Douglas Adams – The Restaurant at the End of the Universe (Hitchhiker’s Guide to the Galaxy Book 2)

Douglas Adams – The Restaurant at the End of the Universe (Hitchhiker’s Guide to the Galaxy Book 2)

This book is hilarious, and highly recommended. Not quite as famous as the first book, but just as good and very much in the same farcical spirit. Adams’ jokes are constant, yet still often come as a surprise. He had a knack for making the mundane into the epic, and vice versa. Some of the time travel jokes also verge on Abbott and Costello-style humor.

Leo Tolstoy – War and Peace

Leo Tolstoy – War and Peace

This expansive book can move at a glacial pace, though, also like a glacier its motion never stops. His pastoral vignettes are as vivid as a painting. His descriptions of what is going on in each character’s head are masterpieces of empathy, psychology, and self-awareness—or not, depending on the character. There are also multiple contrasts. Not just between the battle scenes and the domestic scenes, but also between Russia and the West, as shown by the contrast between the Moscow and St. Petersburg social scenes. Evolution is another key theme. He characters age, mature, and change over the course of the book. Even their language changes, with Russian increasingly displacing French as the language of choice for the more “authentic” Russian characters. The amoral or otherwise mostly unsympathetic characters such as Helene and her brother Anatole emphasize their Europeanness by lapsing further into French speech even as Napoleon’s army marches further into Russia.

Tolstoy also uses the novel to advance his pastoral, peaceful, agrarian philosophy, contrasting the happy scenes in those settings with the horrors of war and the cynicism of city and court life. He also advances a “great forces” theory of history, against which individuals are nearly powerless. This theory does not hold up well against actual history, but Tolstoy sure makes it poetic.

Pierre, the protagonist, is an especially interesting character. Tolstoy modeled him somewhat after himself. In the beginning, Pierre is a brash youth, not quite comfortable with his large physical size and awkward both physically and socially. He feels the need to interject his opinions into every conversation, as many young people do. After a few years of life experience, and entering into a marriage with Helene that he realizes ahead of time is a mistake, Pierre has a spiritual awakening and pursues Freemasonry with the same youthful zeal as he pursued his previous opinions. But with a little more age and maturity, he becomes calmer and less intense about it. At the same time, he becomes physically more comfortable in his own skin and his own social manner, though his large size still makes him stand out in a crowd. By nature he is more an observer than a participant, but eventually gets dragged into a battle despite not being a soldier, and is taken prisoner and goes on a forced march. He emerges

Tolstoy also astutely portrayed the effect that nearness to celebrities and power can have on people. Especially early in the book, in the battle of Austerlitz, one of the characters is absolutely mesmerized by the czar’s mere presence, to the point of near-religious rapture, completely losing himself in a wash of emotion and love towards a person he has never met, and does not know who he is. The young man is otherwise a sane and decent person, but he comes off every bit as poorly as Tolstoy intended in this scene. As the characters age and get worn down by life and war, their power-worship becomes less pronounced. But it also never completely goes away.

These scenes of celebrity rapture reminded me, of all things, of the scene in Dave Eggers’ A Heartbreaking Work of Staggering Genius where Eggers and his younger brother Topher briefly meet Bill Clinton at some event shortly after they move to San Francisco. Eggers goes into a near-reverie both during the experience and recounting it. Clinton, like Alexander I, was neither particularly bad nor particularly good as far as presidents or tsars go. Neither left much of a footprint on history, and were generally unremarkable—often a good thing in their line of work, but that’s a topic for another time. Such men should not have such effects on otherwise intelligent people, and yet they do.

Two New Studies on Economics of Trade

Our friends at the Property Rights Alliance and the Mercatus Center have just released two new papers that are well worth reading.

First, Philip Thompson and Lorenzo Montanari have compiled a Trade Barrier Index, just released by the Property Rights Alliance. The U.S. currently ranks 54th out of 86 countries. Singapore and Hong Kong rank 1st and 2nd, while India and China bring up the rear at 85th and 86th, respectively. Among our neighbors, Canada weighs in at 10th, while Mexico is 58th. Their index takes into account four policy areas: tariffs, non-tariff barriers, barriers to services, and trade facilitation, such as participating in international trade agreements and the World Trade Organization.

It is highly useful to have a ranking system for making international comparisons. Even with all the tariff hikes of the last two years, it was still surprising and disappointing to see the U.S. ranked as low as 54th. Hopefully future editions of the Trade Barriers Index can add historical data to give greater context, such as how far the United States has fallen in the last two years, and how much the world as a whole has liberalized trade barriers since the end of World War II.

Protectionists are often quick to point to fast-growing China and India’s protectionism as proof that trade barriers can help growth. But liberalization at the margin can have a huge positive impact on growth; going from terrible policies to merely bad ones still counts as improvement, and can still lift people out of poverty. Further liberalization would help even more. China and India have liberalized, imperfectly, along many trade and non-trade policy dimensions post-1978 and post-1991, as Arvind Panagariya points out in great detail in his excellent book Free Trade and Prosperity: How Openness Helps Developing Countries Grow Richer and Combat Poverty. Thompson and Montanari’s Trade Barrier Index allows us to see how countries fare on trade policy compared to other policy areas such as property rights, regulation, and corruption measured by other indices.

Second, the Mercatus Center’s Veronique de Rugy has a much-needed new policy brief, “New Protectionism: Still Protectionism and Bad Economics,” which punctures some common myths about trade. These include:

  • The 19th-century United States grew despite high tariffs, not because of them. Territorial growth and open immigration grew the domestic market for U.S. goods faster than protectionism could shrink their international markets.
  • The East Asian tiger economies didn’t grow because of tariffs or industrial policy. On net, post-war South Korea, Singapore, Hong Kong, and Taiwan were vastly more liberal than before, even accounting for their varying levels of tariffs, export subsidies, and other interventions. It was this net liberalization that paid dividends. As Panagariya points out, growth accelerated once export promotion policies were lessened.
  • U.S. manufacturing output is at near-record levels. At the same time, manufacturing employment is down, and this is a good thing. The goal of manufacturing is not to create jobs, it is to create things that people value. In an ideal world, all that value would be created without anyone having to lift a finger. This will obviously never happen, but when record output comes from ever fewer workers, it’s a step in that direction. The workers whose time and talent are being freed for other, additional uses make the rest of the economy more productive, too. The adjustment is not always painless, but many government policies intended to help can worsen the problem. Legislators should heed Veronique’s advice and tread lightly here.
  • The middle class is indeed shrinking—because people are moving into the upper classes. The proportion of people making between $35,000 and $100,000 per year, inflation-adjusted, has been shrinking for years. This isn’t because incomes are going down. It’s because they’re going up. Declining global trade barriers over the last 75 years are a significant reason why.
  • Subsidies do not make trade fair. China subsidizes many of its exports. This is good for American consumers, but bad for the Chinese people, who are paying to further enrich people who are mostly richer than themselves. A similar dynamic applies in the United States. In order to subsidize or protect one American industry, Washington must penalize American consumers and other American industries, all in order to give foreign buyers a price break. Contra Peter Navarro, trade cannot be fair unless it is free.

Trade protectionists have called on a wide variety of arguments to justify raising barriers, from growth to nostalgia to inequality to fairness. As Veronique points out, none of them hold up to scrutiny.

Philip Thompson and Lorenzo Montanari’s Trade Barrier Index is here. Veronique de Rugy’s “New Protectionism: Still Protectionism and Bad Economics” is here.

This Week in Ridiculous Regulations

The number of new regulations this year passed 2,500 last week, and the Federal Register surpassed 60,000 pages. This week could see big news on everything from a possible trade deal with China to impeachment testimony. Meanwhile, rulemaking agencies published new regulations ranging from handling Florida tomatoes to rural telephone banks.

On to the data:

  • Last week, 58 new final regulations were published in the Federal Register, after 55 the previous week.
  • That’s the equivalent of a new regulation every two hours and 54 minutes.
  • Federal agencies have issued 2,557 final regulations in 2019. At that pace, there will be 2,946 new final regulations. Last year’s total was 3,367 regulations.
  • Last week, agencies published 370 notices, for a total of 18,879 in 2019. At that pace, there will be 21,750 new notices this year. Last year’s total was 21,656.
  • Last week, 1,591 new pages were added to the Federal Register, after 1,685 pages the previous week.
  • The 2019 Federal Register totals 60,881 pages. It is on pace for 70,140 pages. The 2018 total was 68,302 pages. The all-time record adjusted page count (which subtracts skips, jumps, and blank pages) is 96,994, set in 2016.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. Four such rules have been published this year. Five such rules were published in 2018.
  • The running cost tally for 2019’s economically significant regulations currently ranges from savings of $4.39 billion to $4.08 billion, mostly from estimated savings on federal spending. The 2018 total ranges from net costs of $220.1 million to $2.54 billion, depending on discount rates and other assumptions.
  • Agencies have published 59 final rules meeting the broader definition of “significant” so far this year. 2018’s total was 108 significant final rules.
  • So far in 2019, 424 new rules affect small businesses; 20 of them are classified as significant. 2018’s totals were 660 rules affecting small businesses, with 29 of them significant.

Highlights from last week’s new final regulations:

For more data, see Ten Thousand Commandments and follow @10KC and @RegoftheDay on Twitter.

Andrew S. Curran – Diderot and the Art of Thinking Freely

Andrew S. Curran – Diderot and the Art of Thinking Freely

Diderot is best known for editing the Encyclopedie, the first volume of which was published in 1751. Though little-read today, it was one of the most influential works of the Enlightenment. Other than that, most people pay Diderot little mind, aside from noting that he was more vocal about his atheism than most other Enlightenment thinkers, who mostly were, or pretended to be, deists. Curran shows that there was much more to Diderot.

He was a polymath, writing as many as 7,000 articles for the Encyclopedie on a wide variety of subjects. He also wrote plays, dabbled in science, was imprisoned for his beliefs, opposed slavery and advocated for women’s rights, befriended and then fell out with Rousseau, pushed the boundaries of sexual discourse, was a respected art critic, and spent several unhappy months in Russia in the court of Catherine the Great.

After his 1784 death at age 70, Diderot was, ironically, buried in a church. Perhaps fittingly, his grave was disturbed during the French Revolution, and though he is still somewhere in the church, nobody is sure quite where.

Richard Panek – The Trouble with Gravity: Solving the Mystery Beneath Our Feet

Richard Panek – The Trouble with Gravity: Solving the Mystery Beneath Our Feet

More philosophical than I expected. Panek gives an excellent history of gravity, from Aristotle on down through Philoponus, Galileo, Newton, and on down the line. Philoponus, an Egypt-born 6th century Byzantine philosopher, was someone I was unfamiliar with, and it was a treat learning about a new figure in the history of science. He figures prominently early in the story, and more or less came up with the modern understanding of inertia, which he called impetus.

Unusually for his time, Philoponus was not content to rely on Aristotle and Plato’s works as settled fact. He preferred some measure of empiricism. He did not go as far as Francis Bacon’s audaciously titled New Organon (intended to replace Aristotle’s Organon, which was all but an eternal sacred text), but Philoponus’ empiricism was still controversial.

While Panek ably explains the science of gravity at a popular level, he is clearly more interested in the philosophy surrounding it. In particular, if you ask a scientist not what gravity is, but why it exists, they have no choice but to tell you they do not know. That, more than anything, is what interests Panek, and what drove him to write this book.

A good scientist has no problem admitting they do not know something, of course. A lifetime of study and experiment tells even the most brilliant scientist nothing about why, only about the what. Maybe someday we’ll gain that level of knowledge. But after so many attempts from Aristotle to Philoponus through today’s sophisticated experiments, Panek is not optimistic.

Trade Developments on Export-Import Bank and NAFTA/USMCA

America’s trade policy landscape has some big events on the horizon. The House of Representatives will vote next week on Rep. Maxine Waters’ (D-CA) Export-Import Bank reauthorization bill. The Trump administration has signaled opposition to it, making it unlikely to become law. The administration favors Ex-Im renewal, but likely wants it to be more bellicose towards China. As I predicted earlier, Ex-Im’s most likely next step is a short-term reauthorization in the upcoming Continuing Resolution, due November 21st. The agency should be closed, but that is unlikely in the current policy environment. A recent paper of mine lists some second-best reforms that Congress and Ex-Im should pursue.

On Tuesday, November 12th, President Trump is set to give a major speech on trade. He will likely give an update on the first phase of a new trade deal with China. High-level meetings have been taken place, though nothing has so far been formally agreed to. Nothing would be signed until December at the earliest.

European car tariffs are also in play, and may also come up during the speech. President Trump has long wanted to tax European cars on national security grounds, and is due to make a decision on whether to enact such tariffs by November 14th. A new tariff, by raising tensions with an ally Trump needs on China issues, would work against the administration’s efforts to encourage Chinese trade reforms. Further complicating matters, many European cars contain significant amounts of U.S.-made parts, and European carmakers own several U.S. factories employing U.S. workers.

Finally, a vote on the new North American Free Trade Agreement (NAFTA)/United States–Mexico–Canada Agreement (USMCA) still has a chance of happening by the end of the year, though there is no guarantee. The new agreement changes little from the first NAFTA, and 57 percent of its language is taken verbatim from the Trans-Pacific Partnership, which Trump pulled the U.S. out of on his third day in office. Due in part to the low stakes, Democratic opposition has not been forceful. The main holdup right now is organized labor trying to get rent-seeking provisions added to the final agreement. Given the high priority Trump has placed on passing NAFTA/USMCA, they may well succeed.