flynn and President Trump’s conversations with world leaders and had “cutouts” — friendly civilians not associated with the agency — to distribute them to reporters in a coordinated fashion.

Can these views be reconciled? I don’t see how. What I believe we’re seeing is a low-level civil war—a cold war, played out domestically. Something that needs to be recognized is that ordinary Americans don’t see things quite the same as activists, news junkies, and politicians do. Based on the RealClearPolitics composite index of polls, President Trump’s approval rating is actually better than it was on election day. That may explain why he’s reaching out so supporters.

I recognize that my view is distinctly a minority view (possibly a minority of one) but I support the creation of a bipartisan commission to investigate the emerging allegations against President Trump with the charter of making as much public as it can as quickly as it can. That’s based on the rubric of more light and less heat.

My concern is that heat could turn a cold war into a hot one.

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Concentration Is Bad

Speaking of corroborating evidence, this article at Bloomberg by Noah Smith supports something I’ve been saying for some time—monopolies might be a contributing factor to income inequality:

There’s now evidence that market concentration could also be hurting workers, by decreasing the share of national income that they receive. It’s probably making inequality worse. I also suspect that creeping monopoly will prove to be one of the main reasons for decreasing business dynamism. And it could even be a contributor to slow productivity growth. In other words, many of the diseases in our economy can probably be traced, at least in part, to the problem of market concentration. And it’s getting worse…

The more human-scale things are the more conducive they are to human well-being. That’s true of all organizations not just businesses. Economies of scale are mostly over-rated. I learned that a long time ago when I accidentally received an invoice sent to one of the biggest buyers in the world in the mail and learned that they were paying the same thing as I was.

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Deep Carbon

I found this article at Science Direct very interesting:

We report from converted seismic waves, a pervasive seismically anomalous layer above the transition zone beneath the western US. The layer, characterized by an average shear wave speed reduction of 1.6%, spans over an area of ∼1.8×106 km2∼1.8×106 km2 with thicknesses varying between 25 and 70 km. The location of the layer correlates with the present location of a segment of the Farallon plate. This spatial correlation and the sharp seismic signal atop of the layer indicate that the layer is caused by compositional heterogeneity. Analysis of the seismic signature reveals that the compositional heterogeneity can be ascribed to a small volume of partial melt (0.5 ± 0.2 vol% on average). This article presents the first high resolution map of the melt present within the layer. Despite spatial variations in temperature, the calculated melt volume fraction correlates strongly with the amplitude of P–S conversion throughout the region. Comparing the values of temperature calculated from the seismic signal with available petrological constraints, we infer that melting in the layer is caused by release of volatiles from the subducted Farallon slab. This partially molten zone beneath the western US can sequester at least 1.2×1017 kg1.2×1017 kg of volatiles, and can act as a large regional reservoir of volatile species such as H or C.

Basically, what’s that saying is there’s a huge pool of something-or-other deep beneath the western United States. Could be hydrogen. Could be carbon. Could be methane or any number of other alternatives.

There are all sorts of possible reactions to that news. My immediate reaction was that it might present some great new opportunities for testing the abiogenic theory of the origins of petroleum. I know that deep deposits of this sort are one of the bits of evidence offered in support of the theory. I always thought it was a bit wacky but who knows?

Hat tip: the Daily Mail

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