Brad DeLong: Worthy reads on equitable growth, August 24–30, 2018

Worthy reads from Equitable Growth:

  1. IMHO, Robert Manduca’s new column for Equitable Growth is closely akin to William Julius Wilson’s “the declining significance of race.” Read “How rising U.S. income inequality exacerbates racial economic disparities,” in which Manduca writes: “In 1968 … median African American family income was 57 percent of the median white American family income. In 2016, the ratio was 56 percent. The utter lack of progress is striking.”
  2. Read Delaney Crampton’s “Why accessibility to broadband matters in reducing economic inequality in the United States,” in which he writes: “a strong correlation between household income and in-home connectivity [has been found]—a pattern that persists across both rural and economically depressed urban communities.” How much of this correlation is causal? And how much is associational? I do not think we really know, in spite of studies of the build-out of broadband in France. The United States is a very different country. Nevertheless, I, for one, think that it is long past time to put universal broadband in the same bucket as basic sanitation and rural electrification—as something that is part of the citizens’ share of being an American.
  3. I’m very excited to see that “The Washington Center for Equitable Growth applauds the introduction of the ‘Measuring Real Income Growth Act of 2018’” by Sens. Chuck Schumer (D-NY) and Martin Heinrich (D-NM). Heather Boushey and I have written extensively about the need to track growth not just for the U.S. economy as a whole but also for Americans at every point along the income curve, as have Heather and Austin Clemens, most extensively in their report earlier this year titled “Disaggregating growth.”
  4. Equitable Growth alumnus Nick Bunker reminds us of this Equitable Growth working paper from a year and a half ago by Emmanuel Saez, Thomas Piketty, and Gabriel Zucman, “Economic growth in the United States: A tale of two countries,” in which they write: “We combine tax, survey, and national accounts data to build a new series on the distribution of national income.”

Worthy reads not from Equitable Growth:

  1. Even though “The IT revolution and the globalization of R&D” is written by another member of the J. Bradford Alliance, I am not sure about their view that “when U.S. multinationals are able to import talent or export R&D work, this reinforces U.S. technological leadership.” That is not how I read Shenzhen, at least. Read Lee Branstetter, Britta Glennon, and J. Bradford Jensen’s column, in which they observe: “U.S. firms have begun shifting R&D investment towards nontraditional destinations such as China, India, and Israel.”
  2. Read Susan Dynarski, “For better learning in college lectures, lay down the laptop and pick up a pen,” in which she writes: “When college students use computers or tablets during lecture, they learn less and earn worse grades. The evidence consists of a series of randomized trials, in both college classrooms and controlled laboratory settings.” This may, to some degree, be the growing pains of new technology. There were people who strongly objected to printing on the grounds that the only way to truly “grok” a book was to copy it out, word-for-word by hand. In their view, printing produced a bunch of shallow intellectual “poseurs” who would have only a surface and inadequate knowledge of the books that they had not really read but only skimmed. And Socrates’ attitude toward writing as a greatly inferior “simulacrum and inadequate mimesis” that could not create the true knowledge obtained through real dialogue is well-known. Nevertheless, we believe that we have managed to adapt to printing and indeed to the creation of manuscripts rather than just the oldest oral master-and-apprentice intellectual technologies. Perhaps we will find different things to be true once we have trained our information-technology networks to be our servants as trusted information intermediaries and intellectual force multipliers, rather than (as they now are) the servants of the advertisers that pay them and thus that try to glue our eyeballs and attention to screens—whether or not having our eyeballs and attention so-glued helps us become more like our best selves. But as of now, the empirical evidence has become overwhelming.
  3. In “Is America Encouraging the Wrong Kind of Entrepreneurship?” Robert E. Litan and Ian Hathaway examine “William Baumol’s … idea … that may help explain America’s productivity slump. Baumol’s writing raises the possibility that U.S. productivity is low because would-be entrepreneurs are focused on the wrong kind of work.”
  4. Isabel Z. Martínez, Michael Siegenthaler, and Emmanuel Saez write in “The Myth of Intertemporal Labour Supply Substitution” that “macroeconomists tend to assume that people work more when their wages are temporarily higher.”
  5. Will Wilkinson observes in “‘Socialism’ vs. ‘capitalism’ is a false dichotomy” what the left and the right get wrong about the debate. He writes: “We need go-go capitalism to afford a generous welfare state.”
  6. I disagree with Simon Wren Lewis in “The biggest economic policy mistake of the last decade, and it had nothing to do with academic economists,” where he claims that “Alesina or Rogoff featured so much in … austerity … not because they were influential, but because they were useful to provide some intellectual credibility to the policy that politicians of the right wanted to pursue.” It’s not one or the other. They gave credibility. And because they gave credibility, the media-political machine made them influential. And their influence was such that they neutralized the rest of us, who understood what was going on and were desperately trying to stop it.
  7. Justin Wolfers writes in “Money Really Does Lead to a More Satisfying Life” that “lottery winners said they were substantially more satisfied with their lives than lottery losers [and that] these effects are remarkably durable … still evident up to two decades after a big win.”
  8. Justin Fox notes in “Why German Corporate Boards Include Workers for Co-Determination” that “one of the world’s most successful capitalist nations, Germany, currently requires 50 percent employee representation on the supervisory boards of large corporations, and that most countries in the European Union now also encourage or require some such form of employee ‘co-determination.’”

August 30, 2018


Brad DeLong



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