Even though it’s been almost a week and Sri Lanka are playing in the cricket right now (and – dare I say it – looking pretty darn competent), this week’s preamble is all about The Greatest. Last Saturday, after hearing the news, I re-watched When We Were Kings and read all the tributes I could. LitHub did a nice summary of the best books about him and Vox did a rundown of the best publically available writing. For the fans of the actual boxing, here’s his fight against Cleveland Williams, probably his finest performance, at the peak of his physical abilities. My own favourite story about him: When I worked in Zanzibar, a portly, middle-aged man came into my office looking for my (absent) office-mate. He introduced himself as the Manager of the Zanzibar Ports Authority, and asked me to say he had come in to say hello. I asked him what his name was, and he flashed me an enormous smile and started swiftly dancing around the office, shadowboxing with dizzying speed, before withdrawing a business card and announcing himself as Mohamed Ali. I’ve always wondered if he did that every time someone asked him his name. I’d be tempted to.
1. “Today on the show, we meet the man who stole my door and who gave us the hell that is the open office.” One of the great joys of working in the Chief Economist’s Office is that we occupy an odd little corner of the building which is difficult to find and relatively small. As a result, though it’s technically an open plan, it feels more like a small shared office space. Planet Money look at the invention of the open plan, and finds the architect responsible for it (transcript). Almost everyone hates the open plan (Shalom Auslander describes it as like ‘being inside a migraine’), though in some contexts it is beneficial to team-level output, but they nail the appeal: it looks cool, and it’s cheaper.
2. I keep banging on about the importance of raising the returns to work in developing countries. The problem is not that people don’t have enough work, nor that they aren’t enterprising enough or anything like that – it’s that all the structures that allow one to do well and maximise welfare by selling or using your labour are sub-optimal. A nice new paper reinforces this deeply held prior: people in developing countries actually work more than their counterparts in rich countries, and do so for far, far lower returns. The global incomes gap is thus even larger when we account for hours worked.
3. Speaking of the global incomes gap, here’s Branko Milanovic reviewing a book with a new(ish) explanation of the Great Divergence of the west (and specifically Britain) from the rest of the world, focusing on the role of the interventionist state. The book also goes on an eminent academic killing spree, attacking Jared Diamond, Greg Clark, Acemoglu and Robinson, Kenneth Pomeranz and David Landes. He also made me guffaw by describing Andre Gunder Frank’s ‘usual lack of nuance and overdose of self-assurance’.
4. Two bits of good thinking on migration from CGD. First Hannah Post and Owen Barder carefully look at the numbers of ‘refugees’ and ‘asylum seekers’ in Europe and find that rhetoric and reality do not necessarily match; and then Lee goes on a longer version of his earlier rant against the ‘worst use of aid money ever’: “Whilst the EU apparently trusts the government of Sudan to respect the human rights of foreign refugees, the same Sudanese government is simultaneously bombarding its own citizens…”
5. “The new approach to economics should include two different kinds of theories: normative models that characterize the optimal solution to specific problems and descriptive models that capture how humans actually behave.” Richard Thaler on the state of modern economics and the direction it needs to take, arguing that everything has a behavioural element, and that the sooner we internalise that into mainstream economics, the sooner there ceases to be a separate discipline of ‘behavioural economics’.
6. I don’t want to be a total downer about John Oliver buying loads of debt and then forgiving it, but as Tyler Cowen might say: solve for the equilibrium. That’s not to say I think the current situation is fine, either – with vulture funds buying loads of debt cheaply to try and squeeze blood from people, I don’t think the direction those incentives push us is any better. Rather, I think that grand gestures are just that: nothing more than a gesture. The problem is financial education, understanding of risk, and the need for a really open discussion about how far we are willing to trade off risk and return among the poor, and how to mitigate or insure risks.
7. And Lastly, after the musical end to last week’s links, someone sent me this gem: A North Korean pop group singing their great hit, Let’s Support our Supreme Commander with Arms.
Have a great weekend everyone!