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How China Became Capitalist

Posted by Peter on November 29, 2014
Posted in: Book Reviews, China, Economics. Tagged: .

Book review: How China Became Capitalist, by Ronald Coase and Ning Wang.

This is my favorite book about China so far, due to a combination of insights and readability.

They emphasize that growth happened rather differently from how China’s leaders planned, and that their encouragement of trial and error was more important than their ability to recognize good plans.

The most surprising features of China’s government after 1978 were a lack of powerful special interests and freedom from ideological rigidity. Mancur Olson’s book The Rise and Decline of Nations suggests how a revolution such as Mao’s might free a nation from special interest power for a good while.

I’m still somewhat puzzled by the rapid and nearly complete switch from a country blinded by ideology to a country pragmatically searching for a good economy. Coase and Wang attribute it to awareness of the harm Maoism caused, but I can easily imagine that such awareness could mainly cause a switch to a new ideology.

It ends with a cautiously optimistic outlook on China’s future, with some doubts about freedom of expression, and some hope that China will contribute to diversity of capitalist cultures.

How the West Won

Posted by Peter on September 8, 2014
Posted in: Book Reviews, Politics. Tagged: , , .

Book review: How the West Won: The Neglected Story of the Triumph of Modernity, by Rodney Stark.

This book is a mostly entertaining defense of Christian and libertarian cultures’ contribution to Western civilization’s dominance.

He wants us to believe that the industrial revolution resulted from mostly steady progress starting with Greek city-states, interrupted only by the Roman empire.

He defends the Catholic church’s record of helping scientific progress and denies that the Reformation was needed, although he suggests the Catholic church’s reaction to the Reformation created harmful anti-capitalist sentiments.

His ideas resemble those in Fukuyama’s The Origins of Political Order, yet there’s little overlap between the content of the two books.

The early parts of the book have too many descriptions of battles and other killings whose relevance is unclear.

I was annoyed at how much space he devoted to attacking political correctness toward the end of the book.

In spite of those problems, he presents many interesting ideas. Some are fairly minor, such as changes in privacy due to the Little Ice Age triggering the invention of chimneys. Others provide potentially important insights into differences between religions, e.g. “many influential Muslim scholars have held that efforts to formulate natural laws are blasphemy because they would seem to deny Allah’s freedom to act.”

Alas, I can only give the book a half-hearted endorsement because I suspect many of his claims are poorly supported. E.g. he thinks increased visibility of child labor in the 1800s caused child labor laws via shocked sensibilities. Two alternatives that seem much more plausible to me are that the increased visibility made the laws feasible to enforce, and the increased concentration of employers into a separate class made them easier scapegoats.

Rule of the Clan

Posted by Peter on June 16, 2014
Posted in: Book Reviews, Politics. Tagged: , .

Book review: The Rule of the Clan: What an Ancient Form of Social Organization Reveals About the Future of Individual Freedom by Mark S. Weiner.

This book does a good job of explaining how barbaric practices such as feuds and honor killings are integral parts of clan-based systems of dispute resolution, and can’t safely be suppressed without first developing something like the modern rule of law to remove the motives that perpetuate them.

He has a coherent theory of why societies with no effective courts and police need to have kin-based groups be accountable for the actions of their members, which precludes some of the individual rights that we take for granted.

He does a poor job of explaining how this is relevant to modern government. He writes as if anyone who wants governments to exert less power wants to weaken the rule of law and the ability of governments to stop violent disputes. (His comments about modern government are separate enough to not detract much from the rest of the book).

He implies that modern rule of law and rule by clans are the only stable possibilities. He convinced me that it would be hard to create good alternatives to those two options, but not that alternatives are impossible.

To better understand how modern individualism replaced clan-based society, read Fukuyama’s The Origins of Political Order together with this book.

War

Posted by Peter on August 31, 2013
Posted in: Book Reviews, Politics. Tagged: , .

Book review: War in Human Civilization by Azar Gat.

This ambitious book has some valuable insights into what influences the frequency of wars, but is sufficiently long-winded that I wasn’t willing to read much more than half of it (I skipped part 2).

Part 1 describes the evolutionary pressures which lead to war, most of which ought to be fairly obvious.

One point that seemed new to me in that section was the observation that for much of the human past, group selection was almost equivalent to kin selection because tribes were fairly close kin.

Part 3 describes how the industrial revolution altered the nature of war.

The best section of the book contains strong criticisms of the belief that democracy makes war unlikely (at least with other democracies).

Part of the reason for the myth that democracies don’t fight each other was people relying on a database of wars that only covers the period starting in 1815. That helped people overlook many wars between democracies in ancient Greece, the 1812 war between the US and Britain, etc.

A more tenable claim is that something associated with modern democracies is deterring war.

But in spite of number of countries involved and the number of years in which we can imagine some of them fighting, there’s little reason to consider the available evidence for the past century to be much more than one data point. There was a good deal of cultural homogeneity across democracies in that period. And those democracies were part of an alliance that was unified by the threat of communism.

He suggests some alternate explanations for modern peace that are only loosely connected to democracy, including:

  • increased wealth makes people more risk averse
  • war has become less profitable
  • young males are a smaller fraction of the population
  • increased availability of sex made men less desperate to get sex by raping the enemy (“Make love, not war” wasn’t just a slogan)

He has an interesting idea about why trade wasn’t very effective at preventing wars between wealthy nations up to 1945 – there was an expectation that the world would be partitioned into a few large empires with free trade within but limited trade between empires. Being part of a large empire was expected to imply greater wealth than a small empire. After 1945, the expectation that trade would be global meant that small nations appeared viable.

Another potentially important historical change was that before the 1500s, power was an effective way of gaining wealth, but wealth was not very effective at generating power. After the 1500s, wealth became important to being powerful, and military power became less effective at acquiring wealth.

The Origins of Political Order

Posted by Peter on June 26, 2013
Posted in: Book Reviews, Freedom, Politics. Tagged: , , , , .

Book review: The Origins of Political Order: From Prehuman Times to the French Revolution, by Francis Fukuyama.

This ambitious attempt to explain the rise of civilization (especially the rule of law) is partly successful.

The most important idea in the book is that the Catholic church (in the Gregorian Reforms) played a critical role in creating important institutions.

The church differed from religions in other cultures in that it was sufficiently organized to influence political policy, but not strong enough to become a state. This lead it to acquire resources by creating rules that enabled people to leave property to the church (often via wills, which hardly existed before then). This turned what had been resources belonging to some abstract group (families or ancestors) into things owned by individuals, and created rules for transferring those resources.

In the process, it also weakened the extended family, which was essential to having a state that impartially promoted the welfare of a society that was larger than a family.

He also provides a moderately good description of China’s earlier partial adoption of something similar in its merit-selected bureaucracy.

I recommend reading the first 7 chapters plus chapter 16. The rest of the book contains more ordinary history, including some not-too-convincing explanations of why northwest Europe did better than the rest of Christianity.

1493

Posted by Peter on January 29, 2012
Posted in: Book Reviews. Tagged: , , , , .

Book review: 1493: Uncovering the New World Columbus Created, by Charles C. Mann.

This book is about the globalization triggered by Columbus. The book’s jacket describes this set of changes as “the most momentous biological event since the death of the dinosaurs”. But that was probably written by a poorly informed marketing person. The contents of the book promote a more plausible claim that the effects were bigger than most realize.

Some of the ideas that this book reports are surprising, potentially important, but also somewhat speculative. E.g. large-scale reforestation resulting from smallpox killing existing inhabitants apparently contributed to the little ice age by sequestering carbon.

Much of the book is devoted to the spread of non-human species, but there are long sections on slavery, including speculation about how cheap land might have made slavery more important, and how the differences between Algonkian and Mississippian Indian cultures may have affected attitudes toward slavery in northern and southern U.S.

The first quarter of the book seemed well written, but the remainder of the book wanders through anecdotes of unclear importance. If I’m trying to focus on long-term effects of the globalization that Columbus triggered, why should I care about the details of numerous battles?

The book might come closer to living up to the jacket’s hype if it argued that Columbus caused the industrial revolution. But Mann seems confused about what the industrial revolution was – he treats rubber as a necessary component of the industrial revolution, but that happened well after experts say the industrial revolution started.

It wouldn’t be hard to use the ideas in this book to generate speculation that Columbus caused the industrial revolution, e.g. the potato’s ability to feed several times as many people as wheat, as well as cheaper security due the difficulty of stealing potatoes which are left in the ground until needed, made more people available to invent technology, and might have generated wealth and predictability that enabled inventors to focus on more distant rewards. But my guess is that this is only a small part of what caused the industrial revolution.

A Splendid Exchange

Posted by Peter on February 12, 2010
Posted in: Book Reviews, Economics. Tagged: .

Book Review: A Splendid Exchange: How Trade Shaped the World by William J. Bernstein.

This book starts off as a relatively ordinary history book, then toward the end offers a moderate number of valuable insights. Those insights don’t appear to be original, but he performs a valuable service by drawing attention to ideas that aren’t as widely known as they should be.

He argues that the Boston Tea Party was intended to keep tea prices high, and instigated by the merchants who were threatened by increased competition, using the much of the same rhetoric that modern protectionists use.

He describes a strong connection between a decrease in the price of mailing a letter and the ability of people of ordinary wealth to organize opposition to the Corn Laws.

He has an interesting argument that the benefits of international trade is the resulting desire for peace between people who have business relationships with each other, rather than the more obvious but apparently small benefits that are more direct. I wish there were stronger evidence that trade generates peace.

He makes a moderate number of claims that seem poorly thought out. E.g. “a national or central bank” is “the bedrock financial institution of the modern world”.

Greatness

Posted by Peter on June 23, 2009
Posted in: Book Reviews, Politics, The Human Mind. Tagged: , , .

Book review: Greatness: Who Makes History and Why by Dean Keith Simonton.

This broad and mediocre survey of psychology of people who stand out in history probably contains a fair number of good ideas, but it’s hard to separate them from the many ideas that are questionable guesses. He’s inconsistent about distinguishing his guesses from claims backed by good evidence.

One of the clearest examples is his assertion that childhood adversity builds character. He presents evidence that eminent figures were unusually likely to have had a parent die early, and describes this as the “most impressive proof” of his claim. He ignores the possibility those people come from families with a pattern of taking sufficiently unusual risks to explain that evidence.

In other places, he makes mistakes which seemed reasonable when the book was published, such as “Mendelian laws of inheritance are blind to whether an individual is first-born or later-born” (parental age has a measurable effect on mutation rates).

He avoids some of the worst mistakes that a psychology of history could make, such as trying to psychoanalyze individuals without having enough information about them.

He mentions some approaches to analyzing presidential addresses and corporate letters to stockholders, which have some potential to be used in predicting whether leaders have the appropriate personality for their jobs. I wonder what would happen if many voters/stockholders demanded that leaders pass tests of this nature (I’m assuming the tests can be scored objectively, but that may be shaky assumption). I’m confident that we’d get leaders with rhetoric that passes those tests. Would that simply mean the leaders change their rhetoric, or would it be hard enough to maintain a mismatch between rhetoric and thought patterns that we’d get leaders with better thought patterns?

Historical Dynamics

Posted by Peter on May 20, 2009
Posted in: Book Reviews. Tagged: , .

Book review: Historical Dynamics: Why States Rise and Fall by Peter Turchin.

Turchin uses the tools and perspective of population biology to model some important aspects of the growth and collapse of empires. The relatively dry and mathematical style of the book makes it slow reading, but it leaves less ambiguity than most books about history. He has no obvious political biases – it often seems that his main bias is a preference for the tools of biologists over the tools of historians.

One important aspect of his approach is that it models the dynamics of a feature that is roughly described by terms such as solidarity, trust, and cooperation. He convinced me that he has described some of the influences that cause that feature to increase and decrease (the section title “Frontiers as incubators of group solidarity” says a good deal about his model).

Some aspects of the book left me wondering whether his eccentric worldview added anything to my understanding of history, but occasionally he comes up with ideas that have implications that are clearly new to me, such as his suggestion that monogamy can help an empire continue it’s expansion for a longer time.

He makes some serious attempts to test his models against the available data. It’s hard to tell whether enough data is available to adequately test such ambitious claims.

The biggest limitation of the book is that he assumes Malthusian conditions. While it is likely that some of his analysis applies to the industrial world, he thinks it’s premature to ask how much of it applies today. That means it ought to be of interest mainly to historians for now.

Economics of Piracy

Posted by Peter on May 5, 2009
Posted in: Book Reviews, Economics. Tagged: , .

Book review: The Invisible Hook: The Hidden Economics of Pirates by Peter Leeson.

This is an interesting history of early eighteenth century pirates with an economist’s insights into what influenced them to have institutions such as democracy and to be in many ways pleasanter to serve on than commercial or military ships of the same time.

He has a fairly open bias toward portraying pirates favorably. I sometimes wondered whether there’s enough evidence to support his sometimes surprising conclusions. He makes plausible claims to be getting his historical information from the relevant experts, but without careful checking I can’t tell whether he has slanted his story to make it more entertaining.

He describes some good reasons why “workers’ democracy” doesn’t work as well in modern corporations as it did on pirate ships. But he is too willing to accept the observed absence of corporate democracy as evidence of its inefficiency. I can easily imagine that managers grab more power than is good for the company, and that principal-agent problems let them get away with it (pirates’ relations with the law made it easier for them to remedy this via mutiny). Also, he overstates the claim that “workers don’t have the finances required” for worker ownership of corporations. There are plenty of companies with low enough capital requirements for this to be unimportant. The big difference I see between modern corporations and pirate ships is that pirates had strong reasons to stick together until their venture got enough loot for them to all retire at once and divide the results. Employees in modern corporations want much more flexibility in when they leave the company, which creates complications for workers’ democracy or for the employee who wants to leave however it is handled.

One analysis whose absence disappointed me was whether the long-term benefits to joining a pirate ship were better than those of commercial or military ships. What fraction of pirates retired wealthy? How many of them were fooled by a temporary shortage of law enforcement into adopting a career with an abnormally high death rate once governments increased law enforcement?

He occasionally digresses into standard economics rants that have no relevance to pirates, such as the two pages on lobbyist rent-seeking.