611666 (scroll down to Over 42). 10-0-110-0. 444-3. 275(a/o). I can translate those numbers for you: “ouch”. England are completely hammering Pakistan in the one-dayers, and one feels the need to check if this is really England playing one day cricket or if someone has genetically spliced Shahid Afridi with Virender Sehwag and put it in a dark blue uniform. Anyway, having completely lost 70% of my readership with that preamble, on to the comparatively comprehensible world of economics.
1. I know Ezra Klein likes the clickbait titles, but “We can reduce extreme global poverty by three-fourths — right now”? No, we can’t. Let me just rephrase that for clarity: NO, WE CAN’T. Andy Sumner crunches the numbers and finds that there are a number of high-poverty countries which have GDP high enough to just redistribute all poverty away in a single go. He also says that this wouldn’t be a disaster, since the IMF said that redistribution is good for growth. His main point is that poverty is political problem, which I agree with, but this is only really a step up from those Oxfam killer stats about how much we spend on ice cream compared to the cost of free education for the globe. Let’s say we redistribute to eliminate all poverty today. What about tomorrow? The IMF paper finds that some redistribution, achieved indirectly, is good for growth – that’s very different to the implication that a one-off total redistribution would have no effect on growth. It implies that inequality has emerged solely from unwillingness to redistribute, rather than economic and political characteristics that are inherent in the structure of production. Andy’s right that poverty is largely political, but it’s not primarily redistributive politics that creates it, it’s the politics around the kind of growth and the kind of economic model pursued. And cash transfers do not solve this.
2. And moving swiftly on to a piece that I really did like: Tim Harford on whether Universities actually add any value to the world (through their education and certification function). It’s a great piece – like Tim, my gut tells me that universities are pretty good things. But I also can’t help but see the degree inflation around me (and the number of jobs which now appear to require a doctorate, few of which actually require any advanced techniques) and think that it’s become a signalling arms race. It used to be that an undergrad degree was a powerful signal in the job market. That’s not the case anymore, so people need to spend ever longer in the system, just to ‘prove’ they’ll be worth hiring.
3. I’m no libertarian, but this Café Hayek piece is fantastic. The number of times I’ve heard people complain that pay for nurses is low compared to pay for actors is amazing. Don Bodreaux points out this is a sign that society is working, not failing: we produce loads and loads of nurses, and relatively few Tom Hiddlestones. I’m ok with that outcome. (However, I would like to see a substantial increase in the supply of Taylor Swift).
4. This is a great blog by Justin Sandefur, about the extent to which informing policy makers about public preferences can change their opinions on policy issues. What makes it so good is that not only does it explain and visualise the results clearly, it’s also completely explicit about the shortcomings of the research it’s based on. That said, this was one of the more interesting research ideas I’ve seen for a while, and I hope it’s tried again in different places.
5. Banking services are (or can be) a great thing for firms in developing countries. For the poor? Not so much – many of the unbanked appear not to want to be banked. It can be more hassle than it’s worth, at least until totally different products and access strategies are designed.
6. Every podcast from Planet Money’s five-part series on oil. They bought oil, they refined it, they sold it and told lots of great stories and slipped in some economics on the way. Really recommended.
7. Ok, I’m going to miss the point here, but I can’t believe Lant Pritchett is an introvert – I’ve always assumed that charismatic speakers are extroverts, and Lant is definitely that. Oh yeah, and he doesn’t seem to be a big Jim Kim fan and has come up with five female alternatives.
8. Lastly, Anthony Jay, writer of Yes, Minister (one of my favourite-ever TV shows) passed away recently. One of the obits threw up this incredible fact: the show started as a way of popularising public choice theory. Next I’ll be hearing that Rumpole was simply a vehicle for the popularisation of cheap red wine. I’ll leave you with my favourite Yes, Prime Minister quotes: “Government is not a team. It is a loose confederacy of warring tribes.”
Have a great weekend, everyone!