Month: December 2021

When seeking to justify my career as an editor, I sometimes say that my value-added happens through subtraction: that is, if the final version of the paper as it appears in the Journal of Economic Perspectives makes all the same points, but is 8000 words of text instead of 10,000 words, then I have saved time for readers.  It is fairly standard for me to reduce the lengths of first drafts by 20%, although the trims are sometimes much greater. I once cut a first draft that was over 80 pages to less than 20 pages.

Back in the Dark Ages before word-processing, there was a natural incentive to keep papers short: namely, you (or someone) had to retype each draft. But in a word-processing world, there is a tendency to respond to any given concern by adding either a little or a lot.  The implicit assumptions behind this approach are that longer explanations are more clear, and that the reader’s time has zero cost.

In fact, there may be a cognitive bias in favor of adding, rather than subtracting. In “People systematically overlook subtractive changes,” Gabrielle S. Adams, Benjamin A. Converse,
Andrew H. Hales and Leidy E. Klotz run a series of experiments to see whether people are more prone to add or subtract in different settings (Nature, April 7, 2021).

For example, one set of experiments shows the players an illustration of a miniature golf hole, and asks them for their suggestions for improvements. Notice that this situation allows for either additions or subtractions. However, some players were told explicitly that they could offer additions or subtractions, while others were not offered any cues. Those who were reminded of the possibility of using subtractions were much more likely to do so.

Another set of experiments presented the players with the graphs shown below. The players could click on a white square to turn it green, or a green square to turn it white. The players were supposed to adjust the figure so that it was symmetric both from side to side and from top to bottom. The players were also told that the goal was to create symmetry with as few clicks as possible.

Consider Panel D as one example. One way to create the requested symmetry is to add four green squares to the upper-right, bottom-right, and bottom-left of the figure. another way is to delete the four green squares in the upper-left. Subtraction requires fewer clicks. But unless people are prompted with the idea that subtraction is a possibility, or unless they have multiple chanced to do this kind of puzzle and thus to learn from experience, subtraction is a less likely choice.

Or course, extrapolating from these kinds of experiments to broader contexts is fraught with difficulties. But I’ll just say that in my experience as an editor, there’s clearly a bias toward addition. No author ever says: “I have a really hard time adding to my earlier drafts.” Many authors say: “I have a hard time with trimming my earlier drafts.” But even if longer papers are more clear (a proposition that would need some proving), it remains true that the time of readers is limited. One hopes that a given paper has considerably more readers than authors. If that is true, then time spent on subtraction from a given draft will produce an overall savings of time for the economics profession as a whole,

Of course, there are other possible implications of a bias toward addition. Adams, Converse,
Hales and Klotz write:

As with many heuristics, it is possible that defaulting to a search for additive ideas often serves its users well. However, the tendency to overlook subtraction may be implicated in a variety of costly modern trends, including overburdened minds and schedules, increasing red tape in institutions and humanity’s encroachment on the safe operating
conditions for life on Earth. If people default to adequate additive transformations—without considering comparable (and sometimes superior) subtractive alternatives—they may be missing opportunities to make their lives more fulfilling, their institutions more effective and their planet more liveable.

Perhaps some of the New Year’s resolutions for 2022 should involve not what you can add to your life or your daily routine or your to-do list, but instead what you can subtract from it.

Pretty much every economics major confronts a very similar set of required classes: intro micro, intro macro, intermediate micro, intermediate macro, and econometrics. Some places combine the intro courses, or add a required calculus course, or sometimes a course in accounting. Then econ majors get a few electives and a senior project. When I Iook at those requirements, I find myself thinking that a lot of students come to economics expecting to interact with big policy questions of the day, but until they have survived this gauntlet of required courses, they often don’t get much chance to do so.

This mismatch between what incoming students are hoping and expecting and the requirements of the econ major reminds me of great comment at the start of an edited volume in political science. The topic of the book doesn’t matter for my point, but for the record, the book is Natural right and political right : essays in honor of Harry V. Jaffa, edited by Schramm, Peter W. Schramm and Thomas B. Silver, a compilation of essays published in 1984 as a festschrift for Jaffa’s 65th birthday. Schramm and Silver begin their introduction to the book this way:

Imagine yourself marooned on a desert island with only ten books to read, but in this case books not of your own choosing. Suppose them all to be books written by behavioral political scientists during the last 20 years. Question: Do you think that you would die first of boredom, or of self-inflicted wounds?

This was the situation of many students of undergraduate political science in the 1960’s … Except that we didn’t realize that we were living on a desert island. And although we had been intellectually starved to death, we never realized that we were dead. … As young political scientists, we had had drilled into us the central tenet of positivism: the distinction between facts and values … Qua political scientists, we were islands unto ourselves in the midst of the ferocious and bloody political controversies of the sixties, cut off from the citizen’s perspective on political questions.

Of course, I apply these sentiments to economics. For many undergraduate students with broad interests in the economy and public policy, if surrounded by the required curriculum for economics majors, would they die first of boredom or self-inflicted wounds? Are too many undergrad econ majors (or potential majors who headed somewhere else) being intellectually starved to death, cut off from the citizen’s perspective?

Along similar lines, I think of the famous line from the movie Casablanca, with Humphrey Bogart in the role of Rick Blaine and Claude Raines as Captain Renault.

Captain Renault: And what in heaven’s name brought you to Casablanca?

Rick Blaine quote: My health. I came to Casablanca for the waters.

Captain Renault: The waters? What waters? We’re in the desert.

Rick Blaine: I was misinformed.

One can imagine a parallel exchange between a distraught college student and an adviser:

Adviser: And why in heaven’s name are you majoring in economics?

Student: My intellectual interests and passions. I came to economics to study real-world problems, ranging from poverty and inequality to environmental protection, antitrust, and provision of health care and education.

Advisor: Real-world problem? What real-world problems? Your courseload for the next wo years is introductory micro, introductory macro, intermediate micro, intermediate macro, econometrics, and a mandatory accounting course.

Student: I was misinformed.

Given who I am and what I do, I’m naturally a huge fan of teaching economic theory and terminology. But my sense is that a lot of undergraduate economics majors end up completing the major with a relatively narrow range of knowledge about real-world topics and policies, because there just wasn’t enough time for many electives. So you have econ majors who don’t know much about taxation or Social Security, because they didn’t have room in the schedule for a public finance course; or who don’t know much about environmental economics, or international trade, or antitrust, or health economics, or inequality, or poverty, or infrastructure, and so on and so on–because there was only room in their schedule for a few electives. Of course, graduate students and researchers need to specialize. But the undergraduate curriculum in economics could often be better-connected to the observable economy around us.

The following article was published, as shown, in the Journal of Applied Behavior Analysis in Fall 1974. I discovered it when it was mentioned by Michael S. Weisbach in his recent book The Economist’s Craft: An Introduction to Research, Publishing, and Professional Development.

As the Managing Editor of a professional academic journal, I am strongly committed to putting a lid on the length of articles. I believe that prose which is more crisp is also more easily understood, and that longer articles also tend to be less-read. With that well-known economist sense of humor, I sometimes say that a large part of value-added comes through subtraction. But even for me, this article is a little terse.

In the “Acknowledgements” to his 2010 collection of essays called Studies on Science and the Innovation Process, Nathan Rosenberg wrote: “[M]y long-standing conviction [is] that the most powerful contributions to the rise in measured economic productivity in the last half of the twentieth century was the innovation that we call “`the deadline.'”

His comment was slightly tongue-in-cheek. Rosenberg (who died in 2015) was a lovely man: I knew him a little and worked with him as an editor on a couple of his papers. However, his many virtues did not include being someone who would reliably meet deadlines. Indeed, in the book acknowledgements he was gracefully thanking those who went out of their way to help him meet the publication deadlines.

According to the Oxford English Dictionary, the word “deadline” in the sense of a timeline for completion of a task is a 20th century American coinage. The word “deadline” first appears in the 1860s, with the most common usage referring to a line around prison or a stockade, where those who crossed the line without authorization would be shot. Another usage at about the same time period referred to a “dead line” in relationship to the kind of fishing (called “ledgering”), where the fishing line is slack because the bait sits on the bottom of a river or lake.

In the early 20th century, the word evolves to a printing usage. When printing something at that time, you created a “plate” that fit the size of the printing press. There was a “deadline” around the edge of the plate, and any type that was outside the deadline would not actually show up in print. By 1920, there was apparently a silent movie, unseen by me, called “Deadline at 11,” which involved a plucky newspaper reporter who had to solve the case in time for the newspaper to get the story into print–which suggests that the term in it’s modern meaning of “time limit” was in use before then.

But Rosenberg’s side comment about deadlines is worth considering, nonetheless. Many of us live our professional lives engaging in what behavioral economists have called called “the planning fallacy”–that is, perpetually making plans and setting timelines, underestimating the time that will probably be needed and overcommitting our time, and then scrambling to get the work done as the deadline approaches–and then scrambling further when we miss some of the deadlines, but try not to miss them by too much. Indeed, a modern economy involves many elements of coordination, both inside companies and between companies throughout the chain of production. The complex patterns of coordination don’t happen by chance: they require sequences of activities, mediated by deadlines.

Adam Smith is often treated in popular discussions as a cardboard cut-out caricature of a fundamentalist believer in the superiority of markets, and nothing more. As anyone who has actually read Smith will tell you, such a belief goes well beyond oversimplification or even parody and into the realm of travesty. Here’s a passage from Smith’s first great work, The Moral Sentiments, published in 1759 (that is, 17 years before The Wealth of Nations), in which he diagnoses and discusses a social ill that has only persisted in the centuries since then. Smith wrote:

This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments. That wealth and greatness are often regarded with the respect and admiration which are due only to wisdom and virtue; and that the contempt, of which vice and folly are the only proper objects, is often most unjustly bestowed upon poverty and weakness, has been the complaint of moralists in all ages.

Here, I’ll follow with a more extended quotation for broader contest. The quotation is taken from the edition of The Moral Sentiments available at the ever-useful Library of Economics and Library website. It’s from Section II, Ch. . Again, here’s Smith:

This disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments. That wealth and greatness are often regarded with the respect and admiration which are due only to wisdom and virtue; and that the contempt, of which vice and folly are the only proper objects, is often most unjustly bestowed upon poverty and weakness, has been the complaint of moralists in all ages.

We desire both to be respectable and to be respected. We dread both to be contemptible and to be contemned. But, upon coming into the world, we soon find that wisdom and virtue are by no means the sole objects of respect; nor vice and folly, of contempt. We frequently see the respectful attentions of the world more strongly directed towards the rich and the great, than towards the wise and the virtuous. We see frequently the vices and follies of the powerful much less despised than the poverty and weakness of the innocent. To deserve, to acquire, and to enjoy the respect and admiration of mankind, are the great objects of ambition and emulation. Two different roads are presented to us, equally leading to the attainment of this so much desired object; the one, by the study of wisdom and the practice of virtue; the other, by the acquisition of wealth and greatness. Two different characters are presented to our emulation; the one, of proud ambition and ostentatious avidity. the other, of humble modesty and equitable justice. Two different models, two different pictures, are held out to us, according to which we may fashion our own character and behaviour; the one more gaudy and glittering in its colouring; the other more correct and more exquisitely beautiful in its outline: the one forcing itself upon the notice of every wandering eye; the other, attracting the attention of scarce any body but the most studious and careful observer. They are the wise and the virtuous chiefly, a select, though, I am afraid, but a small party, who are the real and steady admirers of wisdom and virtue. The great mob of mankind are the admirers and worshippers, and, what may seem more extraordinary, most frequently the disinterested admirers and worshippers, of wealth and greatness.

The respect which we feel for wisdom and virtue is, no doubt, different from that which we conceive for wealth and greatness; and it requires no very nice discernment to distinguish the difference. But, notwithstanding this difference, those sentiments bear a very considerable resemblance to one another. In some particular features they are, no doubt, different, but, in the general air of the countenance, they seem to be so very nearly the same, that inattentive observers are very apt to mistake the one for the other. In equal degrees of merit there is scarce any man who does not respect more the rich and the great, than the poor and the humble. With most men the presumption and vanity of the former are much more admired, than the real and solid merit of the latter. … The profligacy of a man of fashion is looked upon with much less contempt and aversion, than that of a man of meaner condition. In the latter, a single transgression of the rules of temperance and propriety, is commonly more resented, than the constant and avowed contempt of them ever is in the former.

In the middling and inferior stations of life, the road to virtue and that to fortune, to such fortune, at least, as men in such stations can reasonably expect to acquire, are, happily in most cases, very nearly the same. In all the middling and inferior professions, real and solid professional abilities, joined to prudent, just, firm, and temperate conduct, can very seldom fail of success. Abilities will even sometimes prevail where the conduct is by no means correct. Either habitual imprudence, however, or injustice, or weakness, or profligacy, will always cloud, and sometimes depress altogether, the most splendid professional abilities. Men in the inferior and middling stations of life, besides, can never be great enough to be above the law, which must generally overawe them into some sort of respect for, at least, the more important rules of justice. The success of such people, too, almost always depends upon the favour and good opinion of their neighbours and equals; and without a tolerably regular conduct these can very seldom be obtained. The good old proverb, therefore, that honesty is the best policy, holds, in such situations, almost always perfectly true. In such situations, therefore, we may generally expect a considerable degree of virtue; and, fortunately for the good morals of society, these are the situations of by far the greater part of mankind.

In the superior stations of life the case is unhappily not always the same. … To attain to this envied situation, the candidates for fortune too frequently abandon the paths of virtue; for unhappily, the road which leads to the one, and that which leads to the other, lie sometimes in very opposite directions. But the ambitious man flatters himself that, in the splendid situation to which he advances, he will have so many means of commanding the respect and admiration of mankind, and will be enabled to act with such superior propriety and grace, that the lustre of his future conduct will entirely cover, or efface, the foulness of the steps by which he arrived at that elevation. In many governments the candidates for the highest stations are above the law; and, if they can attain the object of their ambition, they have no fear of being called to account for the means by which they acquired it. … But, though they should be so lucky as to attain that wished-for greatness, they are always most miserably disappointed in the happiness which they expect to enjoy in it. It is not ease or pleasure, but always honour, of one kind or another, though frequently an honour very ill understood, that the ambitious man really pursues. But the honour of his exalted station appears, both in his own eyes and in those of other people, polluted and defiled by the baseness of the means through which he rose to it.

Charles Dickens wrote what has become one of the iconic stories of Christmas day and Christmas spirit in A Christmas Carol. But of course, the experiences of Ebenezer Scrooge are a story, not a piece of reporting. Here’s a piece by Dickens written for the weekly journal Household Words that he edited from 1850 to 1859. It’s from the issue of January 26, 1856, with his first-person reporting on “A Nightly Scene in London.” Poverty in high-income countries is no longer as ghastly as in Victorian England, but for those who take the time to see it in our own time and place, surely it is ghastly enough. Thus, I repeat this post each year on Christmas day.

Economists might also wince just a bit at how Dickens describes the reaction of some economists to poverty, those who Dickens calls “the unreasonable disciples of a reasonable school.” Dickens writes: “I know that the unreasonable disciples of a reasonable school, demented disciples who push arithmetic and political economy beyond all bounds of sense (not to speak of such a weakness as humanity), and hold them to be all-sufficient for every case, can easily prove that such things ought to be, and that no man has any business to mind them. Without disparaging those indispensable sciences in their sanity, I utterly renounce and abominate them in their insanity …” 

Here’s a fuller passage from Dickens:

A NIGHTLY SCENE IN LONDON

On the fifth of last November, I, the Conductor of this journal, accompanied by a friend well-known to the public, accidentally strayed into Whitechapel. It was a miserable evening; very dark, very muddy, and raining hard.

There are many woful sights in that part of London, and it has been well-known to me in most of its aspects for many years. We had forgotten the mud and rain in slowly walking along and looking about us, when we found ourselves, at eight o’clock, before the Workhouse.

Crouched against the wall of the Workhouse, in the dark street, on the muddy pavement-stones, with the rain raining upon them, were five bundles of rags. They were motionless, and had no resemblance to the human form. Five great beehives, covered with rags— five dead bodies taken out of graves, tied neck and heels, and covered with rags— would have looked like those five bundles upon which the rain rained down in the public street.

“What is this! ” said my companion. “What is this!”

“Some miserable people shut out of the Casual Ward, I think,” said I.

We had stopped before the five ragged mounds, and were quite rooted to the spot by their horrible appearance. Five awful Sphinxes by the wayside, crying to every passer-by, ” Stop and guess! What is to be the end of a state of society that leaves us here!”

As we stood looking at them, a decent working-man, having the appearance of a stone-mason, touched me on the shoulder.

“This is an awful sight, sir,” said he, “in a Christian country!”

“GOD knows it is, my friend,” said I.

“I have often seen it much worse than this, as I have been going home from my work. I have counted fifteen, twenty, five-and-twenty, many a time. It’s a shocking thing to see.”

“A shocking thing, indeed,” said I and my companion together. The man lingered near
us a little while, wished us good-night, and went on.

We should have felt it brutal in us who had a better chance of being heard than the working-man, to leave the thing as it was, so we knocked at the Workhouse Gate. I undertook to be spokesman. The moment the gate was opened by an old pauper, I went in, followed close by my companion. I lost no
time in passing the old porter, for I saw in his watery eye a disposition to shut us out.

“Be so good as to give that card to the master of the Workhouse, and say I shall be glad to speak to him for a moment.”

We were in a kind of covered gateway, and the old porter went across it with the card. Before he had got to a door on our left, a man in a cloak and hat bounced out of it very sharply, as if he were in the nightly habit of being bullied and of returning the compliment.

“Now, gentlemen,” said he in a loud voice, “what do you want here?”

“First,” said I, ” will you do me the favor to look at that card in your hand. Perhaps you may know my name.”

“Yes,” says he, looking at it. ” I know this name.”

“Good. I only want to ask you a plain question in a civil manner, and there is not the least occasion for either of us to be angry. It would be very foolish in me to blame you, and I don’t blame you. I may
find fault with the system you administer, but pray understand that I know you are here to do a duty pointed out to you, and that I have no doubt you do it. Now, I hope you won’t object to tell me what I want to know.”

“No,” said he, quite mollified, and very reasonable, ” not at all. What is it?”

“Do you know that there are five wretched creatures outside?”

“I haven’t seen them, but I dare say there are.”

“Do you doubt that there are?”

“No, not at all. There might be many more.”

”Are they men? Or women?”

“Women, I suppose. Very likely one or two of them were there last night, and the night before last.”

“There all night, do you mean?”

“Very likely.”

My companion and I looked at one another, and the master of the Workhouse added quickly, “Why, Lord bless my soul, what am I to do? What can I do ? The place is full. The place is always full—every night. I must give the preference to women with children, mustn’t I? You wouldn’t have me not do that?”

“Surely not,” said I. “It is a very humane principle, and quite right; and I am glad to hear of it. Don’t forget that I don’t blame you.”

“Well!” said he. And subdued himself again. …

“Just so. I wanted to know no more. You have answered my question civilly and readily, and I am much obliged to you. I have nothing to say against you, but quite the contrary. Good night!”

“Good night, gentlemen!” And out we came again.

We went to the ragged bundle nearest to the Workhouse-door, and I touched it. No movement replying, I gently shook it. The rags began to be slowly stirred within, and by little and little a head was unshrouded. The head of a young woman of three or four and twenty, as I should judge; gaunt with want, and foul with dirt; but not naturally ugly.

“Tell us,” said I, stooping down. “Why are you lying here?”

“Because I can’t get into the Workhouse.”

She spoke in a faint dull way, and had no curiosity or interest left. She looked dreamily at the black sky and the falling rain, but never looked at me or my companion.

“Were you here last night?”

“Yes, All last night. And the night afore too.”

“Do you know any of these others?”

“I know her next but one. She was here last night, and she told me she come out of Essex. I don’t know no more of her.”

“You were here all last night, but you have not been here all day?”

“No. Not all day.”

“Where have you been all day?”

“About the streets.”

”What have you had to eat?”

“Nothing.”

“Come!” said I. “Think a little. You are tired and have been asleep, and don’t quite consider what you are saying to us. You have had something to eat to-day. Come! Think of it!”

“No I haven’t. Nothing but such bits as I could pick up about the market. Why, look at me!”

She bared her neck, and I covered it up again.

“If you had a shilling to get some supper and a lodging, should you know where to get it?”

“Yes. I could do that.”

“For GOD’S sake get it then!”

I put the money into her hand, and she feebly rose up and went away. She never thanked me, never looked at me— melted away into the miserable night, in the strangest manner I ever saw. I have seen many strange things, but not one that has left a deeper impression on my memory than the dull impassive way in which that worn-out heap of misery took that piece of money, and was lost.

One by one I spoke to all the five. In every one, interest and curiosity were as extinct as in the first. They were all dull and languid. No one made any sort of profession or complaint; no one cared to look at me; no one thanked me. When I came to the third, I suppose she saw that my companion
and I glanced, with a new horror upon us, at the two last, who had dropped against each other in their sleep, and were lying like broken images. She said, she believed they were young sisters. These were the only words that were originated among the five.

And now let me close this terrible account with a redeeming and beautiful trait of the poorest of the poor. When we came out of the Workhouse, we had gone across the road to a public house, finding ourselves without silver, to get change for a sovereign. I held the money in my hand while I was speaking to the five apparitions. Our being so engaged, attracted the attention of many people of the very poor sort usual to that place; as we leaned over the mounds of rags, they eagerly leaned over us to see and hear; what I had in my hand, and what I said, and what I did, must have been plain to nearly all the concourse. When the last of the five had got up and faded away, the spectators opened to let us pass; and not one of them, by word, or look, or gesture, begged of us.

Many of the observant faces were quick enough to know that it would have been a relief to us to have got rid of the rest of the money with any hope of doing good with it. But, there was a feeling among them all, that their necessities were not to be placed by the side of such a spectacle; and they opened a way for us in profound silence, and let us go.

My companion wrote to me, next day, that the five ragged bundles had been upon his bed all night. I debated how to add our testimony to that of many other persons who from time to time are impelled to write to the newspapers, by having come upon some shameful and shocking sight of this description. I resolved to write in these pages an exact account of what we had seen, but to wait until after Christmas, in order that there might be no heat or haste. I know that the unreasonable disciples of a reasonable school, demented disciples who push arithmetic and political economy beyond all bounds of sense (not to speak of such a weakness as humanity), and hold them to be all-sufficient for every case, can easily prove that such things ought to be, and that no man has any business to mind them. Without disparaging those indispensable sciences in their sanity, I utterly renounce and abominate them in their insanity; and I address people with a respect for the spirit of the New Testament, who do mind such things, and who think them infamous in our streets.

There’s a sort of parlor game that the economically-minded sometimes play around the Christmas holiday, related to A Christmas Carol, by Charles Dickens. Was Dickens writing his story as an attack on economics, capitalism, and selfishness? After all, his depiction of Ebenezer Scrooge, along with his use of phrases like “decrease the surplus population” and the sarcastic use of “a good man of business” would suggest as much, and a classic example of such an interpretation is here. Or was Dickens just telling a good story with distinct characters? After all, Scrooge is portrayed as an outlier in the business community. The warm portrayal of Mr. Fezziwig certainly opens the possibility that one can be a successful man of business as well as a good employer and a decent human being. And if Scrooge hadn’t saved money, would he have been able to save Tiny Tim?

It’s all a good “talker,” as they say about the topics that get kicked around on radio shows every day. As part of my own holiday break, I republish this essay each year near or on Christmas day.

I went looking for some other perspectives on how Charles Dickens perceived capitalism that were not embedded in a fictional setting. In particular, I checked the weekly journal Household Words, which Dickens edited from 1850 to 1859. Articles in Household Words do not have authors provided. However, Anne Lohrli went through the business and financial records of the publication, which identified the authors and showed who had been paid for each article. The internal records of the journal show that Dickens was the author of this piece from the issue of February 11, 1854, called “On Strike.” (Lohrli’s book is called Household Words: A Weekly Journal 1850-59, conducted by Charles Dickens, University of Toronto Press, 1973. Household Words is freely available on-line at at site hosted by the University of Buckingham, with support from the Leverhulme Trust and other donors.)

The article does not seem especially well-known today, but it is the source of a couple of the most common quotations from Charles Dickens about “political economy,” as the study of economics was usually called at the time. Early in the piece, Dickens wrote: “Political Economy was a great and useful science in its own way and its own place; but … I did not transplant my definition of it from the Common Prayer Book, and make it a great king above all gods.” Later in the article, Dickens wrote: “[P]olitical economy is a mere skeleton unless it has a little human covering and filling out, a little human bloom upon it, and a little human warmth in it.”

But more broadly, the article is of interest because Dickens, telling the story in the first person, takes the position that in thinking about a strike taking place in the town of Preston, one need not take the side either of management or labor. Instead, Dickens writes, one may “be a friend to both,” and feel that the strike is “to be deplored on all accounts.” Of course, the problem with a middle-of-the-road position is that you can end up being hit by ideological traffic going in both directions. But the ability of Dickens to sympathize with people in a wide range of positions is surely part what gives his novels and his world-view such lasting power. The article goes into a fair amount of detail, and can be read on-line, so I will content myself here with a substantial excerpt.

Here’s a portion of the 1854 essay by Dickens:

“ON STRIKE”

Travelling down to Preston a week from this date, I chanced to sit opposite to a very acute, very determined, very emphatic personage, with a stout railway rug so drawn over his chest that he looked as if he were sitting up in bed with his great coat, hat, and gloves on, severely contemplating your humble servant from behind a large blue and grey checked counterpane. In calling him emphatic, I do
not mean that he was warm; he was coldly and bitingly emphatic as a frosty wind is.

“You are going through to Preston, sir?” says he, as soon as we were clear of the
CharPrimrose Hill tunnel.

The receipt of this question was like the receipt of a jerk of the nose; he was so short and sharp.

“Yes.”

“This Preston strike is a nice piece of business!” said the gentleman. “A pretty piece of business!”

“It is very much to be deplored,” said I, “on all accounts.”

“They want to be ground. That’s what they want to bring ’em to their senses,” said the gentleman; whom I had already began to call in my own mind Mr. Snapper, and whom I may as well call by that name here as by any other. *

I deferentially enquired, who wanted to be ground?

“The hands,” said Mr. Snapper. ” The hands on strike, and the hands who help ’em.”

I remarked that if that was all they wanted, they must be a very unreasonable people, for surely they had had a little grinding, one way and another, already. Mr. Snapper eyed me with sternness, and after opening and shutting his leathern-gloved hands several times outside his counterpane, asked me
abruptly, ” Was I a delegate?”

I set Mr. Snapper right on that point, and told him I was no delegate.

“I am glad to hear it,” said Mr. Snapper. “But a friend to the Strike, I believe?”

“Not at all,” said I.

“A friend to the Lock-out?” pursued Mr. Snapper.

“Not in the least,” said I,

Mr. Snapper’s rising opinion of me fell again, and he gave me to understand that a man must either be a friend to the Masters or a friend to the Hands.

“He may be a friend to both,” said I.

Mr. Snapper didn’t see that; there was no medium in the Political Economy of the subject. I retorted on Mr. Snapper, that Political Economy was a great and useful science in its own way and its own place; but that I did not transplant my definition of it from the Common Prayer Book, and make it a great king above all gods. Mr. Snapper tucked himself up as if to keep me off, folded his arms on the top of his counterpane, leaned back and looked out of the window.

“Pray what would you have, sir,” enquire Mr. Snapper, suddenly withdrawing his eyes from the prospect to me, “in the relations between Capital and Labour, but Political Economy?”

I always avoid the stereotyped terms in these discussions as much as I can, for I have observed, in my little way, that they often supply the place of sense and moderation. I therefore took my gentleman up with the words employers and employed, in preference to Capital and Labour.

“I believe,” said I, “that into the relations between employers and employed, as into all the relations of this life, there must enter something of feeling and sentiment; something of mutual explanation, forbearance, and consideration; something which is not to be found in Mr. M’CulIoch’s dictionary, and is not exactly stateable in figures; otherwise those relations are wrong and rotten at the core and will never bear sound fruit.”

Mr. Snapper laughed at me. As I thought I had just as good reason to laugh at Mr. Snapper, I did so, and we were both contented. …

Mr. Snapper had no doubt, after this, that I thought the hands had a right to combine?

“Surely,” said I. ” A perfect right to combine in any lawful manner. The fact of their being able to combine and accustomed to combine may, I can easily conceive, be a protection to them. The blame even of this business is not all on one side. I think the associated Lock-out was a grave error. And
when you Preston masters—”

“I am not a Preston master,” interrupted Mr. Snapper.

“When the respectable combined body of Preston masters,” said I, ” in the beginning of this unhappy difference, laid down the principle that no man should be employed henceforth who belonged to any combination—such as their own—they attempted to carry with a high hand a partial and unfair impossibility, and were obliged to abandon it. This was an unwise proceeding, and the first defeat.”

Mr. Snapper had known, all along, that I was no friend to the masters.

“Pardon me,” said I; ” I am unfeignedly a friend to the masters, and have many friends among them.”

“Yet you think these hands in the right?” quoth Mr. Snapper.

“By no means,” said I; ” I fear they are at present engaged in an unreasonable struggle, wherein they began ill and cannot end well.”

Mr. Snapper, evidently regarding me as neither fish, flesh, nor fowl, begged to know after a pause if he might enquire whether I was going to Preston on business?

Indeed I was going there, in my unbusinesslike manner, I confessed, to look at the strike.

“To look at the strike!” echoed Mr. Snapper fixing his hat on firmly with both hands. “To look at it! Might I ask you now, with what object you are going to look at it?”

“Certainly,” said I. ” I read, even in liberal pages, the hardest Political Economy—of an extraordinary description too sometimes, and certainly not to be found in the books—as the only touchstone of this strike. I see, this very day in a to-morrow’s liberal paper, some astonishing novelties in the politico-economical way, showing how profits and wages have no connexion whatever; coupled with such references to these hands as might be made by a very irascible General to rebels and brigands in arms. Now, if it be the case that some of the highest virtues of the working people still shine through them brighter than ever in their conduct of this mistake of theirs, perhaps the fact may reasonably suggest to me—and to others besides me—that there is some little things wanting in the relations between them and their employers, which neither political economy nor Drum-head proclamation writing will altogether supply, and which we cannot too soon or too temperately unite in trying to
find out.”

Mr. Snapper, after again opening and shutting his gloved hands several times, drew the counterpane higher over his chest, and went to bed in disgust. He got up at Rugby, took himself and counterpane into another carriage, and left me to pursue my journey alone. …

In any aspect in which it can be viewed, this strike and lock-out is a deplorable calamity. In its waste of time, in its waste of a great people’s energy, in its waste of wages, in its waste of wealth that seeks to be employed, in its encroachment on the means of many thousands who are labouring from day to day, in the gulf of separation it hourly deepens between those whose interests must be understood to be identical or must be destroyed, it is a great national affliction. But, at this pass, anger is of no use, starving out is of no use—for what will that do, five years hence, but overshadow all the mills in England with the growth of a bitter remembrance? —political economy is a mere skeleton unless it has a little human covering and filling out, a little human bloom upon it, and a little human warmth in it. Gentlemen are found, in great manufacturing towns, ready enough to extol imbecile mediation with dangerous madmen abroad; can none of them be brought to think of authorised mediation and explanation at home? I do not suppose that such a knotted difficulty as this, is to be at all untangled by a morning-party in the Adelphi; but I would entreat both sides now so miserably opposed, to consider whether there are no men in England above suspicion, to whom they might refer the matters in dispute, with a perfect confidence above all things in the desire of those men to act justly, and in their sincere attachment to their countrymen of every rank and to their country.

Masters right, or men right; masters wrong, or men wrong; both right, or both wrong; there is certain ruin to both in the continuance or frequent revival of this breach. And from the ever-widening circle of their decay, what drop in the social ocean shall be free!

Here is a story of two possible Pacific Rim trade agreements. The idea of a trans-Pacific free trade agreement of some kind had been bubbling around since the early 2000s. By 2016, it had turned into the Trans-Pacific Partnership, with 12 countries signed on as members: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. You could think of it as the North American Free Trade Agreement (NAFTA), which has now morphed into the U.S.-Mexico-Canada Agreement, plus four high-income countries (Australia, Japan, New Zealand, Singapore), a couple of Latin American countries (Chile, Peru), and some growth economies in east Asia (Brunei, Malaysia, Vietnam).

The Trans-Pacific Partnership never went into effect because President Trump promptly withdrew the US signature from the agreement upon assuming office in January 2017. I hold no brief for all the specific details of that trade agreement, but you will notice one main reality about the TPP: China was not a member. The agreement was properly viewed not just as an economic agreement, but also as a way for the United States to of building economic bridges and reassurance with other Pacific Rim countries that might otherwise come under heavy pressure from China.

Of course, this strategy was clear to China, which responded with its own trade agreement, the Regional Comprehensive Economic Partnership, which begins on January 1, 2022. UNCTAD (the United Nations Conference on Trade and Development) has just published a short overview titled “A New Center of Gravity: The Regional Comprehensive Economic
Partnership and its trade effects.”

The RCEP has 15 members. One way to think of the group is that it includes the 10 members of ASEAN (Association of Southeast Asian Nations): Myanmar, Vietnam, the Lao People’s Democratic Republic, Thailand, Cambodia, Malaysia, Philippines, Indonesia, Brunei, and
Singapore. Then add five more countries: China, Korea, Japan, Australia, and New Zealand.

This combination of countries obviously has a lot of overlap with the ill-fated Trans-Pacific Partnership, but it’s entirely centered on Japan and China. It covers a larger share of GDP than any other regional trade agreement.

The UNCTAD report notes:

A key aspect of the RCEP is tariff concessions. The agreement is expected to ultimately eliminate tariffs on more than 90 per cent of goods traded within the bloc. … The implementation period is 20 years, it allows for exemptions for sensitive and strategic sectors, and some distinctions among members. The agreement goes beyond tariff concessions and encompasses other areas of cooperation to foster regional integration among its members. For instance, by setting up a time limit for the release of goods at customs, and by harmonizing rules of origins so as facilitate businesses to take advantage
of the preferential terms of the agreement. RCEP will further advance trade relationships among signatory members, especially for those not previously regulated by any trade agreement. By enhancing market access conditions, largely by reducing tariffs and implementing trade facilitation measures, RCEP countries are a step closer to
becoming a regional trading bloc. … The economic size of the emerging bloc and its trade dynamism will make it a centre of gravity for global trade.

Regional trade agreements have two main effects: trade diversion and trade creation. Trade diversion refers to the pattern that countries inside the group are likely to divert some trade that otherwise would have happened from countries outside the group: for example, countries in the RCEP will become less likely to import from countries outside the group, like the US, and more likely to import from countries inside the group. In addition, the greater ease of trade will create new trade within the group. UNCTAD writes:

Overall, RCEP tariff concessions are expected to increase trade within RCEP by nearly US$ 42 billion, equivalent to almost 2 per cent. Most of the effects would be driven by trade diversion (about US$ 25 billion) away from non-member countries. Trade creation due to lower tariffs would contribute about US$ 17 billion.

Meanwhile, the countries that had been negotiating over the Trans-Pacific Partnership went ahead Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). My sense is that they were hoping the US would sign up again in the future, although President Biden has expressed little interest in doing so. China applied to join that agreement in September 2021. James McBride, Andrew Chatzky, and Anshu Siripurapu of the Council on Foreign Relations have a backgrounder, “What’s Next for the Trans-Pacific Partnership (TPP)?” (last updated September 21, 2021). They write:

For its part, Beijing pushed a separate trade agreement, the Regional Comprehensive Economic Partnership (RCEP), which includes fifteen Asia-Pacific countries but not the United States. It also launched its Belt and Road Initiative, which seeks to develop trade and energy infrastructure throughout South and Central Asia. The RCEP was signed in November 2020 after eight years of negotiations. The deal is not as comprehensive as the TPP: it eliminates fewer tariffs, and doesn’t address services trade, intellectual property, or labor and environmental rules to the same extent. Additionally, India withdrew from the pact, reducing its market size. Still, the RCEP creates one of the world’s largest trade blocs, and analysts say it is another sign, along with the CPTPP, that countries in the region are moving on without the United States. 

It’s not yet clear to me if the new RCEP is more form or substance. As written, the RCEP is clearly not envisioning the very close economic ties of, say, the European Union. Most countries in that area already have fairly extensive trade ties. As the agreement phases in, it will be interesting to watch as countries postpone and delay implementation.

But in this tale of two trade agreements, it remains striking that the United States is choosing to opt out. President Trump or now President Biden could try to use a non-China Trans-Pacific Partnership as a counterweight to China’s growing economic and political influence. Back in 2015, when President Obama was advocating membership in the Trans-Pacific Partnerwhip, he stated:

[W]e have to make sure the United States — and not countries like China — is the one writing this century’s rules for the world’s economy. … We have the chance to open up more markets to goods and services backed by three proud words: Made in America. For the sake of our businesses, and American workers, it’s an opportunity we need to take. But beyond greater access to the world’s fastest-growing region, the agreement will establish enforceable commitments to protect labor, environmental, and other crucial standards that Americans hold dear. Right now, China wants to write the rules for commerce in Asia. If it succeeds, our competitors would be free to ignore basic environmental and labor standards, giving them an unfair advantage over American workers.

Again, I hold no brief for all the details of the TPP. Such agreements often include fine print and details that end up favoring big incumbent firms. But with the United States is choosing to sit on the sidelines and not enter trade agreements like TPP, the rest of the world is moving ahead. The common rules and practices for world trade that result from those negotiations will be governed by the priorities of those countries, and for the trade agreements in Asia, China will have outsized influence over the results. When the US chooses not to play, it also doesn’t get a say.

  

Michael Chui of the McKinsey Global Institute served as interlocutor in “Forward Thinking on globalization and the evolving role of corporate leadership in the 21st century with Matthew Slaughter (December 15, 2021, podcast and edited transcript available).  Here are a few comments that jumped out at me.

On the entry of China and India into global markets

If I go back to when I didn’t have any gray hair and I was graduating and finishing at MIT and coming to Dartmouth, a lot of the research on globalization and labor markets was focused on the NAFTA, the North American Free Trade Agreement, the accession of Mexico into the Canada–US free trade agreement that caused so much political activity in the 1992 presidential election. Ross Perot running for president, getting 19.2 percent of the popular vote in no small part because of proclaiming that there was going to be this “giant sucking sound” if we signed the NAFTA, of losing manufacturing capital and jobs from the United States down to Mexico.

Well, no disrespect against the good people of Mexico, but the Mexico economy and labor force is a rounding error when you’re trying to measure the labor force of China or China plus India, or what has happened in the subsequent 30, 40 years from the NAFTA in terms of the magnitude of shocks to the global economy from after the fall of the Berlin Wall, billions of people around the world wanting to accede into the global economic system, and the flows of capital and people and ideas around that. I think that’s been a big lesson, and I don’t think we’ve quite figured it out in this country.

About Infosys, an India-based company that employs 13,000 Americans at its Indianapolis base and other locations in the US

Infosys was one of these Indian multinationals that really grew from India to provide these outsourcing services to a lot of Western-based multinationals. And yet, like a lot of global multinationals, their competitive advantage evolved over time. They realized as more competitors arose in that, they realized they could create more value for their clients by actually providing a broader range of services that were higher talent, more complementary to what those firms were already doing. …

They’re foreign-based multinationals who establish and expand operations here. And they’ve realized proximity to clients in the US matters. They’ve realized that the risk-taking, the pools of talent, the dynamism of the US economy, some of the deep sources of competitive advantage for the United States, they wanted more access to.

On global supply chains during the pandemic:

Global supply chains, we have known, generate great efficiencies, but that efficiency of lower prices, and costs, wider variety, enabled a lot of firms to have had what was oftentimes called a just-in-time production and inventory management system. That was a finely optimized system. … Ehat we’ve experienced, both on the demand and the supply side amidst the pandemic, are these perturbations to the initial system that have led to wildly nonlinear results.

On the demand side, I think not everybody anticipated that when the pandemic hit, and there was going to need to be this supply shock, a withdrawal of a lot of production of services, nontradable services, that households, either from their own balance sheets or with the unprecedented fiscal supports, would dramatically shift and increase the demand for goods. That surge in demand for goods was unexpected. And then we continue to see supply-side shocks in the global supply chains. … You see, at key nodes in global supply chains, port shutdowns that have been unprecedented because of public health requirements. In certain sovereign nations where one or two COVID cases will shut down ports for 48 or 96 hours—and in the United States and other countries, I think we’ve realized—the fragile optimization around some of the domestic supply chain linkages …

You give me demand shocks, you give me supply shocks, in a very finely optimized global system, and you see shortages, you see rising prices in ways that are oftentimes hard to predict. But if you go back to the academic research, we kind of knew this could be possible. We simply hadn’t had this confluence of demand and supply shocks that the pandemic tragically has brought upon us.

One piece of personal advice

I know the world is fractious and hard, but be a Tigger. Find the optimist, and channel that in yourself and those around you.

David A. Price interviews Edward Glaeser, with the subheading “On urbanization, the future of small towns, and “Yes In My Back Yard” (Econ Focus, Federal Reserve Bank of Richmond, Fourth Quarter 2021, pp. 19-23). Here are a few comments that caught my eye.

On centripetal and centrifugal forces in cities

I see urban growth as almost uniformly a dance between technologies that pull us together and ones that push us apart.

Technologies of the 19th century, like the skyscraper — which is really the combination of a steel frame and an elevator — the streetcar, the steam engine, all of these things enabled the growth of 19th century cities. They brought people together. This was a centripetal age.

In the mid-20th century, we had technologies that were major jumps forward in transportation cost. In transportation technology, like the car, and in technology for transporting ideas and entertainment — television and radio — these were centrifugal forces that basically flattened the Earth and made it easier to live in far-flung suburbs or even rural areas. Those centrifugal technologies … were the backdrop for the exodus of people from dense cities that had been built around streetcars and subways and to suburbs that were built around the car.

But then in the late 20th century and early 21st century, the tides turned again. … We’ve started to see the electronic cottages become a force during the pandemic, and suburbanization has continued, but downtowns are vastly stronger than they were in the 1980s. And I think the primary reason is that globalization and new technologies have radically increased the returns to being smart, and we are a social species that gets smart by being around other smart people. That’s why people are willing to pay so much to be in the heart of Silicon Valley and why they’re willing to pay so much for downtown real estate in Chicago or New York or London.

On the shift to a rental market in single family homes

Traditionally, single-family homes were overwhelmingly owner-occupied in the U.S. More than 85 percent, I think, of homes were owner-occupied. The usual view of the housing economics community was that the agency problems involved in renting them out were huge. There are estimates that suggest that renting out for a year involves a 1 percent decline in the value of the house, or something like that, because the renter just doesn’t treat it properly. By contrast, traditionally more than 85 percent of multi-family housing was rented, at least once you get to over five stories. It’s much easier to manage a multi-unit building when you have one owner. One roof, one owner, because otherwise you’ve got the problems of coordination of the condo association or the co-op board, which can be more fractious.

So those were the things, I think, that were responsible for tying ownership type and structure type so closely together. We are starting to see that break down, which is quite interesting. I don’t know if these buyers have fully internalized their difficulties with the maintenance that goes into rental houses as a long-run issue. Or if technology has changed in such a way that they think that they can actually solve that agency problem and that they can figure out ways to deal with the maintenance costs in some efficient fashion. I’m happy to see an emergence of a healthy rental market in single-family detached housing, but I’m keenly aware of the limitations and difficulties of doing that. So, we’ll have to see how this plays out. I can’t help thinking some part of it just has to be that investors are simply searching for new investment products.

On new models of where workers will live

Take your Silicon Valley startup with 15 smart, hungry young people. Do we truly think in five years these people are just going to be Zooming it in from their suburban bedrooms? That sounds totally implausible to me. That sounds like a totally different work model that will lack all the energy and high quality in-person connections you get from being in the same room as one another.

But on the other hand, are these 15 people going to decide, “Well we all love skiing, we’re tired of paying Silicon Valley prices, should we relocate to Vail?” Or say, “We don’t want to pay taxes, let’s relocate to Austin.” Or, “We want better surfing, let’s relocate to Honolulu.” That feels entirely plausible to me. The technology supports the mobility en masse of these groups to some different area. Places they’re most likely to relocate to are high-amenity places that will appeal to them along one of these dimensions. These would be probably the best index right now of whether or not a place is likely to benefit: Among small towns, is it a skilled place already? Prior to COVID-19, did it do a good job of attracting large numbers of college graduates or people who had advanced degrees?