1. Barry Ritholtz argues that the restrictive policies favoured by taxi cab owners in New York created the likes of Uber,
Consider, the number of licensed cabs was about 16,900 in 1937, when the city's population was more than 1 million lower than it is today. Today, there are fewer medallions than 80 years ago. There have been only about 1,800 new medallions issued since 1996. It is an artificially created monopoly, and monopolies tend to lead to terrible economic behaviors. Just consider one aspect of the appalling level of service on offer. In New York, many taxi drivers change shifts between 5 p.m. and 6 p.m., abandoning the city in the midst of rush hour, returning to the outer boroughs or even New Jersey for driver changes. Let a single drop of rain fall and it is almost impossible -- no, it is impossible -- to find a cab. The cars are often in bad shape, devoid of shock absorbers, and back seats that make me want a shower afterward. Yellow Cabs also have been known to illegally refuse to pick up the hails of African-Americans. Unlike London, where drivers have an almost tour guide-like knowledge of their city, New York cab drivers are often utterly ignorant of the city where they work.
And on Uber's effect on medallion prices,
Bloomberg Businessweek reported that medallion prices, which peaked at $1.3 million in 2013, were already sliding, falling below $900,000 in 2013. Just two years later 2015, prices had fallen another 40 percent. And it got worse: By 2016, the lowest reported price was $250,000. Last year, medallions sold for as little as $241,000. They are still falling. Axios noted a recent transaction that went for just 8 percent of the peak value, or about $100,000. Other cities, such as Chicago, have seen similar declines in medallion prices.
2. David Bell has a scathing critique of Steven Pinker's new book, Enlightenment Now, which is a celebration of the progress made by human civilisation in the post-Enlightenment era thanks, in the main, to the scientific and technological advances that arose from Enlightenment's reasoning and scientific enquiry. He writes,
Enlightenment Now... is a dogmatic book that offers an oversimplified, excessively optimistic vision of human history and a starkly technocratic prescription for the human future. It also gives readers the spectacle of a professor at one of the world’s great universities treating serious thinkers with populist contempt. The genre it most closely resembles, with its breezy style, bite-size chapters, and impressive visuals, is not 18th-century philosophie so much as a genre in which Pinker has had copious experience: the TED Talk... It makes use of selective data, dubious history, and, when all else fails, a contempt for “intellectuals” straight out of Breitbart. Pinker might not have intended the book to do so, but it will bolster the claims of populist politicians against intellectuals and movements for social justice while justifying misguided, coldhearted policy choices in the name of supposedly irrefutable scientific rationality... When it comes to issues like “democracy” and “equal rights,” Pinker seems to believe that progress has occurred almost by itself, as a result of whole populations spontaneously turning more enlightened and tolerant. “There really is a mysterious arc bending toward justice,” he writes. Almost entirely absent from the 576 pages of Enlightenment Now are the social movements that for centuries fought for equal rights, an end to slavery, improved working conditions, a minimum wage, the right to organize, basic social protections, a cleaner environment, and a host of other progressive causes. The arc bending toward justice is no mystery: It bends because people force it to bend.
In some ways, like Nassim Nicholas Taleb and Richard Dawkins, Steven Pinker may be respresenting the era of pop-intellectualism.
3. Ricardo Hausmann makes the point that has been a constant theme of this blog for more than a decade - private participation in infrastructure is best done by way of public finance of construction followed by private concession of operation and maintenance.
But he glosses over the challenge with even the latter. As I blogged here in case of India's roads monetisation, private participation in O&M too is fraught with several risks.
4. I liked this Amartya Sen assessment of Karl Marx's legacy. Sample this,
I would place among the relatively neglected ideas Marx’s highly original concept of “objective illusion,” and related to that, his discussion of “false consciousness”. An objective illusion may arise from what we can see from our particular position — how things look from there (no matter how misleading). Consider the relative sizes of the sun and the moon, and the fact that from the earth they look to be about the same size. But to conclude from this observation that the sun and the moon are in fact of the same size in terms of mass or volume would be mistaken, and yet to deny that they do look to be about the same size from the earth would be a mistake too... The phenomenon of objective illusion helps to explain the widespread tendency of workers in an exploitative society to fail to see that there is any exploitation going on — an example that Marx did much to investigate, in the form of “false consciousness”...
In one of Eric Hobsbawm’s lesser known essays, called “Where Are British Historians Going?”, published in the Marxist Quarterly in 1955, he discussed how the Marxist pointer to the two-way relationship between ideas and material conditions offers very different lessons in the contemporary world than it had in the intellectual world that Marx himself saw around him, where the prevailing focus — for example by Hegel and Hegelians — was very much on highlighting the influence of ideas on material conditions. In contrast, the tendency of dominant schools of history in the mid-twentieth century... had come to embrace a type of materialism that saw human action as being almost entirely motivated by a simple kind of material interest, in particular narrowly defined self-interest. Given this completely different kind of bias (very far removed from the idealist traditions of Hegel and other influential thinkers in Marx’s own time), Hobsbawm argued that a balanced two-way view must demand that analysis in Marxian lines today must particularly emphasise the importance of ideas and their influence on material conditions... To Hobsbawm’s critique, it could be added that the so-called “rational choice theory” (so dominant in recent years in large parts of mainstream economics and political analysis) thrives on a single-minded focus on self-interest as the sole human motivation, thereby missing comprehensively the balance that Marx had argued for.
5. The Economist has a briefing on the global logistics market. This is interesting,
The industry’s backwardness can be seen in its thrall to paperwork. Systems based on e-tickets that say who is entitled to go where, and how, have been mandatory in air-passenger transport for ten years. But half of air cargo still travels with paper “bills of lading” rather than e-tickets. In the world of containerised shipping things are even worse: freight forwarders deal with shipping firms, airlines and hauliers mainly by fax. The cargo on each voyage of the Munich Maersk generates a library of documents—many of which then need to be sent to the ship’s destination by some other means. That secondary shipping is not foolproof, either: vessels and aircraft are often delayed in port because the paperwork has not caught up with the goods that they carry. The cost of all this is enormous. Removing administrative blockages and outdated practices would, by some accounts, do more to boost international trade than eliminating tariffs. The UN reckons that putting all the Asia-Pacific region’s trade-related paperwork online could slash the time it takes to export goods by up to 44%, cut the cost of doing so by up to 31%, and boost exports by as much as $257bn a year.
6. Putting Chinese foreign lending in perspective,
By the end of 2014, just two Chinese policy banks — the China Development Bank and Export-Import Bank of China had outstanding loans to foreign borrowers of nearly $700bn, much the same as the total outstanding lending of the World Bank and six regional development institutions... As a study from the Center for Global Development notes, 23 of the 68 countries potentially eligible for lending under the Belt and Road Initiative are vulnerable to debt distress. In eight of these countries — Pakistan, Djibouti, Maldives, Laos, Mongolia, Montenegro, Tajikistan and Kyrgyzstan — the lending associated with the Belt and Road Initiative will add substantially to the risks.
7. Fiscal incentives to attract businesses is arguably one of the largest examples of wasteful public policy. Eduardo Porter from the example of state and local governments in the US,
Research on a program of corporate tax breaks in Texas found that 85 to 90 percent of the projects benefiting from such incentives would have gone forward without them. Even when tax breaks work and spawn new jobs, local residents gain little if anything... State and local government spending on tax incentives like those offered by Wisconsin and New Jersey has increased sharply since 1990, to about $45 billion in 2015... It amounts to roughly all the money that state governments collect from corporate income taxes. Is this just about opportunistic politicians dipping into state coffers so they can be photographed cutting the ribbon at a spanking new factory? I wouldn’t doubt it. But I would also suggest another, more troublesome motivation: desperation. Fiscal incentives are one of few tools for cities like Racine and Newark to create jobs.
Much the same most likely applies to state governments in India competing with each other to attract investors.
8. International development's mindless obsession with RCTs has crowded out much more valuable ethnographic studies like this by Aditya Dasgupta and Devesh Kapur on the challenges faced by the frontline development bureaucracy in India. Nice documentation of a reality which is deeply internalised by those working within these systems but not amenable to any randomisable study. It also highlights the challenge of implementation validity that I blogged about here.
9. Vietnam may only be the latest example in the well established fact that many countries have achieved US levels of student learning outcomes in Math and Science at very low levels of income.
10. An assessment of the progress made by China's One Belt One Road (OBOR) initiative in the Nikkei Asian Review. In particular, it finds that projects sometimes experience serious delays and resultant cost-escalation, ballooning debts in Pakistan, Sri Lank, Maldives, and Laos, sovereignty concerns, and lack of participation by local workers and local banks.
CityLab has a series of articles on the problems being faced by public buses in US cities. It writes,
CityLab has a series of articles on the problems being faced by public buses in US cities. It writes,
Numbers released last month from the Federal Transit Administration’s National Transit Database show a 2.5 percent decline in total transit ridership from 2016 to 2017, with bus ridership leading the way with a 5 percent drop... Going back to 2014, ridership is down 7 percent, and bus ridership in 2017 was down almost 20 percent from its peak in 2008. During the same nine-year period, the Chicago Transit Authority alone lost more bus riders than all U.S. agencies with growing ridership gained.
And on the role of ride sharing services in this state of affairs,
2018 will be the first year that for-hire vehicle trips (including taxis, Uber, Lyft, and their peers) will outnumber bus trips in the U.S., transportation consultant Bruce Schaller forecasts. Research in New York, San Francisco, Boston, and nationally show that the rapid growth of ride-hailing is adding new vehicles to congested city streets. These services offer shared rides via “pooling” services, but they have seen limited uptake and cannot physically match the people-moving efficiency of city buses.
12. Keith Gessen has a fascinating exploration that rips off the veil shrouding what actually determines the US view of Russia and how its drives American policy towards that country. The essay explores the relationships through the lens of the worldview and prejudices of Russia hands in the Military and State Department who run the bilateral relationship.
The abiding mystery of American policy toward Russia over the past 25 years can be put this way: Each administration has come into office with a stated commitment to improving relations with its former Cold War adversary, and each has failed in remarkably similar ways. The Bill Clinton years ended with a near-catastrophic standoff over Kosovo, the George W. Bush years with the Russian bombing of Georgia and the Obama years with the Russian annexation of Crimea and the hacking operation to influence the American election. Some Russia observers argue that this pattern of failure is a result of Russian intransigence and revisionism. But others believe that the intransigent and unchanging one in the relationship is the United States — that the country has never gotten past the idea that it “won” the Cold War and therefore needs to spread, at all costs, the American way of life.
Sample this about the different world-views of American officials,
The longtime Russia hand Stephen Sestanovich, a veteran of the Reagan and Clinton administrations, says there are two kinds of Russia hands — those who came to Russia through political science and those who came to it through literature. The literature hands, he suggests, sometimes let their emotions get the best of them, while the political-science hands, like Sestanovich, are more cool and collected. Fried, who served in every administration from Carter to Obama, also thinks there are two kinds of Russia hands, though he draws a different dividing line: There are those, like himself, who “put Russia in context, held up against the light of outside standards and consequences.” These people tend to be tough on Russia. And then there are those “who take Russia on its own terms, attractive and wonderful but subject to romanticization.” These people tend to give Russia what Fried would consider a pass.