I really disagree with this "low-hanging fruit" idea. I used to work as a theoretical physicist at a major university until around ten years ago, and the problem I saw then was certainly not a lack of good ideas to work on. I had far more good ideas than I knew what to do with, and so did most of my colleagues.
The problem is that academia is just a shithole--poor funding, time increasingly consumed by administrative tasks, micromanagement of every activity, and absolutely insane decisions being made at really every turn.
Undergraduates are required to buy low-quality intro textbooks costing upwards of $500 (which you have to buy slightly different versions of every quarter for multi-quarter classes), are given department-assigned and graded homework and exams (professors were forbidden from doing either because the committee knows best), are largely unprepared (many didn't have a good grasp of even algebra), etc...
I just don't honestly see how anyone can look at a situation like that and say "yeah the problem is obviously that there are no good ideas left." The problem is that academia is oppressive, frustrating, and demoralizing, and it just isn't possible to consistently do good work in an environment like that. Pick up, say, one of Feynman's autobiographies and compare his academic experiences to a modern university.
Love how noncompetes are non-enforceable in California. We're not unionized (very few physicians are) so it's the best pressure point we have against management and to reset some internal power dynamics.
Medicine doesn't have any proprietary knowledge when it comes to patient care so noncompetes are just anti-labor, especially since there are only a few practice opportunities in a region.
You are a brilliant and interesting thinker and I am happy to read whatever you write. I even follow you on Twitter. I enjoyed the three sections because it is a weekend and I have more time, but generally it is hard to find the time to read longer articles during the week.
You asked for an opinion about the types of newsletters that your readers prefer. But, I’m sorry that I cannot help you evaluate this issue because I’m finding that I like both versions that you asked about. This shorter version with three subjects I found interesting because each subject had observations that I either did not know much about or had not considered, and now, I’m thinking about those things you presented.
Your single issue newsletters I also look forward to reading because you’ve given the issue a lot of thought and research so now I can do the same thing. That is what a good communicator does. Thanks for do it, and I feel I’m getting good value for my subscription and the time I allot to reading what you write.
Hope this helps. It is simplistic, I know, but it is why I subscribe.
Re wage-price spirals: in the Nordics, wage changes for workers (incl. white collar) are still often collectively negtiated between employer and employee unions. Because these economiew are small, open and export-driven, there can be mutual interest in ensuring export competitiveness. Not an economist, but I would assume that there is a lot of research looking into the effect on inflation of these mechanisms.
As a non-economist who's never taken an economics course, I am perpetually baffled by the seeming absence in nearly all "professional" discussions of inflation of an assessment of the role of human agency in creating it. Prices don't raise themselves: The price of any given thing will only rise if some human being -- or a human-designed algorithm -- actually decides to raise it, and then refuses to sell that thing to prospective buyers at anything less than the new price. Has anyone ever attempted to document this process? If the price of a gallon of milk I purchase at my local grocery story goes up by 50 cents, who, exactly, made that happen, and why? Presumably, someone, somewhere in the chain of production and distribution that leads from the cow that created the milk in the first place to the grocer who sells it, must have made a decision to raise the price of whatever good or service they contribute to the production or distribution of that gallon on milk: Who did that? Why? What happened further up (and down) the chain in response to that initial decision, and why?
Has anyone ever bothered to figure this sort of thing out? Inflation is an empirical phenomenon that originates with decisions made by human beings to raise prices. How can an economy-wide phenomenon possibly be modelled, predicted, understood and controlled if that phenomenon hasn't been studied granularly, at the level of actual human beings making decisions to raise prices for particular goods and services?
Does the proliferation of noncompetes say anything in formal terms about most people's intuitive sense that capital has more leverage than labor in wage negotiations? Simplistically, a noncompete is just a wealth transfer from employee to employer that would usually demand (at a minimum) a higher compensating wage to offset.
But while if you squint you can see how for high-level knowledge workers in highly-paying industries this might fit, I think it's clear that this completely breaks down at the point at which Jimmy John's subway sandwich shops are able to adopt them. That seems much more likely to reflect a structural lack of labor negotiating power than a kind of high level wage/restriction/investment tradeoff.
"Blanchard and Krugman yearn for a planning regime where the government basically coordinates between companies and workers... though who knows if it could ever really work in real life..."
Maybe the history of Australia's prices and incomes accord 1983-96 and other interventions by the Hawke government (using the national system of industrial arbitration and other powers, policies, negotiations and persuasion) provide some partial answers to the question.
Is inflation just a vicious cycle like the never ending dog chasing its tail or egg & chicken argument. There is no overall inflation until something changes, ie the balance is upset by raising prices, which will then increase the demand by labour for higher wages. But it will always be a question of what came first. BigCorp's demand for profit has always been there but the Gov't has stepped in to provide incentives to temper that demand - QE, tax cuts, bail-outs have all made profits easier to come by on the balance sheet.
Clearly, in the process of stopping those incentives, BigCorp is pushing back by raising prices to achieve profit motivations & the cycle responds accordingly.
My questions: can there be an equilibrium of profit/price/costs/incentives based on 2% inflation? Must there always be a 'thumb-on-the-scale' somewhere to achieve that balance or must we accept an economy, a society where, 'Privatise the profit & Socialize the cost' is the norm?
As a retired economics professor, I don't need you to apologize for a wonky post. After forty years studying econ, I still find many aspects of the field fascinating. So much so, that every time I see a meeting announcement I'm tempted to go. Regarding the decline in "disruptive" research, I believe refereed journal publication is responsible for much of the decline.
Because academic administrators desire qualifiable metrics, refereed journal acceptances aware highly valued. This has two consequences. First at institutions with lower levels of research support, it produces a good of low quality research to low quality journals. However, there may be some wheat among the chaff. The other consequence is what I refer to as "sausage making". This involves applying the same technique repeatedly to various days sets. This results in "high" productivity from an academic administrator's perspective but little disruption.
The other difficulty with peer review is that it locks in existing heirachies of quality research. Once again, there are two channels by which the process stifles disruption. Academic affiliation plays a too significant role in the seriousness with which a submission is considered. This is to a certain extent understandable, a paper from these backgrounds will likely have been presented on the seminar circuit. So the refereeing will not be completely blind. The more significant source of disfunction lies in the choice of reviewers. When an editor receives a potentially disruptive paper they will invariably choose an established scholar in the field. Such a reviewer may have a vested interest in not seeing their own contributions finished. I've consciously not personalized this, but I have friends whose innovative work had been rejected despite is apparent merits.
This is not sour grapes by the way. My research record was modest, definitely not disruptive.
As a business owner/employer, I only use noncompetes for senior management roles and high-level sales roles. It feels reasonable to me that if you’re going to get a bunch of insider information about a company (customer lists, employees, margin data, etc.), you shouldn’t be able to just walk next door and sell it off. Creates a very ugly environment.
Agreements should be reasonable and commensurate with the job, but in practice I think getting rid of all noncompete/non-diversion agreements would result in an uglier market equilibrium. You’d probably see a replacement of noncompetes with some form of compensation claw-backs instead, as well as a stronger reluctance to hire. No employer is just going to expose themselves without some defense mechanism.
I really disagree with this "low-hanging fruit" idea. I used to work as a theoretical physicist at a major university until around ten years ago, and the problem I saw then was certainly not a lack of good ideas to work on. I had far more good ideas than I knew what to do with, and so did most of my colleagues.
The problem is that academia is just a shithole--poor funding, time increasingly consumed by administrative tasks, micromanagement of every activity, and absolutely insane decisions being made at really every turn.
Undergraduates are required to buy low-quality intro textbooks costing upwards of $500 (which you have to buy slightly different versions of every quarter for multi-quarter classes), are given department-assigned and graded homework and exams (professors were forbidden from doing either because the committee knows best), are largely unprepared (many didn't have a good grasp of even algebra), etc...
I just don't honestly see how anyone can look at a situation like that and say "yeah the problem is obviously that there are no good ideas left." The problem is that academia is oppressive, frustrating, and demoralizing, and it just isn't possible to consistently do good work in an environment like that. Pick up, say, one of Feynman's autobiographies and compare his academic experiences to a modern university.
Love how noncompetes are non-enforceable in California. We're not unionized (very few physicians are) so it's the best pressure point we have against management and to reset some internal power dynamics.
Medicine doesn't have any proprietary knowledge when it comes to patient care so noncompetes are just anti-labor, especially since there are only a few practice opportunities in a region.
You are a brilliant and interesting thinker and I am happy to read whatever you write. I even follow you on Twitter. I enjoyed the three sections because it is a weekend and I have more time, but generally it is hard to find the time to read longer articles during the week.
Where is the argument that price gouging by corporations is a driver of inflation, or do you believe this is not a well-founded argument?
Noah,
You asked for an opinion about the types of newsletters that your readers prefer. But, I’m sorry that I cannot help you evaluate this issue because I’m finding that I like both versions that you asked about. This shorter version with three subjects I found interesting because each subject had observations that I either did not know much about or had not considered, and now, I’m thinking about those things you presented.
Your single issue newsletters I also look forward to reading because you’ve given the issue a lot of thought and research so now I can do the same thing. That is what a good communicator does. Thanks for do it, and I feel I’m getting good value for my subscription and the time I allot to reading what you write.
Hope this helps. It is simplistic, I know, but it is why I subscribe.
> around 18% of American workers currently under a noncompete
Typo, I think there should be an "are" in there.
Re wage-price spirals: in the Nordics, wage changes for workers (incl. white collar) are still often collectively negtiated between employer and employee unions. Because these economiew are small, open and export-driven, there can be mutual interest in ensuring export competitiveness. Not an economist, but I would assume that there is a lot of research looking into the effect on inflation of these mechanisms.
As a non-economist who's never taken an economics course, I am perpetually baffled by the seeming absence in nearly all "professional" discussions of inflation of an assessment of the role of human agency in creating it. Prices don't raise themselves: The price of any given thing will only rise if some human being -- or a human-designed algorithm -- actually decides to raise it, and then refuses to sell that thing to prospective buyers at anything less than the new price. Has anyone ever attempted to document this process? If the price of a gallon of milk I purchase at my local grocery story goes up by 50 cents, who, exactly, made that happen, and why? Presumably, someone, somewhere in the chain of production and distribution that leads from the cow that created the milk in the first place to the grocer who sells it, must have made a decision to raise the price of whatever good or service they contribute to the production or distribution of that gallon on milk: Who did that? Why? What happened further up (and down) the chain in response to that initial decision, and why?
Has anyone ever bothered to figure this sort of thing out? Inflation is an empirical phenomenon that originates with decisions made by human beings to raise prices. How can an economy-wide phenomenon possibly be modelled, predicted, understood and controlled if that phenomenon hasn't been studied granularly, at the level of actual human beings making decisions to raise prices for particular goods and services?
Or maybe I'm just missing something.
Too much money chasing too few goods. All the rest is noise.
I’ll help the economists here. Recent inflation was caused by the energy shock and the post covid supply shocks.
It’s crazy that after the last 3 years, hospitals like the Cleveland Clinic still have non competes.
Does the proliferation of noncompetes say anything in formal terms about most people's intuitive sense that capital has more leverage than labor in wage negotiations? Simplistically, a noncompete is just a wealth transfer from employee to employer that would usually demand (at a minimum) a higher compensating wage to offset.
But while if you squint you can see how for high-level knowledge workers in highly-paying industries this might fit, I think it's clear that this completely breaks down at the point at which Jimmy John's subway sandwich shops are able to adopt them. That seems much more likely to reflect a structural lack of labor negotiating power than a kind of high level wage/restriction/investment tradeoff.
"Blanchard and Krugman yearn for a planning regime where the government basically coordinates between companies and workers... though who knows if it could ever really work in real life..."
Maybe the history of Australia's prices and incomes accord 1983-96 and other interventions by the Hawke government (using the national system of industrial arbitration and other powers, policies, negotiations and persuasion) provide some partial answers to the question.
https://www.afr.com/policy/economy/from-houdini-hawke-to-albanese-s-answer-20220728-p5b5je
https://en.wikipedia.org/wiki/Prices_and_Incomes_Accord
Is inflation just a vicious cycle like the never ending dog chasing its tail or egg & chicken argument. There is no overall inflation until something changes, ie the balance is upset by raising prices, which will then increase the demand by labour for higher wages. But it will always be a question of what came first. BigCorp's demand for profit has always been there but the Gov't has stepped in to provide incentives to temper that demand - QE, tax cuts, bail-outs have all made profits easier to come by on the balance sheet.
Clearly, in the process of stopping those incentives, BigCorp is pushing back by raising prices to achieve profit motivations & the cycle responds accordingly.
My questions: can there be an equilibrium of profit/price/costs/incentives based on 2% inflation? Must there always be a 'thumb-on-the-scale' somewhere to achieve that balance or must we accept an economy, a society where, 'Privatise the profit & Socialize the cost' is the norm?
As a retired economics professor, I don't need you to apologize for a wonky post. After forty years studying econ, I still find many aspects of the field fascinating. So much so, that every time I see a meeting announcement I'm tempted to go. Regarding the decline in "disruptive" research, I believe refereed journal publication is responsible for much of the decline.
Because academic administrators desire qualifiable metrics, refereed journal acceptances aware highly valued. This has two consequences. First at institutions with lower levels of research support, it produces a good of low quality research to low quality journals. However, there may be some wheat among the chaff. The other consequence is what I refer to as "sausage making". This involves applying the same technique repeatedly to various days sets. This results in "high" productivity from an academic administrator's perspective but little disruption.
The other difficulty with peer review is that it locks in existing heirachies of quality research. Once again, there are two channels by which the process stifles disruption. Academic affiliation plays a too significant role in the seriousness with which a submission is considered. This is to a certain extent understandable, a paper from these backgrounds will likely have been presented on the seminar circuit. So the refereeing will not be completely blind. The more significant source of disfunction lies in the choice of reviewers. When an editor receives a potentially disruptive paper they will invariably choose an established scholar in the field. Such a reviewer may have a vested interest in not seeing their own contributions finished. I've consciously not personalized this, but I have friends whose innovative work had been rejected despite is apparent merits.
This is not sour grapes by the way. My research record was modest, definitely not disruptive.
As a business owner/employer, I only use noncompetes for senior management roles and high-level sales roles. It feels reasonable to me that if you’re going to get a bunch of insider information about a company (customer lists, employees, margin data, etc.), you shouldn’t be able to just walk next door and sell it off. Creates a very ugly environment.
Agreements should be reasonable and commensurate with the job, but in practice I think getting rid of all noncompete/non-diversion agreements would result in an uglier market equilibrium. You’d probably see a replacement of noncompetes with some form of compensation claw-backs instead, as well as a stronger reluctance to hire. No employer is just going to expose themselves without some defense mechanism.