Saturday, October 28, 2017

North Korea and Munich

The solution to the present problem of North Korea seems obvious–we should have invaded them a little more than a decade ago, just before they developed nuclear weapons. It looks like the modern version of the lesson of Munich: Britain and France should have opposed Hitler early, when he was still weak, instead of going along with the annexation of the Sudetenland. More generally, it is the argument for a foreign policy of figuring out early who are going to be your enemies and opposing them before they get strong enough to be dangerous.

That argument assumes that your nation not only will have an interventionist foreign policy, it will do it right. The U.S. has an interventionist foreign policy, as demonstrated in, among other places, Vietnam, Iraq and Afghanistan. It had one in 2006. It did not do anything serious to prevent North Korea from obtaining the ability to drop a nuclear weapon on the U.S. because the cost of invading North Korea would have been large and immediate, the cost of not doing it more than two elections away. The benefits of an interventionist foreign policy conducted by a government no more competent at it than ours is are much less than the Munich argument implies. 

The costs are much greater. Modern U.S. history provides several striking examples, but I prefer a less familiar one.

A while back, rereading the first volume of Churchill's history of the Second World War, I discovered something interesting. The first time that Hitler attempted to annex Austria he was stopped not by France or Britain but by Italy. Mussolini announced that Italy would not tolerate a German annexation of Austria and made his point by moving Italian divisions into the Brenner pass. Hitler backed down.

What changed? When Italy invaded Abyssinia, England and France announced that that was a very wicked thing to do and took token actions against Italy for doing it. Mussolini concluded that Italy's World War One allies were not his friends and were not very dangerous enemies. The next time Hitler wanted to annex Austria, Mussolini raised no objection.

In Churchill's view, the correct response of the Allies to the Abyssinian invasion was either to forcibly prevent it or to ignore it. The first would have brought down Mussolini's government, the second would have retained him as an ally. Either a non-interventionist policy or a competent interventionist policy would have worked. The incompetent interventionist policy they actually followed gave Hitler his one significant ally.

What, in the absence of a time machine, can now be done about North Korea? The U.S. could, the President hints that it might, launch a full scale attack, probably nuclear as well as conventional. At this point that might not cost very many American civilian lives, since North Korea probably does not yet have the ability to deliver a nuclear weapon to the U.S. mainland, although it soon will. It would result in a very large number of civilian deaths in South Korea and possibly Japan. And in North Korea. It might happen, but I do not think it is likely to. Or should.

The alternative is to recognize that we are back in the world of mutually assured destruction, this time, fortunately, with a weaker opponent. Technological progress has made it possible for a relatively poor country to build intercontinental ballistic missiles with nuclear, perhaps thermonuclear, warheads. We are, however, enormously richer than North Korea--our GDP is more than six hundred times theirs--and considerably more advanced. The strategy that suggests is the one Reagan adopted for dealing with the Soviet Union, a competition in defensive weapons that they could not afford to win. I do not know enough about the current status of anti-missile technology to judge how workable that is, but I do not see any better alternatives.

Keynes on Newton--and some ideas for fantasy.

I have just come across a fascinating piece, a lecture on Newton by Keynes, delivered posthumously by Keynes' brother and largely based on Newton's unpublished papers, apparently totaling about a million words. The central thesis is that Newton's "unscientific" work was just as careful and logical as his scientific work, that he approached alchemy and theology in the same way he approached physics and mathematics. In each case he was trying to make sense of the world by the power of his mind.

Which suggests an interesting idea for a fantasy–I don't know if it has been done. Suppose Newton was right in his exotic work as in his invention of modern physics. In one possible version he is still around, having discovered the alchemical secret of eternal life and faked his own death. In another, a modern scholar reads through the whole body of unpublished work, correctly works out the magical secrets that it contains and that he concealed, and makes use of them.

And in a third, alternate history, version, Newton's friends fail to pull him away from Cambridge into the conventional world of parliament, civil service, and society. He spends the second half of his life as he spent the first, produces breakthroughs in the Hermetic sciences as great as in the natural sciences, and history forks.

Thursday, October 19, 2017

Asking the Wrong Question

A few days ago I spent some seven hours attending a meeting of the San Jose City Council. I was there to speak against a proposed gun control law, but there were other interesting things in the meeting. One of them was a discussion of the Evergreen Senior Homes Initiative, a ballot measure proposed by  developers who want to build 910 units of housing on land currently zoned for industrial use, an idea to which the Mayor is opposed.

His argument is that, despite the references to affordable housing, seniors, and veterans, what the plan actually proposes is a gated community for wealthy residents. He may, for all I know, be correct. It does not follow that building it will not make more affordable housing available for the non-wealthy.

When someone moves into one house he moves out of another, which is then available for someone else to move into. If the development is built and the units are bought by people currently living in San Jose, the net result will be to increase the city's housing stock by almost a thousand units. Doing that will make more housing available in the city and lower its cost. The question the Mayor should be asking, assuming that what he is really interested in is the welfare of the citizens of the city and not merely his ability to control things, is whether the development will draw mostly from current residents or mostly from people who would not otherwise live in the city. Pretty clearly, that question never occurred to him.

The assumption of the Mayor–I think of city planners more generally–is that the way to get affordable housing is to build affordable housing. That is not the only way of getting it. The alternative, very common in the history of U.S. cities in the past, was for poor people to move into housing that had been occupied by, possibly built for, less poor people, vacated when the less poor people moved into newer and better houses. 

The same way poor people get cars.

Sunday, October 15, 2017

Embedded Economics: Help Needed from Conrad Readers

As I have mentioned here before, one of my current writing projects is a collection of short works of literature that have interesting economic insights. In a conversation yesterday at an SSC meetup, someone mentioned a Conrad story that sounded as though it would fit in very nicely. Unfortunately he didn't remember the title. I am not sure if he was misremembering something in "Typhoon," which has a scene similar but less interesting, or if there is another story I have not been able to find.

The story as he remembered it involved a ship in a storm, as does "Typhoon." In his version, the money belonging to the crew was in a strong box that got so shaken that there was no way of distinguishing what belonged to whom. The solution was for the captain to instruct the crew members to each write down how much of their money was in the box. He would then add up the amounts and, if they came to more than was actually in the box, dump the box overboard. It's an ingenious solution, although I can see some practical problems, and would fit neatly into my discussion of mechanisms for making it in the interest of individuals to reveal information. The only thing I now have for that is the story of Solomon and the baby which is much weaker, since it depends on the woman who is pretending the baby is hers not guessing what Solomon is up to. 

In "Typhoon," the money that gets mixed up belongs to the Chinese passengers and the much less interesting solution is an even division.

Does anyone here know of the story in question? Does anyone have another work of literature that illustrates another solution to the general problem? Another example of a short work of literature with an interesting economic insight?

My discussion of the Solomon story and the general issue it illustrates

The current draft of the book, webbed for comments

Monday, October 09, 2017

Gun Control and Homicide Rates

Some recent comment threads on Slate Star Codex, my favorite blog, have dealt with the always lively issue of gun control. One standard argument is "we know gun control laws work because the U.S., which has relatively few restrictions, has a much higher homicide rate than countries such as Canada or the U.K., which have much more restrictions."

One response sometimes offered is that there are other countries, such as Mexico and Brazil, with both restrictive laws and homicide rates much higher than in the U.S. That then gets into the question of what comparisons are more relevant, in what respects the U.K. is more like the U.S. than Brazil is.

An alternative approach, which I think more useful, is to ask whether the difference in homicide rates existed prior to the difference in regulation. The web makes that question much easier to answer than it would have been twenty years ago. 

In the case of the U.K., the answer is pretty clear. According to the Wiki page on Firearms Policy in the U.K., the first restrictive legislation was the pistol act of 1903, but it had little effect:
The Act was more or less ineffective, as anyone wishing to buy a pistol commercially merely had to purchase a licence on demand over the counter from a Post Office before doing so. In addition, it did not regulate private sales of such firearms.
The first  significant restriction was the Firearms Act of 1920. There were additional acts in 1937, 1968, 1988, 1997 and 2006.

The data on Homicide rates per 100,000:

Year U.S.  England&Wales Ratio
1900 1.2 0.96 1.3
1910 4.6 0.81 5.7
1920 6.8 0.83 8.2
1930 8.8 0.75 11.7
*1946 6.4 0.81 7.9
1950 4.6 0.79 5.8
1960 5.1 0.62 8.2
1970 7.9 0.69 11.4
1980 10.2 1.11 9.2
1990 9.4 1.09 8.6
2000 5.5 **1.71 3.2
2010 4.8 1.14 4.2

*No data for the U.K. 1940-1945
**The figure is for the U.K. rather than England and Wales

Looking at those data, it is hard to believe that the reason the U.K. has a lower homicide rate than the U.S. is restrictive legislation.

My point here is not that gun control doesn't (or does) work. I wouldn't be surprised if some restrictions on firearm ownership reduced the homicide rate, but if so, the effect on the U.S./U.K. ratio is lost in the noise. My point is rather that the sort of factoids that show up in this sort of argument, even when they are true, are rarely as solid evidence as those who offer them claim.

This would be a better post if I had a good example on the other side of the same debate. I don't, but perhaps someone reading this can offer one.

European Speaking Trip in April

I have made tentative arrangements for another European trip. At the moment it looks like four or five talks in two weeks, so I could squeeze in a few more, hence this post. Current schedule:

April 14th, Belgrade

April 21st, Sofia

April 28th, Norway

Sometime between those dates possibly Poland, possibly Milan. For additional talks I prefer places reasonably close to places already on my schedule, so as not to spend too much time traveling.

My usual terms are expenses plus whatever honorarium the host thinks appropriate. Defining expenses gets complicated for a multi-talk trip. If one host has offered to fly me to Europe and back, I expect others to provide accommodations and any additional travel expenses, otherwise it's accommodations plus an even division of travel expenses among the hosts.