Walker

Walker joined Difficult Run as an editor in August 2013. He graduated from the University of North Texas with an MBA in Strategic Management and a BBA in Organizational Behavior and Human Resource Management. He's currently a grad student in Government at Johns Hopkins University. He has been published in SquareTwo, BYU Studies Quarterly, Dialogue, Graziadio Business Review, and Economic Affairs. He also contributed to Julie Smith's (ed.) 'As Iron Sharpens Iron: Listening to the Various Voices of Scripture'. His other online writing can be found at Worlds Without End and Times & Seasons. He lives in Denton, Texas, with his wife.

Global Inequality Is Falling: More Evidence

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The Economist reported on a new study that finds that the “Gini coefficient of global inequality fell from 69 in 2003 to 65 in 2013. And median income rose from about $1,000 to $2,000 in just ten years.” The economists and authors of the study estimate that it will continue to plummet to 61 by 2035. As for annual income, the abstract states, “The number of people earning between US$1,144 and US$3,252 per year in 2013 prices in purchasing power parity (PPP) terms will increase by around 500 million, with the largest gains in Sub-Saharan Africa and India; those earning between US$3,252 and US$8,874 per year in 2013 prices will increase by almost 1 billion, with the largest gains in India and Sub-Saharan Africa; and those earning more than US$8,874 per year will increase by 1.2 billion, with the largest gains in China and the advanced economies.”

I’ve written about global inequality here before. Nathaniel and I have even published on the subject. This is utterly fantastic news.

New Study: Inequality and Innovation Trade-Off

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Economist Stan Veuger has an article in U.S. News on the costs of redistribution. “Traditionally more common,” he writes, “but recently under sustained assault from the left, is the view that there are tough trade-offs to be made, and that while there may be a role for redistribution, it comes at a cost: It reduces innovation and growth. A new research paper…provides new theoretical and empirical support for this view.” He explains the theory:

The capitalists receive income from the firms they own that derives from their proprietary cutting-edge technology if they recently innovated or from generally available technology if it’s been a while since they or their parents did. The workers either receive wages or become capitalists themselves by innovating and replacing the incumbents. Mark-ups on products and services based on cutting-edge technology are higher than from generally available technology, so the more innovation there is, the more income goes to the capitalists. Of course, the more productive research and development there is, the more often new entrepreneurs join the capitalist class, and the higher social mobility is – unless barriers to entry keep entrepreneurs out. And if research and development is more productive, the economy grows faster, ultimately benefiting workers as well.

Now, what does the evidence show:

To measure innovation, they look at patents granted per capita, between 1975 and 2010, in all 50 states and D.C. When they relate that measure to year-by-year measures of the income share earned by the top 1 percent, they find what their model predicts: More innovative states are also more unequal. And that’s not just because the wealthy few file more patent applications. They exploit variation in innovation driven by whether states have members of Congress on Appropriations Committees and by innovation in other states that they interact with a lot to show that such quasi-experimental variation in innovativeness, not driven by the mere presence of wealth, also actually causes inequality. But only when we measure equality as the share of income that goes to the 1 percent – broader measures of inequality are not much affected; those appear to be the product solely of some of the other trends I mentioned before, like skill-biased technological change.

However, the trade-off is more social mobility:

Remember the social mobility stuff? Well that shows up in the data as well. Areas that innovate a lot show precisely the kind of Schumpeterian dynamics that make income inequality a lot more palatable to most observers who are not of the bitterly envious variety: There may be big gaps between rich and poor, but the poor today still have a reasonable shot at becoming rich tomorrow. And do you know what areas get a lot less of both innovation and mobility? Places with tons of lobbying activity, where the incumbents keep the innovators out. All in all this research suggests that some 20 percent of the increase in the share of income going to the top 1 percent since the mid-70s was caused by innovation alone. That may not sound like that much – but of course, we can’t just eliminate only the inequality we don’t like and keep the inequality that incentivized people to innovate.

This seems to fit with the Thomas Sowell quote above: there are no solutions, only trade-offs. This new study also fits with past research on cut-throat US capitalism vs. cuddly Nordic capitalism, top earners and skill-biased technological change, and Schumpeterian profits.

Closure 80+ Years in the Making

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And now for something inspiring:

Eugene Drucker: In this photo taken Wednesday, May 27, 2015, Grammy Award-winning American violinist Eugene Drucker, plays his violin during a rehearsal concert at the Music Hall in Raanana, central Israel. In 1933, the violinist Ernest Drucker left the stage midway through a Brahms concerto in Cologne at the behest of Nazi officials, in one of the first anti-Semitic acts of the new regime. Now, more than 80 years later, his son, Eugene, has completed his father’s interrupted work. With tears in his eyes, Drucker performed an emotional rendition of the Brahms Violin Concerto in D Major, Op. 77, over the weekend with the Raanana Symphonette Orchestra.In 1933, the promising young Jewish-German violinist Ernest Drucker left the stage midway through a Brahms concerto in Cologne at the behest of Nazi officials, in one of the first anti-Semitic acts of the new regime.

Now, more than 80 years later, his son, Grammy Award-winning American violinist Eugene Drucker, has completed his father’s interrupted work. With tears in his eyes, Drucker performed an emotional rendition of the Brahms Violin Concerto in D Major, Op. 77, over the weekend with the Raanana Symphonette Orchestra.

“I think he would feel a sense of completion. I think in some ways many aspects of my career served that purpose for him,” the 63-year-old Drucker said of his father, who passed away in 1993. “There is all this emotional energy and intensity loaded into my associations to this piece.”

Check out the full story at MSN.

Forthcoming ‘Markets Without Limits’: An Excerpt

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Presidential candidate Bernie Sanders recently made headlines when he stated in an interview, “You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country.” Many have criticized the comment, while others have labeled it “one of the most substantive of the campaign so far.” Over at Bleeding-Heart Libertarians, philosopher Jason Brennan of Georgetown University responded to Sanders with an excerpt from the forthcoming book Markets Without Limits: Moral Virtues and Commercial Interests. I’m quite excited for this volume and those interested in economics and the morality of markets should be too. Here is a snippet:

Philosophers advocate that we do what economists say doesn’t work and avoid doing what economists say does work. On this point, [philosopher] Bas van der Vossen rebukes his colleagues:

As a profession, we are in an odd but unfortunate situation. Our best philosophers and theorists develop accounts of global justice that are disconnected from the best empirical insights about poverty and prosperity. Reading these theories, one might think that our best prospects for alleviating poverty around the world lie in policies of redistribution, foreign aid, reforms to the international system, new global institutions, and so on. And one might think that markets, property rights, and economic freedom are at best incidental, and more likely inimical, to the eradication of global poverty. Such ignorance, if not denial, of the empirical findings about development and growth is irresponsible.

We share van der Vossen’s concerns.

Mainstream development economics, in a nutshell, holds that the poverty is an institutional problem. More precisely, poverty is human being’s natural state. Poverty is normal and does not need to be explained, but wealth does. The main reason some nations are rich and others poor is not because some nations have better geography, better natural resources, or better genes. Rather, rich countries are rich because they have better institutions. Rich countries have institutions that incentivize growth and development. These institutions include strong private property rights, inclusive and honest governments, stable political regimes, a dependable and inclusive legal system characterized by the rule of law, open and competitive markets, and free international trade. Poor countries have institutions that fail to incentive growth and development, and often instead have institutions that encourage predation. These countries have weak recognition or active disregard of property rights, exclusive and dishonest governments, instable political regimes, undependable legal systems characterized by the capricious rule of men rather than the rule of law, and closed, rent seeking, crony capitalist markets, or few markets at all, and little international trade.

Check out the full excerpt and be sure to pre-order Brennan’s book. You can watch an interview with Brennan on his Why Not Capitalism? below:

The Great Gatsby Curve: A Brookings Conversation

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“Every so often,” announces the Brookings Institution, “an academic finding gets into the political bloodstream. A leading example is “The Great Gatsby Curve,” describing an inverse relationship between income inequality and intergenerational mobility. Born in 2011, the Curve has attracted plaudits and opprobrium in almost equal measure. Social Mobility Memos is taking a look at opinions from both sides of the argument.”

Thus far, there are posts by:

Check out the series.

Globalization Leads to Mass Human Flourishing

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That’s what Ronald Bailey argues in the June issue of Reason. What are his reasons? Globalization–which he defines as “the open exchange of goods”–produces:

  • Longer, Healthier Lives
  • Women’s Liberation
  • Less Child Labor
  • Faster Economic Growth
  • Higher Incomes
  • Less Poverty
  • More Trees
  • Peace
  • More Productive Workers
  • Better Job Prospects

Each section has a number of studies to bolster his claim. Check it out.

Feeding the World With GMOs

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Image result for gmos

Golden rice was possible only with genetic engineering. The crop was stalled for more than ten years by the working conditions and requirements demanded by regulations…For example, we lost more than two years for the permission to test golden rice in the field and more than four years in collecting data for a regulatory dossier that would satisfy any national biosafety authority. I therefore hold the regulation of genetic engineering responsible for the death and blindness of thousands of children and young mothers.

This comes from Ingo Potrykus’ rather famous article in a July 2010 issue of Nature and is a written slap in the face to anti-GMO activists and the politicians who embrace them. This opposition has been described as partisan, though the anti-science stances of various parties are much closer than we often assume. I was reminded of the above quote after reading an article in Newsweek discussing new biotechnology and its opposition:

In 2012, a new tool was invented that revolutionizes how scientists can examine—and manipulate—plant genetic processes. It’s called CRISPR-Cas9, and unlike its predecessors in the world of genetic modification, it is highly specific, allowing scientists to zero in on a single gene and turn it on or off, remove it or exchange it for a different gene. Early signs suggest this tool will be an F-16 jet fighter compared with the Stone Age spear of grafting, the traditional, painstaking means of breeding a new plant hybrid. Biologists and geneticists are confident it can help them build a second Green Revolution—if we’ll let them.

…The process can easily modify plant DNA without changing the plant’s essence—except to make it tastier, more nutritious, quicker to market, easier to ship, machine-pickable, less needy of water and/or able to flourish in a heat wave. And we can do it for big companies and small, the world at large and isolated communities…In the old days, relying on hit-or-miss natural processes to breed plants took many years. Norman Borlaug, father of the first Green Revolution—a hugely successful effort to improve food-crop productivity in poor countries that began in the 1940s and eventually doubled or even quadrupled what many plants could produce—needed almost two decades to create a better wheat variety. With CRISPR-Cas9, we can compress that development cycle to a few days or weeks.

And yet, the activists continue to protest:

  • “Mexico, where maize was first domesticated, must now import it to meet local demand because activists there will not allow genetically modified organism hybrids. Mexico’s maize growers get yields 38 percent lower than the world average and three times below the U.S., where 90 percent of the maize crop is an insect-resistant GMO hybrid. Mexico’s fields are beset by such crop ravishers as the corn earworm, black cutworm and fall armyworm, which cost the country up to half its crops and incite farmers to spray their land with thousands of tons of chemical insecticides.”
  • “The European Union has approved just one genetically modified crop, a type of maize used for animal feed. The reasons are political and bureaucratic: A majority of member countries must approve a biotech plant, and anti-GMO sentiment runs strong in places where phrases like naturel and natürliche are more about what’s been done for centuries than what it actually means for something to exist in or be caused by nature.”
  • “The notion of GMOs has spooked environmental groups such as Greenpeace, which has resisted GMOs with violent action, including destroying an experimental Golden Rice field last year in the Philippines. This despite the fact that Golden Rice is being offered to the world by a nonprofit, with no commercial stipulations, and is likely to save many lives.”
  • ““No GMO” is now being embraced by consumer brands; the ascendant “fast-casual” chain Chipotle posts just such a sign in its restaurants. It makes sense: If over two-thirds of Americans think GMOs are unhealthy, declaring yourself GMO-free is a lucrative proposition. Local governments are also weighing in. Vermont now demands that all GMO foods sold there be labeled as such. Two rural counties in Oregon have banned GMO crops within their borders.”

The article ends with a quote from Gengyun Zhang, head of life sciences for BGI (China’s giant state-sponsored genetic engineering center): “With today’s technology, I have no doubt that we can feed the world.” Considering that the number of scientists who think GMOs are safe is slightly higher than those who think climate change is mostly due to human activity, perhaps we should give science a chance and activists the cold shoulder.

Secret to More Income or Marriage: Location

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Where you live affects both your income and your chance of getting married according to recent research by economist Raj Chetty and others at the Equality of Opportunity Project. Both studies were covered in a couple interactive articles in The New York Times. On location and income, the NYT reads,

Location matters – enormously. If you’re poor and live in the Dallas area, it’s better to be in Cooke County than in Kaufman County or Dallas County. Not only that, the younger you are when you move to Cooke, the better you will do on average. Children who move at earlier ages are less likely to become single parents, more likely to go to college and more likely to earn more. Every year a poor child spends in Cooke County adds about $210 to his or her annual household income at age 26, compared with a childhood spent in the average American county. Over the course of a full childhood, which is up to age 20 for the purposes of this analysis, the difference adds up to about $4,100, or 16 percent, more in average income as a young adult…These findings, particularly those that show how much each additional year matters, are from a new study by Raj Chetty and Nathaniel Hendren that has huge consequences on how we think about poverty and mobility in the United States. The pair, economists at Harvard, have long been known for their work on income mobility, but the latest findings go further. Now, the researchers are no longer confined to talking about which counties merely correlate well with income mobility; new data suggests some places actually cause it…“The broader lesson of our analysis,” Mr. Chetty and Mr. Hendren write, “is that social mobility should be tackled at a local level.”

You can actually check to see how your county stacks against others. Mine (Denton County, TX) is “about average in helping poor children up the income ladder. It ranks 1,171st out of 2,478 counties, better than about 47 percent of counties.”

But where you live doesn’t just affect income, but the odds of marriage:

The most striking geographical pattern on marriage, as with so many other issues today, is the partisan divide. Spending childhood nearly anywhere in blue America — especially liberal bastions like New York, San Francisco, Chicago, Boston and Washington — makes people about 10 percentage points less likely to marry relative to the rest of the country. And no place encourages marriage quite like the conservative Mountain West, especially the heavily Mormon areas of Utah, southern Idaho and parts of Colorado. These conclusions — based on an Upshot analysis of data compiled by a team of Harvard economists studying upward mobility, housing and tax policy — are not simply observations about correlation. The economists instead believe that they have identified a causal role that geography plays in people’s lives. The data, which covers more than five million people who moved as children in the 1980s and 1990s, suggests that children who move from, say, Idaho to Chicago really do become less likely to marry, even if the numbers can’t explain exactly why these patterns exist.

Political ideology isn’t the only thing that may encourage or discourage marriage. The Deep South encourages affluent children to marry, while discouraging low-income children of all races. Small towns (or low population density) also encourage marriage.

While this isn’t addressed in the articles, I’m curious if the influence on income and marriage are linked. Either way, Chetty’s work is very exciting. I’m watching him with growing interest.

Georgetown University Panel: Obama, Putnam, and Brooks on Poverty

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The President joined Harvard’s Robert Putnam and AEI’s Arthur Brooks on a panel at Georgetown University on the problem of poverty. It’s an interesting discussion that displays not only how liberals and conservatives view and approach the problem of poverty, but how they believe each other approaches it. It’s an enlightening and somewhat irritating thing to behold, but worth the watch.

Check it out below.

Divorce and Declining Christianity

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A recent blog post at Patheos made an important point regarding recent declines in Christianity throughout the United States:

Some will attempt to spin this as a victory for atheists, implying that people are “seeing the light” and the light is exposing the lie that religion really is.  That view, however, is not really supported by other research on what accounts for the flight from religion.  In particular,  research by Elizabeth Marquardt and other research by Ken Pargament shows that divorce and the resulting inability to idealize caregivers is behind a great deal of the move to unbelief. In order to feel at home in a religious community, two things need to happen.  First, kids need to feel like they have a spiritual home, but children of divorce struggle to do this.  As Marquardt explains it, children of divorce rarely end up going to church consistently, or going to the same church from  week to week.  This means, that rather than being able to use religion as a resource for constructing a coherent story for the meaning and purpose of their lives as many children from intact church-going families do, children of divorce have to go it alone.  They can’t trust their parents or their infrequently visited and divergent church communities to help them make sense of their lives…People raised in this environment struggle to let anyone else offer feedback or guidance.  They learn that they can’t trust the sources they are supposed to be able to trust for guidance and formation.  For these individuals church becomes just one more bunch of hypocritical grown-ups who can’t get their own crap together trying to tell other people how to live their lives.

With new research arguing that the divorce rate has actually increased, perhaps we shouldn’t be surprised that religiosity has decreased.