Ryan Beck


  • Coronavirus Vaccine Information

    23 Nov 2020

    Trying to get information on the potential coronavirus vaccines has been frustrating. The information I want is never in one place, it’s often vague and usually scattered across multiple links. So I thought I’d take a shot 💉 at providing a more useful resource. The table below has the latest information I could find on the vaccines the US has agreed to purchase. Sources and notes are below the table with more information. The embedded table is a bit hard to navigate so for better full-screen viewing go to this link. I’ll be updating this table occasionally, check the date below the table for when it was last updated.

  • Why Nations Fail

    02 Mar 2020

    I just finished the book Why Nations Fail and really enjoyed it, and I highly recommend it to everyone. Its theory is that institutions are the most important factor in whether a country is prosperous or whether it’s poor and struggling. I think it makes a strong case for capitalism based on inclusive institutions. It uses some really interesting history to argue its case, and while most theories aren’t as strong as their creators make them out to be I do think it seems like a likely explanation for a big part of the difference between rich and poor countries.

    Why Nations Fail is written by two economists, and before publishing the book they wrote a really interesting related paper that I think is worth discussing and learning about. They don’t talk about this paper at all in the book, but it’s directly related to the subject.

    The paper is called “The Colonial Origins of Comparative Development” and it uses an interesting approach to show that colonialism (which directly affected the vast majority of countries on this planet) and the institutions established by it are responsible for why some countries are rich and some are poor today. Their hypothesis is that settler mortality determined whether an area was set up with extractive or inclusive institutions, and that those institutions persist to modern times in most places and determine whether a country is rich or poor. They use an instrumental variables approach to determine if their hypothesis is correct, which is a useful approach for determining causality when you can’t run an experiment.

    A common example of the instrumental variables approach is cigarette taxes and health. Though it seems obvious, it’s hard to prove with evidence that smoking causes bad health because you can’t force a random group of people to start smoking in order to compare their health outcomes to a control group. Since you can’t do that, it leaves open the possibility that maybe people with bad health choose to smoke as a comfort. In other words it’s difficult to determine which way the causality goes. So instead you can choose an instrumental variable, like cigarette taxes, and see if places with high cigarette taxes have better health. An important factor with instrumental variables is the variable can’t be a direct cause of the final result. The tax itself is going to have no direct effect on health outcomes. It’s only through the tax’s effect on the price of cigarettes that the health outcomes change. Another important component is that your causal chain has to be accurate. If places with higher cigarette taxes don’t actually have less smoking then even if their health is better your theory is busted. The causal chain is broken because smoking isn’t less than in other places. So using that instrumental variables approach you can indeed find that places with higher cigarette taxes have less smoking and better health. This is strong evidence of the link between smoking and bad health outcomes, and my understanding is instrumental variable approaches like this are kind of the gold standard in studying things where you can’t run a randomized controlled trial.

    The paper uses settler mortality as their instrumental variable. They theorize that settler mortality determined whether institutions became inclusive or extractive. In South America and Africa settler mortality was high due to disease. So the theory is that instead of settling there and establishing colonies where settlers would come to live, they set up extractive institutions to get slaves and gold. They established institutions based on forced labor, few or no rights, and the colonists using power and violence to rule with an iron fist and extract the wealth for themselves. In contrast, places like North America, New Zealand, and Australia had lower settler mortality. The colonists moved there to live, eventually setting up institutions where they would have political power and rights. The quote below is from the paper, discussing places where extractive institutions were developed.

    This is in sharp contrast to the colonial experience in Latin America during the seventeenth and eighteenth centuries, and in Asia and Africa during the nineteenth and early twentieth centuries. The main objective of the Spanish and the Portuguese colonization was to obtain gold and other valuables from America. Soon after the conquest, the Spanish crown granted rights to land and labor (the encomienda) and set up a complex mercantilist system of monopolies and trade regulations to extract resources from the colonies.

    Europeans developed the slave trade in Africa for similar reasons. Before the mid-nineteenth century, colonial powers were mostly restricted to the African coast and concentrated on monopolizing trade in slaves, gold, and other valuable commodities–witness the names used to describe West African countries: the Gold Coast, the Ivory Coast.

    But wait, couldn’t it be that places with high mortality are poorer just because they have more people dying making it harder to succeed? The paper addresses this point by noting that the mortality of native people was a lot lower than that of settlers. Many Africans develop a resistance to malaria so that while it’s still dangerous in childhood, adults are often not affected by it. Settler mortality often differed drastically from native mortality, and therefore using settler mortality is still valid.

    Something interesting the paper notes about settler awareness of mortality rates is that the early pilgrims who arrived to settle the United States had originally planned to go to Guyana until they learned of the high mortality rates in Guyana. People had enough information to have a good idea which places were deadly and which were safer to settle in.

    They also present evidence to prove their theory that early institutions are hard to change and often still persist to this day, which is why those early institutions are so important for modern day wealth.

    So the causal chain the paper uses is this:

    (Potential) settler mortality –> settlements –> early institutions –> current institutions –> current performance

    They find that their hypothesis is strong and accounts for a good portion of the difference in modern day wealth and performance. Places with high settler mortality are much poorer on average than those with low settler mortality, and they show that the causal chain holds up and that the type of institutions (extractive or inclusive) matters a lot.

    They check their work by controlling for or including a number of other factors like geography, colony origin (British, French, Dutch, etc.), prevalence of malaria, and so on. They find these other factors have little effect on the results and conclude that settler mortality and its effect on institutions is the most important factor.

    Like all theories it’s not perfect, and I know there has been some back and forth between the authors and another economist who criticized the quality of the settler mortality data. Getting accurate data from a few hundred years ago can be difficult. But it does seem to be a pretty convincing theory that seems to me to be respected by the authors’ peers. Even if it doesn’t explain all of the difference between rich and poor countries I think it makes a pretty strong case that the type of institutions a country has are important for its development and that those institutions depend on historical factors and can be difficult to change.

    Link to paper: https://economics.mit.edu/files/4123

  • Technology and Jobs

    13 Feb 2020

    People have been afraid of technology taking jobs for a long time. Apparently in the 1500s William Lee invented a knitting machine and went to Queen Elizabeth to apply for a patent. The story is second or third hand so it’s not a direct quote, but apparently part of her response went something like this:

    “My Lord, I have too much love to my poor people, who obtain their bread by the employment of knitting, to give my money to forward an invention which will tend to their ruin, by depriving them of employment, and thus make them beggars.”

    This isn’t entirely about technology because apparently it was common practice to grant monopolies to well-connected people, kind of like a more powerful patent, and part of her concern was about letting Lee have a monopoly in a time when there was some political opposition to the many monopolies that had been granted. But still it does seem like part of her concern was the technology taking jobs issue.

    Technology doesn’t eliminate jobs and make more people unemployed, it just changes which jobs people do. It also makes us all better off. In the short term we should be concerned about making sure people whose jobs become obsolete are supported and can still live comfortably, but demonizing technology just makes us all worse off in the long run.

    The quote and more info here: http://conversableeconomist.blogspot.com/2019/03/the-story-of-william-lee-and-his.html?m=1

  • Robots and Rubik's Cubes

    15 Oct 2019

    This is some really cool stuff. A group called Open AI has used machine learning to teach a robotic hand to solve a Rubik’s cube. They trained the hand to overcome a variety of interferences with its mechanics as well, such as having some of its fingers tied or having a stuffed giraffe try to move the cube around.

    According to their article it can solve a Rubik’s cube 60% of the time, and it can solve a Rubik’s cube starting at the maximum number of moves from completion (26) 20% of the time. If it drops the cube or times out it’s considered a failure. The movements aren’t programmed in directly, they trained the hand using a simulated model of the hand so that they could do thousands and thousands of iterations under a variety of random environments (different cube sizes, parts of the hand disabled, different finger friction, etc.). Then they applied the resulting program to the actual mechanical hand.

    It’s pretty amazing how much movement this hand has and how it adapts to the “perturbations” they apply. They can randomize a Rubik’s cube and place it in the hand and it’ll work out how to solve it. Check out their article about it for more information, it’s really fascinating and I definitely recommend checking out the part about the perturbations, the videos of that are really cool: https://openai.com/blog/solving-rubiks-cube/

  • Putting a Price on Carbon

    09 Oct 2019

    Hey Democrats, do you want to cut carbon emissions in half in just ten years? Do you want to increase benefits to the least fortunate among us? Do you want to increase development of green technology so it spreads to other countries?

    Hey Republicans, are you concerned that cutting carbon emissions means damaging the economy? Do you believe the vast body of evidence that we should be concerned about our carbon emissions, but don’t think bans on fossil fuels or the many non-environment related provisions in the Green New Deal are the way to do it?

    Well you’re in luck, because a carbon tax is perfect for everyone. Overwhelmingly supported by economists as the free market solution to climate change, a sufficiently sized carbon tax could cut our emissions in half in ten years with only minor impact on the economy. If you refund the revenue from the tax equally back into people’s pockets, the least fortunate get more back than they pay in.

    Here’s a neat tool that you can play with to show what effect certain carbon tax designs might have on carbon emissions and the economy. Seriously, everyone needs to be talking about putting a price on carbon and making sure our representatives know it’s important.