Cousin Causality

                                                 Link to the Forbes article above

                                                 Link to the Forbes article above

                                                 Link to the Pediatrics editorial above

                                                 Link to the Pediatrics editorial above

                                                Link to the Pediatrics article above

                                                Link to the Pediatrics article above

It is often said, rightly, that "Correlation is not causation." But one can say even more: "Correlation between A and B with A coming earlier in time than B is not causation." Let's say A and B are correlated, and someone is interested in knowing if A causes B. The most common reasons for A being correlated with B are

  1. A causes B
  2. B causes A
  3. C causes A and C causes B. 

Given that someone is interested in whether or not A causes B, the second possibility, B causes A is called "reverse causality." Unfortuntately, the third possibility does not have a snappy name that I am aware of. Over my entire teaching career I have ended up calling it "A third thing causes both ___ and ____." Unless someone knows a better name, let me propose calling the third possibility "cousin causality" of A and B.

The analogy is that for any pair of cousins, a grandparent or two helped cause both of those two cousins. The two cousins may never have interacted directly at all, and could have been adopted at birth by different families on opposite coasts, but they will share traits in common.

Vaping. Let me apply the old, but newly rechristened concept of cousin causality to article and associated editorial linked above. The article is "Trajectories of E-Cigarette and Conventional Cigarette Use Among Youth by Krysten W. Bold, Grace Kong, Deepa R. Camenga, Patricia Simon, Dana A. Cavallo, Meghan E. Morean and Suchitra Krishnan-Sarin." The "Conclusions" section of the abstract begins impressively:

E-cigarette use was associated with future cigarette use across 3 longitudinal waves, yet cigarette use was not associated with future e-cigarette use.

This is useful information. In this case it makes it harder to maintain a story of reverse causality. But it does nothing to rule out cousin causality. What if (contrary to my own views) some kids

(a) think things like smoking are a cool symbol of rebellion,

(b) at a young enough age, both vaping and smoking count as "things like smoking," but

(c) at an older age, vaping no longer counts because it is the sort of thing that youngsters do,

(d) except for the growing realization that vaping is babyish just discussed, between vaping and smoking there is some tendency for kids to keep doing the one they started doing. 

In this story, if you take away vaping, the kids who think smoking and the like are a cool symbol of rebellion will still take up smoking. The vaping didn't cause smoking, the desire to be cool caused both vaping and smoking. And we can explain the time sequence by saying that at older ages the desire to be cool tends to cause smoking relatively more compared to vaping.  

The authors interpret their results as if there were no chance of cousin causality. Without much sign of caution, the abstract assumes causality from vaping to smoking:

Future research needs to examine mechanisms through which e-cigarette use leads to cigarette use.

In other words, "Because vaping allows one to predict later smoking, we now know that vaping causes smoking, it is just a matter of how vaping causes smoking." Just in case there is any doubt that the authors are claiming that vaping causes smoking, the next line is:

E-cigarette regulation and prevention programs may help prevent future use of cigarettes among youth.

At least this has the word "may" in it, but in combination with the previous sentence, it is a strong claim that vaping causes smoking.

The editorial by Jonathan Klein in the same issue of Pediatrics also has no qualms about asserting that this evidence points to vaping causing smoking:

"With this study, we add longitudinal, causal evidence that the transition from e-cigarettes to combustible products, at least for adolescents, is a one-way street,” wrote Jonathan Klein, MD, from the University of Illinois Pediatrics Department in Chicago, in an accompanying editorial.

If the word "causal" were dropped, the phrase "one-way street" might be a clever way to imply causality while having deniability that one had ever claimed causality:

With this study, we add longitudinal evidence that the transition from e-cigarettes to combustible products, at least for adolescents, is a one-way street

But with the word "causal" the claim that vaping causes smoking is overt. 

Financial Education. There are many other applications where the possibility of cousin causality needs to be considered. For example, suppose we want to know to what extent a given dose of financial education causes people to make better financial decisions. Just looking at how well financial education predicts good financial decisions won't do the trick, because being smart through processes prior to the financial education can both lead someone to get financial education and make someone better at making financial decisions. Take a way the financial education, and the intelligence that preceded the financial education will still lead to better financial decisions. 

Holding the social environment fixed, I find it very difficult to think of anything that would make one person more likely to get financial education than another in the cross-section that doesn't also have a direct effect in improving financial decisions. For example, think about characteristics of parents. The sort of parent who would encourage a kid to get financial education would also be likely to transmit financial knowledge and savvy at home. Personally, I find it easy to believe that this knowledge and savvy transmitted at home might be much more powerful in its effects on financial decisions than a few semesters of formal financial education. 

To get causality of financial education requires something like a randomized trial or the introduction of an additional financial education requirement in a particular state. And randomized trials are difficult because the dosage of financial education that would cause a detectable different in financial decision-making might be quite expensive. 

Long-Term Bond Prices. I have been focusing on cousin causality, but there are cases where A coming before B in some sense can't even rule out reverse causality: B causing A. The standard theory of the term-structure of interest rates says that if the Fed is now expected to raise future short-term interest rates faster than was expected before, long-term bond prices will be driven down—which is equivalent to long-term interest rates going up. So in some sense the level of future short-term rates is causing the current level of long-term rates.

Of course, this isn't quite right. There is something already out there, now, that is likely to cause future short-term rates to be higher than they otherwise would be and is causing current long-term rates to be higher through people's thoughts now about future short-term rates. Seen that way, current long-term interest rates being able to predict future short-term rates is an example of cousin causality. Whatever is driving the Fed's plans is driving both future short-term rates and—through thoughts about future short-term rates—current long-term rates. In any case, the fact that the movement in long-term rates comes before the movement in short-term rates doesn't mean that the movement in long-term rates now caused the movement in short-term rates later. 

Conclusion. I want to end with a challenge. Now that you know the handy term "cousin causality," look for examples of where this might be going on—especially where it might mean that someone's claim of causality is less of an open-and-shut case than they think. Examples won't be hard to find. For both people and nations, good things tend to cluster with good things and bad things tend to cluster with bad things. But in my view, most of the correlations come from cousin causality. It isn't so easy to single out the underlying causes that are the "grandparents" in the analogy behind the naming of cousin causality. 

The Case Against Sugar: Stephan Guyenet vs. Gary Taubes

Link to Stephan Guyenet's blog post "Bad sugar or bad journalism? An expert review of “The Case Against Sugar”."

Link to Stephan Guyenet's blog post "Bad sugar or bad journalism? An expert review of “The Case Against Sugar”."

Although its practical advice is vastly inferior to Jason Fung's books The Obesity Code, and The Complete Guide to FastingI liked Gary Taubes's book The Case Against Sugar. As a result, more than one person has pointed me to Stephan Guyenet's blog post critical of The Case Against Sugar. Here, let me evaluate Stephan's arguments. 

First, I should say that I start out expecting less from journalists like Gary Taubes than the standard that Stephan Guyenet wants to judge them buy. Stephan mentions repeatedly the "Igon Value Problem," which refers to a term "coined by Steven Pinker in a review of Malcolm Gladwell's book What the Dog Saw." Malcolm Gladwell did not know what an eigenvalue was, and so misheard it as an "Igon value." Similarly, Gary Taubes is not himself a scientist and so does not fully understand everything he is talking about. But he does give us a tour through the history of thought about nutrition and what he felt he learned by talking to many scientists, with an emphasis on what the more contrarian scientists said. This is a useful service. 

The second thing that needs to be said about The Case Against Sugar is that other than a few new ideas, it is mainly a dumbed-down version of Gary Taubes's book Why We Get Fat, which in turn is a dumbed-down version of Gary Taubes's book Good Calories, Bad Calories. Despite that, I found it well worth my time to read all three books. Given the importance of the topic, I think it was appropriate for Gary Taubes to write a dumbed-down version of his earlier books, even if that leads to some oversimplification relative to what Gary wrote in Good Calories, Bad Calories.

      Why We Get Fat

      Why We Get Fat

Third, whatever the flaws in Gary Taubes's books, he is ultimately convincing on two points: 

  • Sugar is very, very bad. I will say more below on why convincing people of that is an important accomplishment.
  • What the nutrition establishment is telling us needs to be closely examined and cross-checked by scientists outside the nutrition establishment. It is very unwise to simply trust the nutrition establishment. 

On  the second point, what Stephan Guyenet says about nutrition scientists is not very reassuring. Gary Taubes emphasizes that many of the scientists who tried to exonerate sugar were in the pay of the sugar industry. Stephan does not inspire confidence in the interpretations made by nutrition scientists with his response that a key scientist who attacked sugar was in the pay of the egg, edible oil, and dairy industry. Stephan does say 

... in 2017, research institutions and reputable scientific journals have policies in place for disclosing and limiting conflicts of interest. These policies aren’t perfect, but they’re much better than what we had two decades ago. 

But even if the conflict-of-interest is currently completely solved (which I doubt) there is hysteresis (history dependence) in science. Points of view that became dominant in the industry-funding free-for-all period still affect where the science is coming from today. 

Let me turn to a more point-by-point discussion of Stephan's post.

A. In his second paragraph Stephan writes:

The Case Against Sugar is a journey through sugar history and science that argues the point that sugar is the principal cause of obesity, diabetes, coronary heart disease, and many other common noncommunicable diseases. This differs from the prevailing view in the research and public health communities that obesity and noncommunicable disease are multi-factorial, with refined sugar playing a role among other things like excess calorie intake, physical inactivity, cigarette smoking, alcohol and illegal drug use, and various other diet and lifestyle factors. I side with the latter view.

Here Stephan seems to be saying "Sensible people like me realize that sugar is one of several coequal causes of obesity, diabetes, heart disease etc., not the only cause." But walking down the aisles of any grocery store and comparing the number of "lowfat" offerings to the number of "no sugar added" offerings makes it clear that in the popular imagination the dangers of sugar are rated far, far below the dangers of dietary fat. So there is a lot of work to be done to get people's perception of the dangers of sugar up to the level of being "sugar is bad on a par with four or five other things" that Stephan seems to give as his own view. If Gary overstates the harm from sugar (and I will argue Gary overstates the harm from sugar less than Stephan thinks) it may show Gary's inferiority to real scientists (a key part of Stephan's message), but it does not make Gary a danger to public health; given the public's underestimation of the dangers of sugar, Gary's overstatement is a countervailing error.  

B. A little further down, this passage is an important part of Stephan's argument:

... sugar intake is higher today in the US than it was in the 1970s, and while obesity has increased three-fold, coronary heart disease mortality has declined by over 60 percent (456). Taubes neglects to inform the reader that sugar intake has been declining since 1999 in the US, a period over which obesity and diabetes rates have increased substantially (789).

Here, Gary has made himself a real-life straw man by pushing too hard the idea that sugar is the one and only problem. Here I won't defend Gary; let me defend instead my own view—which draws on the arguments in Gary's books, but interprets them by my own lights. In my view, which is very much in the spirit of what Gary is saying but I hope is more subtle, the two main causes of the rise in obesity are: 

  1. The shift toward consumption of foods that are high on the insulin index. (See "Forget Calorie Counting; It's the Insulin Index, Stupid.") Many of these are high in sugar, but some are not. For example, processed "lowfat" foods are higher on the insulin index than the corresponding full fat foods. So the spread of lowfat foods could be contributing to the rise in obesity even in a period when sugar consumption itself is declining somewhat. 
  2. The expansion of the "eating window" within each day, with the corresponding shortening of the biggest chunk of time with no food consumption. (See "Stop Counting Calories; It's the Clock that Counts.")

Unfortunately, good data on the timing of food consumption for a representative sample is not available, but having lived through the 1970s and all the decades after (I was born in 1960), it is my sense that attitudes have become much more favorable to snacking than they were when I was young. So I suspect that the average daily eating window has, in fact lengthened since the 1970s. 

Looking over the last 120 years instead of just the last 45, there is little question that consumption of foods high on the insulin index (most of which have their insulin index raised by their sugar content) has gone up in a big way since the late 19th century. 

C. Stephan's next paragraph is: 

Taubes argues that sugar is the only factor that reliably shows up when a culture develops Western noncommunicable diseases, supporting the point with examples of cultures that adopted sugar-rich diets and became ill. Yet he makes no effort to look for a counterexample that could refute his argument: a traditionally-living culture that has a high intake of sugar and does not suffer from Western noncommunicable diseases. If such a culture can be found, this piece of evidence is sufficient to reject Taubes’s argument that sugar reliably associates with the onset of these diseases in a population. Let’s do Taubes’s research for him. A well-studied Tanzanian hunter-gatherer tribe called the Hadza gets 15 percent of its average year-round calorie intake from honey, plus fruit sugar on top of it. This approximates US sugar intake, yet the Hadza do not exhibit obesity, cardiovascular disease, or any of the other disorders Taubes attributes to sugar (1011). In fact, many hunter-gatherer groups relied heavily on honey historically, including the Mbuti of the Congo whose diet was up to 80 percent honey during the rainy season (10). Yet they do not exhibit obesity or insulin resistance (12).

What are I thought were some of Gary's best arguments were his arguments about the likely role of sugar and flour in bringing to indigenous populations what in an age before political correctness were called the "Diseases of Civilization." These discussions about the transition to the "Diseases of Civilization" or "Western Diseases" are some of the best parts of Gary's books. Stephan does not discuss all of the places where Gary's historical argument based on the transition from indigenous diets to Western diets looks good, and I cannot do it justice here.

Gary argues that other than Western diets adding sugar and flour, every other aspect of Western diets was duplicated by at least some indigenous diet, so sugar and flour must be the culprit. This is a strong argument. However, I would add in the possibility that people in almost every indigenous population had substantial chunks of time when they had no food consumption. Whether their fasts were involuntary or not, they probably fasted reasonably frequently. So in my view, the key aspects of Western diets that brought Western Diseases were sugar, flour and a reduction in periods of time with no food consumption. 

The protective effects of fasting could be crucial for explaining the lack of Western diseases among the Hadza and the Mbuti that Stephan points to as evidence against the evils of sugar. Following Jason Fung's logic that I lay out in "Obesity Is Always and Everywhere an Insulin Phenomenon," the periods when the Hadza and Mbuti ate a lot of sugar would have been high-insulin periods, but those high-insulin periods would have been counteracted by the low-insulin periods of low or zero food consumption. I wouldn't recommend to anyone an alternation between high sugar consumption and fasting—it would be quite painful because sugar consumption when you do eat makes fasting a lot harder (or so I believe based on my own experience and hope to demonstrate for other people someday if no one else has)—but the fasting component might be sufficient to avoid the worst of the Western Diseases. 

D. Next, after invoking the "Igon Value Problem," to remind his readers of the greater merit of scientists as compared to journalists, Stephan writes:

Taubes repeatedly asserts that researchers, physicians, and nutritionists simply assume that obesity causes diabetes. In fact, there is abundant and compelling evidence supporting this “assumption”, and such evidence is only a few keystrokes away on Google Scholar (13141516). Yet it receives no mention in the book. Instead, the reader is gravely informed that today’s scientists, physicians, and nutritionists simply inherited the idea from the previous generation of scientists, who themselves essentially plucked it out of thin air. This is followed by Taubes’s alternative viewpoint, which seems downright reasonable by comparison despite the weak evidence offered to support it.

If you actually read the abstracts of the four papers that Stephan flags, and assume that there isn't something brilliant in the papers that the authors didn't bother to put in the abstracts, they don't contradict the idea that both obesity and diabetes are caused (probabilistically) by chronic high insulin levels rather than diabetes being caused by obesity per se. This distinction matters for the reason I give in my post "Obesity Is Always and Everywhere an Insulin Phenomenon":

There is an interesting theoretical case in which chronically high insulin levels would be de-linked from obesity. Suppose the fat cells of someone caught in a carb rebound cycle became resistant to insulin, but his or her muscle cells retained their normal sensitivity to insulin. Because the fat cells would not respond much to the insulin signal telling them to take in glucose from the bloodstream and convert it into triglycerides and then fat, he or she would not gain much weight. But to keep blood glucose levels in line, insulin levels would have to go up even further to get the job done just from the muscle cell response to insulin. If high insulin levels cause most of the chronic diseases we associate with obesity, then while still normal in weight, he or she would be at risk for all of these chronic diseases. This is someone others might envy for being able to eat anything without gaining weight—right up until he or she died of a heart attack.  

The abstracts emphasize two results: 

  • Lifestyle changes that reduce obesity in experimental subjects also tend to reduce symptoms of diabetes.
  • Diabetes is correlated with obesity.

Both of these results are consistent with the idea that it is chronically high levels of insulin that tend to cause both obesity and diabetes, rather than obesity per se causing diabetes. There is a third result mentioned:

Although quite indirectly, if anything this supports the idea that sugar tends to cause diabetes.

E. Gary Taubes is at his most confused when discussing calories in/calories out. This is one of the first things I had to straighten out theoretically in my own mind after readings Gary's books. That effort is reflected in the title of my early foray into a Twitter discussion on diet: "How the Calories In/Calories Out Theory Obscures the Endogeneity of Calories In and Out to Subjective Hunger and Energy." In my view, two key channels through which high insulin makes people fat are

  1. making people hungry so they want to eat more and
  2. making people feel sluggish so they want to do less activity.

Keep that in mind as you read the following passage from Stephan:

Taubes upbraids the research community for its belief that body fatness is determined by calorie intake, rather than the impact of foods on insulin. He supports the latter proposition with semi-anecdotal observations from Africa suggesting that a group of people eating a high-sugar diet supplying “as little as sixteen hundred calories per day” were sometimes obese and diabetic.

A person who actually wants to get to the bottom of this question should conduct their investigation in a very different manner. The first order of business is to look up the relevant metabolic ward studies, which are the most tightly controlled diet studies available. These studies consistently show that calorie content is the only known food property that has a meaningful impact on body fatness. This is true across a wide range of carbohydrate-to-fat ratios and sugar intakes, and a correspondingly wide range of insulin levels (17).

What makes Taubes’s oversight so extraordinary is that he was involved in funding one of these metabolic ward studies, which compared two diets that differed more than tenfold in sugar content. The results showed that a 25 percent sugar, high-carbohydrate diet caused slightly more body fat loss than a 2 percent sugar, very-low-carbohydrate (ketogenic) diet of equal calories (18). Despite these clear and consistent findings, Taubes continues to insist that calorie intake is not an important determinant of body fatness, and he offers the reader questionable evidence in support of this while omitting high-quality evidence to the contrary. All while exuding righteous indignation about the scientific community’s misguided beliefs.

In a metabolic ward, the number of calories consumed is so tightly controlled that the first channel can't operate and the range of possible activity is probably less than normal, reducing the magnitude of the second effect. Unless a metabolic ward study is exceptionally high-powered, it may then be unable to detect the remaining effects on activity levels plus the reduction in resting metabolism that high insulin levels might lead to. 

On the low power of metabolic ward studies to identify effects, this quotation from the second flagged study is revealing:

  • Seventeen overweight or obese men were admitted to metabolic wards

The abstract of the first flagged study doesn't mention sample size at all, and the rest of the paper is still behind a paywall. (If funded by the government, I think it has to come out from behind its paywall a year or so after publication, which is in a couple of months.)

Gary Taubes' invocation of folks in Africa who sometimes become obese or diabetic on a diet of 1600 calories with a lot of sugar is only a research topic. I wouldn't dismiss the possibility too quickly, but it needs verification or disproof, perhaps with a study putting people on a 1600 calorie high-sugar diet for a longer period of time. If I were on a human subjects review panel, I don't know that I would approve such a study. If I am right about that, it speaks to people's beliefs (correct or not) that sugar is likely to be harmful. 

F. After scolding Gary for not recognizing the great interest diet scientists have had in hormones, including insulin, Stephan writes this about insulin and sugar:

In the final chapters of The Case Against Sugar, Taubes argues that insulin resistance is the primary cause of common noncommunicable diseases like coronary heart disease, diabetes, Alzheimer’s disease, and gout, and that sugar is the primary cause of insulin resistance (he goes out of his way to emphasize that dietary fat, calorie intake, and physical activity are irrelevant). The former proposition can be reasonably argued, while the latter is a case of Taubes cramming a square peg into a round hole. Taubes leans heavily on the animal literature, correctly stating that high intakes of refined sugar sometimes cause insulin resistance in rodent models. But he omits two inconvenient facts: First, sugar is not very fattening in rodents, particularly relative to added fats like lard; and second, added fats also tend to cause more severe insulin resistance than sugar (192021222324).

The combination of added fat and sugar is even more harmful than fat alone, and the most fattening and insulin-resistance-inducing diet of all is to give rodents free access to a variety of highly palatable human foods (2526). Sugar alone cannot remotely explain the effects of palatable human food on body fatness and health in rodents– or in humans– although it does contribute.

Let me emphasize that Stephan thinks the idea "that insulin resistance is the primary cause of common noncommunicable diseases like coronary heart disease, diabetes, Alzheimer’s disease, and gout ... can be reasonably argued." What Stephan questions is the role of sugar in causing insulin resistance. 

I am inclined to agree with Stephan that rodent data do not support the idea that sugar is more harmful than fat (though it does seem to support the idea that fat plus sugar is worse than fat alone). But I am struck by the possibility that rodents might be much better adapted to highcarb diets than humans are. This may even allow them to eat sugar with less harm than humans. Am I wrong in thinking that for many, many generations rodents outside laboratories have tended to eat highcarb diets? The "many, many generations" is important. Even if rodents had only been eating highcarb diets for the same number of years as humans, the larger number of generations per century would have allowed rodents that hang around humans to be naturally selected to tolerate highcarb diets more than long-generationed humans.

Every discipline tends to develop conventions that the best research that is feasible for the typical researcher should be treated with respect. But if the best experimental research that is feasible is studies on rodents that might be much better adapted to highcarb diets than humans and small-sample-size human studies, it shouldn't make it any more persuasive to those of us who are not acculturated diet scientists for them to say "This is the state of the art."

G. Stephan's next paragraph is consistent with my hypothesis that involuntary fasting protected the Hadza from Western Diseases despite their high sugar consumption:

The mechanism Taubes proposes for how sugar causes insulin resistance is that the fructose component, making up 50 percent of table sugar, overloads the liver, rendering it less sensitive to the insulin signal, and this eventually causes whole-body insulin resistance. Taubes is correct about the impact of fructose on the liver, although again he leaves out critical information: realistic doses of fructose primarily overload the liver if a person is overconsuming calories and liver energy stores are already full (25). This is probably why hunter-gatherer groups such as the Hadza can eat as much sugar as Americans and not develop health problems (2627). These facts do not fit Taubes’s narrative that calories are irrelevant, and they are not shared with the reader.

Of course, Stephan is emphasizing the number of calories consumed. But I think of the number of calories consumed as highly endogenous. Outside of metabolic wards—and a few people with freakishly strong self-control applied to a misguided task—the number of calories people consume (relative to how big they are) is mostly determined

  • by how active they are—or more generally, by how many calories they burn
  • by what types of food they eat 
  • by when they eat.

Because eating sugar or other high-insulin-index foods makes people feel hungry a couple of hours later, sugar helps induce the food overconsumption that in combination with the fructose from the sugar itself can overload the liver. 

H. One of my contentions has been that for a high fraction of people, chronically high insulin levels lead to obesity. Chronically high insulin levels also lead at a somewhat later stage to insulin resistance, which leads the body to amp up its insulin production. Although exercise is, in general, disappointing to people hoping it will lead to weight loss (see the article I linked to on my blog with the retitling "Julia Belluz and Javier Zarracina: Why You'll Be Disappointed If You Are Exercising to Lose Weight, Explained with 60+ Studies"), it is effective in averting or reducing the great danger of insulin resistance—and through averting insulin resistance averting more severe weight gain. Gary goes overboard in talking down the benefits of exercise. Leaving aside what he says here about calories (where I would definitely recast things) on exercise, I think Stephan is more on target than Gary when he writes:

Here are two other inconvenient facts that Taubes omits from his finely crafted narrative: Both sedentary behavior and overeating calories cause pronounced insulin resistance, and conversely, physical activity and eating fewer calories powerfully combat insulin resistance (28293031). Physical activity almost instantaneously increases the insulin sensitivity of muscle tissue, which is a major determinant of whole-body insulin sensitivity. Again, abundant evidence of this is only a few keystrokes away on Google Scholar, yet Taubes dismisses the idea out of hand.

I. After catching Gary in a serious misquotation, Stephan begins to wind down with this positive note:

In The Case Against Sugar, Taubes finally acknowledges the importance of food reward in eating behavior and obesity. As a reminder, food reward is the seductiveness of certain foods (like ice cream and chips) that motivates us to eat them, and as common sense suggests, it’s an important influence on what and how much we eat. Previously on his blog, Taubes argued at length that food reward has nothing to do with obesity, and (remarkably) that the brain itself is unimportant (33). In The Case Against Sugar, he argues that the seductiveness of sugar is precisely why we eat it, ultimately leading to obesity. He even briefly discusses dopamine, the chemical mediator of reward, acknowledging both the importance of food reward and the brain generally in food intake and obesity.  This is progress.

When people in the food industry want to redesign food to make it more attractive to us, one of the first things they usually do is to add sugar. But unlike Stephan, I don't think it is just about the immediate rewards of eating things with sugar in them. Those immediate rewards are there, and they matter. But in addition, sugar in any serious quantity causes an insulin spike that pushes blood sugar down below its normal range a little while later, leading to hunger. 

Conclusion. I learned a lot from reading Gary Taubes's books. But I am also grateful to Gary Taubes as providing part of the trail that led me to Jason Fung's The Obesity Code. Jason Fung's The Obesity Code is one of the five books I featured in "Five Books That Have Changed My Life." Where I think Gary Taubes's work has value added even given the existence of Jason Fung's work is in providing a much more detailed history of nutritional thought. I would love to read a comparably detailed history of nutritional thought by another author with a different point of view that was as engaging as Gary Taubes's books, but I don't know of any.  

Let me end by repeating the two things Gary Taubes convinced me of:

  • Sugar is very, very bad. 
  • What the nutrition establishment is telling us needs to be closely examined and cross-checked by scientists outside the nutrition establishment. 

Link to the Facebook discussion of this post

Don't miss these other posts on diet and health:

Also see the last section of "Five Books That Have Changed My Life."



John Locke and the Share of Land

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Sections 36-51 of John Locke's 2d Treatise on Government: “Of Civil Government” (the last half of Chapter V "Of Property") has one main theme: land by itself, without labor, produces relatively little. (You can see the text of those sections at the end of this post.) John Locke is at pains to minimize the importance of land by itself because the doubtful basis of the original ownership of land to which current legal ownership harks back is one of the weakest points of his effort to derive ownership of whatever is owned from people's ownership of themselves.

In the beginning of Chapter V, John Locke's case for a labor theory of property relies on land contributing relatively little to production relative to labor. The last half of Chapter V, though ostensibly repeating that message, also functions as an argument that land by itself is relatively unimportant, so that even if John Locke's labor theory of property has holes in it, the gravity of that flaw in his theory is not that great. 

There is one way in which John Locke is just wrong. As David Ricardo later pointed out, in crowded countries that have relatively low agricultural yields, land rents go up. This is of considerable practical relevance in the world today. The United Nations' Food and Agriculture Organization reports:

  • "Agriculture merely contributes 3 percent to global GDP
  • This is one third of the contribution a few decades ago
  • However, more than 25 percent of GDP is derived from agriculture in many least developed countries"

However, in countries with high-yielding advanced agriculture, John Locke is not too far off in the world today. Economists calculate "land's share of GDP" by looking at rents to land divided by GDP. The idea is that the amount people pay to rent land is a good guide to how valuable that land is in production.

However, total land rents as a share of GDP are a big overstatement of the implicit contribution of raw land to GDP. First, agricultural land is often improved by being cleared of trees and weeds, and sometimes by the digging of irrigation ditches.

Second, even leaving aside the value of the buildings directly on top, non-agricultural land is usually valuable because of its proximity to other buildings on land nearby and the people who are often in those buildings on land nearby. For many people, the most attractive thing in relation to residential land is to be like the Emperor of Japan: having a big open estate in the middle of a highly populated, commercially impressive city like Tokyo. To give an American example that is not literally about land, I have read that (at least in normal times) some of the most desirable offices in the country are tiny offices that happen to be close to the Oval Office in the White House. The realtor's motto of "Location, location, location" is not really about location itself but about relative location: what other buildings are you near to. The closest thing to an exception is beach property, but even beach property far from any populated area is of modest expense compared to otherwise unremarkable pieces of land in the heart of giant cities. 

To estimate raw land's share of GDP, I will overestimate by leaving in the productive value of improvements, but I will leave out the attraction of "location, location, location" relative to buildings on nearby land by applying the average rent of agricultural land to all the land in the Continental US plus Hawaii. In equilibrium, absent government subsidies or other government-induced distortion, most agriculture takes place on land that doesn't have a big urban location premium. So agricultural rents are a reasonable way to get closer to the value of land absent an urban location premium. One can get an upper bound on agricultural rents as a fraction of GDP by looking at the total agricultural share of GDP, which includes contribution of labor and capital as well. The graphs at the top give some idea there.

With all the ag econ departments in existence, I thought it would be easier to google up nice graphs of agricultural rent as a fraction of GDP, but it wasn't so easy. Here is where I got my rent per acre figures:

                                                                                 image source

                                                                                 image source

I will use this figure even for urban land in order to strip out the "location, location, location" part of urban land rents. I will use the term "agriculture-equivalent rent" for this imputation. 

Leaving out Alaska, where most of the land is unsuitable for agriculture (and so would have a very cheap rent for agricultural purposes), the US has about 1.9 billion acres total, based on this source. Let me approximate by treating the agriculture-equivalent rent in Alaska as zero and the agriculture-equivalent rent for the rest of the US as $140 an acre, based on the graph just above. Multiplying 1.9 billion acres by a rent of $140 per acre implies total agriculture-equivalent rent of $266 billion per year. Rounding down, nominal US GDP in 2012 was $16 trillion (see FRED), so agriculture-equivalent rent is about 1.7% of GDP. That is, indeed, a relatively small fraction of the value of GDP. 

Coda A. Given that the Second Treatise was published in 1689, John Locke deals well with the confusing fact that, while the rents of agricultural land are a small fraction of GDP, the purchase prices of agricultural land would be substantial relative to GDP. This is because ownership of a piece of land entitles one to the rents on that land for many years. John Locke didn't have the tools to talk clearly about the capitalized value of land relative to rents, but I interpret his discussion of the importance of money for land values as a gesture toward the capitalization of rents. He talks about the durability of money, but the real point is the durability of the land itself. (See below for all of this.)

According to William Larson of the Bureau of Economic Analysis, all US land was worth $23 trillion in current prices in 2009, which was 23/14.5 or about 159% of GDP in 2009. William Larson also writes that "Agricultural land is 47% of the total land area of the U.S., while consisting of 8% of its total value." That implies that agricultural land was worth about 13% of one year's worth of GDP in 2009. The value as a fraction of GDP will have fluctuated since then, but it is probably somewhere around there now.

Coda B. While the rents from raw land can be taxed away without distortion in Henry George fashion, it is not at all clear that the "location, location, location" portion of the urban land rent can be taxed without distortion, since it might discourage developers from trying to put together useful urban combinations. Note that this "location, location, location" portion of the rent is still distinct from the rent of the building on top of the land. Developers try to internalize the value of having buildings on land nearby by also owning the land nearby and building on it or otherwise developing it in ways they hope are appealing. To the extent they create some of the "location, location, location" value by making a piece of land an attractive location through building nearby, they should be rewarded for this activity. Taxing away the "location, location, location" value takes away that reward. 

Coda C. One of the things much scarcer and more expensive than land to be owned within an existing political system is land that is politically virgin land that would allow one to do a new political experiment without going through the cost of a rebellion. John Locke would be sympathetic to the desire for politically virgin land. Looking toward the future, there is the possibility that water, rock and metal from asteroids will enable people to construct space stations that can serve as politically virgin "land." If so, we may see more political experiments in the future. 

Don't miss other John Locke posts. Links at "John Locke's State of Nature and State of War." 

In particular, here are other John Locke posts about land and land ownership:

§. 36. The measure of property nature has well set by the extent of men’s labour and the conveniences of life; no man’s labour could subdue, or appropriate all; nor could his enjoyment consume more than a small part; so that it was impossible for any man, this way, to intrench upon the right of another, or acquire to himself a property to the prejudice of his neighbour, who would still have room for as good, and as large a possession (after the other had taken out his) as before it was appropriated. This measuredid confine every man’s possession to a very moderate proportion, and such as he might appropriate to himself, without injury to any body, in the first ages of the world, when men were more in danger to be lost, by wandering from their company in the then vast wilderness of the earth, than to be straitened for want of room to plant in. And the same measure may be allowed still without prejudice to any body, as full as the world seems: for supposing a man, or family, in the state they were at first peopling of the world by the children of Adam, or Noah; let him plant in some inland, vacant places of America, we shall find that the possessions he could make himself upon the measures we have given, would not be very large, nor, even to this day, prejudice the rest of mankind, or give them reason to complain, or think themselves injured by this man’s encroachment, though the race of men have now spread themselves to all the corners of the world, and do infinitely exceed the small number was at the beginning. Nay, the extent of ground is of so little value, without labour, that I have heard it affirmed, that in Spain itself a man may be permitted to plough, sow and reap, without being disturbed, upon land he has no other title to, but only his making use of it. But, on the contrary, the inhabitants think themselves beholden to him, who, by his industry on neglected, and consequently waste land, has increased the stock of corn, which they wanted. But be this as it will, which I lay no stress on; this I dare boldly affirm, that the same rule of propriety, (viz.) that every man should have as much as he could make use of, would hold still in the world, without straitening any body: since there is land enough in the world to suffice double the inhabitants, had not the invention of money, and the tacit agreement of men to put a value on it, introduced by consent, larger possessions, and a right to them; which, how it has done, I shall by and by shew more at large.

  §. 37. This is certain, that in the beginning, before the desire of having more than man needed had altered the intrinsic value of things, which depends only on their usefulness to the life of man: or had agreed that a little piece of yellow metal, which would keep without wasting or decay, should be worth a great piece of flesh, or a whole heap of corn; though men had a right to appropriate, by their labour, each one to himself, as much of the things of nature, as he could use: yet this could not be much, nor to the prejudice of others, where the same plenty was still left to those who would use the same industry. To which let me add, that he, who appropriates land to himself by his labour, does not lessen, but increase the common stock of mankind: for the provisions serving to the support of human life, produced by one acre of inclosed and cultivated land, are (to speak much within compass) ten times more than those which are yielded by an acre of land of an equal richness lying waste in common. And therefore he that incloses land, and has a greater plenty of the conveniences of life from ten acres, than he could have from an hundred left to nature, may truly be said to give ninety acres to mankind: for his labour now supplies him with provisions out of ten acres, which were but the product of an hundred lying in common. I have here rated the improved land very low, in making its product but as ten to one, when it is much nearer an hundred to one: for I ask, whether in the wild woods and uncultivated waste of America, left to nature, without any improvement, tillage or husbandry, a thousand acres yield the needy and wretched inhabitants as many conveniences of life, as ten acres of equally fertile land do in Devonshire, where they are well cultivated.

 Before the appropriation of land, he who gathered as much of the wild fruit, killed, caught, or tamed, as many of the beasts, as he could; he that so employed his pains about any of the spontaneous products of nature, as any way to alter them from the state which nature put them in, by placing any of his labour on them, did thereby acquire a propriety in them: but if they perished, in his possession, without their due use; if the fruits rotted, or the venison putrified, before he could spend it, he offended against the common law of nature, and was liable to be punished; he invaded his neighbour’s share; for he had no right farther than his use called, for any of them, and they might serve to afford him conveniences of life.

  §. 38. The same measures governed the possession of land too: whatsoever he tilled and reaped, laid up and made use of, before it spoiled, that was his peculiar right; whatsoever he enclosed, and could feed, and make use of, the cattle and product was also his. But if either the grass of his inclosure rotted on the ground, or the fruit of his planting perished without gathering, and laying up, this part of the earth, notwithstanding his inclosure, was still to be looked on as waste, and might be the possession of any other. Thus, at the beginning, Cain might take as much ground as he could till, and make it his own land, and yet leave enough to Abel’s sheep to feed on; a few acres would serve for both their possessions. But as families increased, and industry enlarged their stocks, their possessions enlarged with the need of them; but yet it was commonly without any fixed property in the ground they made use of, till they incorporated, settled themselves together, and built cities; and then, by consent, they came in time, to set out the bounds of their distinct territories, and agree on limits between them and their neighbours; and by laws within themselves, settled the properties of those of the same society: for we see, that in that part of the world which was first inhabited, and therefore like to be best peopled, even as low down as Abraham’s time, they wandered with their flocks, and their herds, which was their substance, freely up and down; and this Abraham did, in a country where he was a stranger. Whence it is plain, that at least a great part of the land lay in common; that the inhabitants valued it not, nor claimed property in any more than they made use of. But when there was not room enough in the same place, for their herds to feed together, they by consent, as Abraham and Lot did, Gen. xiii. 5. separated and enlarged their pasture, where it best liked them. And for the same reason Esau went from his father, and his brother, and planted in mount Seir, Gen. xxxvi. 6.

  §. 39. And thus, without supposing any private dominion, and property in Adam, over all the world, exclusive of all other men, which can no way be proved, nor any one’s property be made out from it; but supposing the world given, as it was, to the children of men in common, we see how labour could make men distinct titles to several parcels of it, for their private uses; wherein there could be no doubt of right, no room for quarrel.

  §. 40. Nor is it so strange, as perhaps before consideration it may appear, that the property of labour should be able to over-balance the community of land: for it is labourindeed that puts the difference of value on every thing; and let any one consider what the difference is between an acre of land planted with tobacco or sugar, sown with wheat or barley, and an acre of the same land lying in common, without any husbandry upon it, and he will find, that the improvement of labour makes the far greater part of the value. I think it will be but a very modest computation to say, that of the products of the earth useful to the life of man, nine-tenths are the effects of labour: nay, if we will rightly estimate things as they come to our use, and cast up the several expences about them, what in them is purely owing to nature, and what to labour, we shall find, that in most of them ninety-nine hundredths are wholly to be put on the account of labour.

  §. 41. There cannot be a clearer demonstration of any thing, than several nations of the Americans are of this, who are rich in land, and poor in all the comforts of life; whom nature having furnished as liberally as any other people, with the materials of plenty, i. e.a fruitful soil, apt to produce in abundance, what might serve for food, raiment, and delight; yet for want of improving it by labour, have not one hundredth part of the conveniences we enjoy; and a king of a large and fruitful territory there, feeds, lodges, and is clad worse than a day-labourer in England.

  §. 42. To make this a little clearer, let us but trace some of the ordinary provisions of life through their several progresses, before they come to our use, and see how much they receive of their value from human industry. Bread, wine and cloth, are things of daily use, and great plenty; yet notwithstanding, acorns, water and leaves, or skins, must be our bread, drink and cloathing, did not labour furnish us with these more useful commodities: for whatever bread is more worth than acorns, wine than water, and clothor silk, than leaves, skins or moss, that is wholly owing to labour and industry; the one of these being the food and raiment which unassisted nature furnishes us with; the other, provisions which our industry and pains prepare for us, which how much they exceed the other in value, when any one hath computed, he will then see how much labour makes the far greatest part of the value of things we enjoy in this world: and the ground which produces the materials, is scarce to be reckoned in, as any, or at most, but a very small part of it; so little, that even amongst us, land that is left wholly to nature, that hath no improvement of pasturage, tillage, or planting, is called, as indeed it is, waste; and we shall find the benefit of it amount to little more than nothing.

  This shews how much numbers of men are to be preferred to largeness of dominions; and that the increase of lands, and the right employing of them, is the great art of government: and that prince, who shall be so wise and godlike, as by established laws of liberty to secure protection and encouragement to the honest industry of mankind, against the oppression of power and narrowness of party, will quickly be too hard for his neighbours: but this by the by. To return to the argument in hand,

  §. 43. An acre of land, that bears here twenty bushels of wheat, and another in America, which with the same husbandry, would do the like, are, without doubt, of the same natural intrinsic value: but yet the benefit mankind receives from one in a year, is worth 5l. and from the other possibly not worth a penny, if all the profit an Indian received from it were to be valued and sold here; at least I may truly say, not one thousandth. It is labour then which puts the greatest part of value upon land, without which it would scarcely be worth any thing: it is to that we owe the greatest part of all its useful products; for all that the straw, bran, bread, of that acre of wheat, is more worth than the product of an acre of as good land, which lies waste, is all the effect of labour: for it is not barely the ploughman’s pains, the reaper’s and thresher’s toil, and the baker’s sweat, is to be counted into the bread we eat; the labour of those who broke the oxen, who digged and wrought the iron and stones, who felled and framed the timber employed about the plough, mill, oven, or any other utensils, which are a vast number, requisite to this corn, from its being seed to be sown to its being made bread, must all be charged onthe account of labour, and received as an effect of that: nature and the earth furnished only the almost worthless materials, as in themselves. It would be a strange catalogue of things, that industry provided and made use of, about every loaf of bread, before it came to our use, if we could trace them; iron, wood, leather, bark, timber, stone, bricks, coals, lime, cloth, dying drugs, pitch, tar, masts, ropes, and all the materials made use of in the ship, that brought any of the commodities made use of by any of the workmen, to any part of the work; all which it would be almost impossible, at least too long to reckon up.

  §. 44. From all which it is evident, that though the things of nature are given in common, yet man, by being master of himself, and proprietor of his own person, and the actions or labour of it, had still in himself the great foundation of property; and that, which made up the great part of what he applied to the support or comfort of his being, when invention and arts had improved the conveniences of life, was perfectly his own, and did not belong in common to others.

  §. 45. Thus labour, in the beginning, gave a right of property, wherever any one was pleased to employ it upon what was common, which remained a long while the far greater part, and is yet more than mankind makes use of. Men, at first, for the most part, contented themselves with what unassisted nature offered to their necessities; and though afterwards, in some parts of the world, (where the increase of people and stock, with the use of money, had made land scarce, and so of some value) the several communitiessettled the bounds of their distinct territories, and by laws within themselves regulated the properties of the private men of their society, and so, by compact and agreement, settled the property which labour and industry began; and the leagues that have been made between several states and kingdoms, either expressly or tacitly disowning all claim and right to the land in the other’s possession, have, by common consent, given up their pretences to their natural common right, which originally they had to those countries, and so have, by positive agreement, settled a property amongst themselves, in distinct parts and parcels of the earth; yet there are still great tracts of ground to be found, which (the inhabitants thereof not having joined with the rest of mankind, in the consent of the use of their common money) lie waste, and are more than the people who dwell on it do, or can make use of, and so still lie in common; though this can scarce happen amongst that part of mankind that have consented to the use of money.

  §. 46. The greatest part of things really useful to the life of man, and such as the necessity of subsisting made the first commoners of the world look after, as it doth the Americans now, are generally things of short duration; such as, if they are not consumed by use, will decay and perish of themselves: gold, silver, and diamonds, are things that fancy or agreement hath put the value on, more than real use, and the necessary support of life. Now of those good things which nature hath provided in common, every one had a right (as hath been said) to as much as he could use, and property in all that he could effect with his labour; all that his industry could extend to, to alter from the state nature had put it in, was his. He that gathered a hundred bushels of acorns or apples, had thereby a property in them, they were his goods as soon as gathered. He was only to look, that he used them before they spoiled, else he took more than his share, and robbed others. And indeed it was a foolish thing, as well as dishonest, to hoard up more than he could make use of. If he gave away a part to any body else, so that it perished not uselessly in his possession, these he also made use of. And if he also bartered away plums, that would have rotted in a week, for nuts that would last good for his eating a whole year, he did no injury; he wasted not the common stock; destroyed no part of the portion of goods that belonged to others, so long as nothing perished uselessly in his hand. Again, if he would give his nuts for a piece of metal, pleased with its colour; or exchange his sheep for shells, or wool for a sparkling pebble or a diamond, and keep those by him all his life, he invaded not the right of others, he might heap up as much of these durable things as he pleased: the exceeding of the bounds of his just property not lying in the largeness of his possession, but the perishing of any thing uselessly in it.

  §. 47. And thus came in the use of money, some lasting thing that men might keep without spoiling, and that by mutual consent men would take in exchange for the truly useful, but perishable supports of life.

  §. 48. And as different degrees of industry were apt to give men possessions in different proportions, so this invention of money gave them the opportunity to continue and enlarge them: for supposing an island, separate from all possible commerce with the rest of the world, wherein there were but an hundred families, but there were sheep, horses, and cows, with other useful animals, wholsome fruits, and land enough for corn for a hundred thousand times as many, but nothing in the island, either because of its commonness, or perishableness, fit to supply the place of money; what reason could any one have there to enlarge his possessions beyond the use of his family, and a plentiful supply to its consumption, either in what their own industry produced, or they could barter for like perishable, useful commodities with others? Where there is not some thing, both lasting and scarce, and so valuable to be hoarded up, there men will be apt to enlarge their possessions of land, were it never so rich, never so free for them to take: for I ask, what would a man value ten thousand, or an hundred thousand acres of excellent land, ready cultivated, and well stocked too with cattle, in the middle of the inland parts of America, where he had no hopes of commerce with other parts of the world, to draw money to him by the sale of the product? It would not be worth the inclosing, and we should see him give up again to the wild common of nature, whatever was more than would supply the conveniences of life to be had there for him and his family.

  §. 49. Thus in the beginning all the world was America, and more so than that is now; for no such thing as money was any where known. Find out something that hath the use and value of money amongst his neighbours, you shall see the same man will begin presently to enlarge his possessions.

  §. 50. But since gold and silver, being little useful to the life of man in proportion to food, raiment, and carriage, has its value only from the consent of men, whereof labour yet makes, in great part, the measure, it is plain, that men have agreed to a disproportionate and unequal possession of the earth, they having, by a tacit and voluntary consent, found out a way how a man may fairly possess more land than he himself can use the product of, by receiving in exchange for the overplus gold and silver, which may be hoarded up without injury to any one; these metals not spoiling or decaying in the hands of the possessor. This partage of things in an inequality of private possessions, men have made practicable out of the bounds of society, and without compact, only by putting a value on gold and silver, and tacitly agreeing in the use of money: for in governments, the laws regulate the right of property, and the possession of land is determined by positive constitutions.

  §. 51. And thus, I think, it is very easy to conceive, without any difficulty, how labour could at first begin a title of property in the common things of nature, and how the spending it upon our uses bounded it. So that there could then be no reason of quarrelling about title, nor any doubt about the largeness of possession it gave. Right and conveniency went together; for as a man had a right to all he could employ his labour upon, so he had no temptation to labour for more than he could make use of. This left no room for controversy about the title, nor for incroachment on the right of others; what portion a man carved to himself was easily seen; and it was useless, as well as dishonest, to carve himself too much, or take more than he needed.

Robert Barro: Tax Reform Will Pay Growth Dividends

                                          Link to the op-ed above

                                          Link to the op-ed above

I wrote about the possible effects of the December 2017 tax reform on capital accumulation in "The Real Test of the December 2017 Tax Reform Will Be Its Long-Run Effect." In this post, I am writing about the possible effects on labor hours.

This division of the discussion follows Robert Barro's. In "Tax Reform Will Pay Growth Dividends
The effects will be even larger thanks to last-minute cuts in marginal individual rates," he writes:

In a November letter to Treasury Secretary Steven Mnuchin, eight other economists and I argued that the bill’s corporate tax provisions would increase business investment and expand the economy. But what about the changes to the individual tax code? 

Here is the heart of Robert's claims:

The Tax Policy Center estimates that the weighted-average marginal tax rate from individual income and payroll taxes will fall in 2018 by 3.2 percentage points. By comparison, the cuts were 4.5 points from 1986-88 in the Reagan reform, 3.6 points from 1963-65 in the Kennedy-Johnson tax reduction, and 2.1 points from 2002-03 in the George W. Bush reform.

Moreover, the Tax Policy Center finds that marginal tax rates in 2018 will drop for taxpayers across the income distribution. Most cuts are near 3 percentage points, with the smallest being zero for incomes below $10,000 and 0.6 point for incomes between $500,000 and $1,000,000.

My research with Charles Redlick, published in 2011 by the Quarterly Journal of Economics, suggests that cutting the average marginal tax rate for individuals by 1 percentage point increases gross domestic product by 0.5% over the next two years. This means the tax bill’s average cut of 3.2 points should expand the economy by 1.6% through 2019, or extra growth of 0.8% a year. This growth effect is temporary, but what it adds to the level of GDP is permanent.

In line with standard economic theory, Robert is arguing that a reduced distortion in the labor market due to lower marginal tax rates is likely to increase the total amount that people work. The key mechanism is that with less of every extra dollar earned taken by taxes, people will be willing to work more even if they don't get a raise. With people willing to work more even if they don't get a raise, wage pressures will be muted and the Fed can afford to keep interest rates lower than it otherwise would, leading to higher GDP. 

How long does it take for the increase in employment and labor hours to happen? As I discussed in "The Real Test of the December 2017 Tax Reform Will Be Its Long-Run Effect," capital accumulation is painfully slow. By contrast, changes in employment and labor hours can happen relatively quickly. Robert suggests that adjustments in employment and labor hours would take about two years, which seems reasonable to me. 

How big is the effect? To get the total amount of extra work that people do, Robert is multiplying two numbers:

  • An estimate of the semi-elasticity of GDP with respect to reductions in the average marginal tax rate: .5
  • An estimate of the reduction in the average marginal tax rate: 3.2 percentage points

This leads to estimate of the overall increase in GDP of 1.6%. Spread out over a two-year adjustment period, that raises the growth rate of GDP by .8% over each of two years. (Of course, the extra growth wouldn't really be equal in both years. It might be tilted toward the second of the two years, since there is a lag in the effect of monetary policy.)

How reasonable is the estimate of how much a one percentage point reduction in the tax rate raises GDP? Here, I think making things as simple and transparent as possible is helpful. Let me use a toy model so simple that I can figure out a semi-elasticity of GDP with respect to reductions in the marginal tax rate in just a few lines. I will use "h" to represent the fraction an extra dollar of pay that a worker takes home. That is, 

h = 1 - marginal tax rate.

If there is monopolistic competition in the picture

h = (1- marginal tax rate)/(1 + markup)

This marginal tax rate doesn't have to equal the average tax rate, and so h doesn't have to have any particular relationship to government purchases G. 

Here are the key simplifications:

  • There are no distortions other than the marginal tax rate and the markup. The economy is otherwise frictionless. The effect of the Fed getting the economy to its new natural level of employment, hours and output by appropriate monetary policy is approximated by using a model in which the economy is always at the natural level of employment, hours and output because prices adjust instantly.
  • Workers get to choose the number of hours they work, given their wage.
  • There is no capital and no investment. This means that all effects involving capital accumulation are ignored. It also means that the effect of a 1% increase in total amount people work is overestimated because the fact that they are more likely to be fighting to use the same tools at the same time and more crowded in the office is ignored. 
  • Hours go up by an equal percentage for each worker rather than additional people being employed. Since I will use an estimate of the labor supply elasticity based only on increases in hours for a given worker, this tends to underestimate the total increase in amount worked. There is no need to assume that everyone is identical. The model still works fine if some people have, say, the productivity of two people and have each of their hours counted as two hours, and so earn twice the wage. Also, though not an exact result, if people's marginal tax rates differ, the concept of an average marginal tax rate is meant to give a good approximation to the right result when plugged into a model where people's marginal tax rates are all the same. 
  • I will use a consumption-constant labor supply elasticity of 1. This is is close to the Frisch elasticity Matthew Shapiro and I found in “Labor Supply: Are the Income and Substitution Effects Both Large or Both Small?" but below the consumption-constant labor supply elasticity we found there. (This is a paper I mentioned in my first post on this blog "What is a Supply-Side Liberal?")
  • The income and substitution effects for labor supply cancel.  What I mean by this is that—holding the number of hours per week fixed—a worker requires a wage 1% higher when the worker's consumption is 1% higher. Barring other unreasonable assumptions, something close to this assumption is needed in order to avoid the implication that the large increase in wages over most of the 20th century should have resulted in huge changes in weekly work hours that we don't see.

Note that the intertemporal aspects of the utility function don't matter, because there is no way for the economy to transfer resources intertemporally anyway. So the utility function can be represented simply as

log(C) - N2/2

C is consumption. N is total amount worked. N is measured in units so that if government purchases were zero and h = 1, the total amount worked would be equal to 1. Each unit of labor produces one unit of output. Since there is no investment, 

N = Y = C+G,

where Y is GDP and G is government purchases. From here on, I will just use N, but it is important to remember that Y = N in this simple model. 

If there is no markup, the pre-tax wage will be equal to the marginal product of 1. If there is a markup, the pre-tax wage will be 1/(1+markup). Whether there is a markup or not, the after-tax wage will be equal to h. With the worker choosing herhis hours, the after tax wage will equal the reservation wage for one extra hour. The reservation wage for an extra hour is equal to the marginal disutility of a little extra work—which for the utility function above is equal to N—divided by the marginal utility of a little extra consumption—which for the utility function above is equal to 1/C. That makes the reservation wage equal to N/(1/C) = CN. Setting the reservation wage for an extra hour equal to the after-tax wage, 

CN = h

Now, combine C = N - G from the equation  N =Y = C+G above with CN = h to get the quadratic equation

N2 - GN - h = 0

To get a starting point at which to calculate a semi-elasticity, take G = .2 and h = .8. Then, at this starting point, 

N2 - .2 N - .8 = 0

This has the solutions N = 1 and N = -.8. Only the solution N=1 makes sense. So this is the starting level of labor for this numerical example. Actually, you can fairly easily show that if G = 1-h, then the positive solution for N is equal to 1. (In particular, if G = 0 and h = 1, then N=1.)

To find the semi-elasticity of N (equal to GDP) with respect to h, take the total differential of 

N2 - GN - h = 0

The total differential is

(2N – G) dN – N dG - dh = 0. 

If government purchases G stay the same, dG = 0, and one can solve for the semi-elasticity in general and then plug in the starting values of N=1 and G=.2. 

(1/N) dN/dh = 1/[N(2N-G)] = 1/1.8 = .556

This is in the same ballpark as the estimate that Robert Barro uses. There are offsetting positive and negative biases relative to a more complex model. So the bottom line is that the semi-elasticity estimate Robert uses can be questioned, but is reasonable. 

How reasonable is the Tax Policy Center's estimate of the reduction in the average marginal tax rate from the December 2017 tax reform? I don't know the answer to this, but at this point I have no reason to doubt their estimate. I would be interested in any criticisms readers have of the Tax Policy Center's estimate of the effect of the tax reform on average marginal tax rates. 


Stop Counting Calories; It's the Clock that Counts

                                                          Link to the article above

                                                          Link to the article above

My title comes from the first words in Sumathi Reddy's Wall Street Journal article shown above. Sumathi writes:

Stop counting calories. It’s the clock that counts.

That’s the concept behind time-restricted feeding, or TRF, a strategy increasingly being studied by researchers as a tool for weight-loss, diabetes prevention and even longevity.

Sumathi goes on to detail this approach and the accumulating evidence that it works.

The idea is simple: keep your "eating window" within a day down to a certain number of hours. This is a strategy that Jason Fung emphasizes in his powerful book The Obesity Code, which I try to distill into a blog post in "Obesity Is Always and Everywhere an Insulin Phenomenon."

Sumathi talks about a 12-hour eating window. Some people may get good results from an eating window of this length, but many people will need to restrict their food intake to a shorter window to get good results. Let me give my sense of things this way: in explaining the rise of obesity in the population as a whole, the two things that have the right timing are the rise of sugar and the lengthening of the eating window in a typical person's day. If, 120 years ago, many people ate breakfast at 8 AM and dinner at 6 PM, that is a little over a 10-hour eating window and well within a 12-hour eating window. Now it is common for many people to eat from soon after they wake up to right before they go to bed, somewhere around a 16-hour eating window. The rise in sugar consumption is less speculative; the data are better:

                                                                                       image source

                                                                                       image source

Based on this history, I suspect that for most people, avoiding all sugar and restricting food intake to 12 hours every day from childhood on is enough to avoid becoming obese in the first place. But prevention is much easier than cure. For those who are already overweight or obese, and have become insulin resistant, losing weight and restoring health might require avoiding even sugar-free carbs that are high on the insulin index, and restricting the eating window to something considerably shorter than 12 hours. (On insulin resistance and the insulin index, see "Obesity Is Always and Everywhere an Insulin Phenomenon" and "Forget Calorie Counting; It's the Insulin Index, Stupid.)

Personally, although I think I could keep my weight steady with an 8-hour eating window, I need something shorter in order to lose weight. In my experience, as long as I only eat foods low on the insulin index during the eating window, even going 20 to 21 hours between a 3- or 4-hour eating window each day is not at all painful. Any hunger I experience is mild and non-insistent hunger. What hunger I do experience is usually from thinking about food. And for the most part, I don't think about food because I am hungry, I am hungry because I thought about food for some other reason.  

Eating this way for a while has two effects. On the one hand, for the same practices, weight loss gets tougher when your weight it lower to begin with. On the other hand, eating food that is low on the insulin index during your eating window gets a lot easier over time, and assuming you do that, over time it gets easier to go substantial periods with no food—"fasting"—without any substantial disutility. With fasting, "No pain, no gain" takes on a totally different meaning. If you do it right by eating well during your eating window, there is no pain in fasting, and you won't gain any weight while you are fasting!

When I first started on this program, I hated the idea of an "eating window." Both for theoretical reasons (see "Obesity Is Always and Everywhere an Insulin Phenomenon") and my own idiosyncratic reaction to particular rules, I liked the idea of length of time fasting as the thing to shoot for. But after a month or two, I came to terms with the fact that, logically, if you are eating every day, there is a very close mathematical relationship between the average length of the eating window and the average length of time fasting between the eating window one day and the eating window the next.

Of course, if there are some days when you don't eat at all (which can be quite a reasonable thing to do, and is also not as hard as you might guess–see "Obesity Is Always and Everywhere an Insulin Phenomenon"), then that mathematical relationship doesn't hold. When you skip eating for a whole day, it is cognitively easier to think about the length of the fast than the length of the eating window. But during periods of time when you are eating at least once a day, focusing on the length of your eating window is a perfectly good way to think about things. 

There are three ideas that I keep reminding myself and others that keep the program I am following from seeming too abstemious and severe.

First, dietary fat is good, not bad. I have a post specifically on this: "Jason Fung: Dietary Fat is Innocent of the Charges Leveled Against It." And the message that dietary fat is good, not bad comes through clearly if you read "Forget Calorie Counting; It's the Insulin Index, Stupid." Knowing that foods such as olive oil, butter, cheese, cream, cashews, macadamia nuts and sugar-free bacon are great goes a long, long way toward making up for the sugar, bread, potatoes and rice that I have given up. Because I also treat meat as fine in moderation, it is easy to get a good restaurant meal. 

Second, because foods that are low on the insulin index are quite satiating per calorie (especially those with significant dietary fat), if you have a reasonably short eating window, you don't have to restrict quantity at all. If you overeat much at all, you will feel uncomfortably overfull afterwards, and you are unlikely to want to do that again. By contrast, sugar or other easily-digestible carbs have a way of making you hungry so you want to eat more and more and more; eating any substantial amount of sugar or other easily digestible carbs makes it very, very easy to overeat badly. 

Third, though some people try to make systems, I love the fact that I don't need to do things in any regular way. If it is convenient to go for a long time without eating, I can do that. If I want to shift the timing of my eating window, that is fine. If it is convenient to do a longer eating window on some particular day, that is fine. Things average out. Indeed, holding the average length of the fasts fixed, it may well be more effective to have a long fast and a short fast than to have two fasts of equal length. So irregularity may well be a good thing, as long as the overall rigor of your program is reasonably high. Some of this is speculative; the experiments have not all been done. But the theory I discuss in "Obesity Is Always and Everywhere an Insulin Phenomenon" (following Jason Fung's The Obesity Code) gives no reason to think that smoothing out the timing of your eating windows is important. Most people will get encouraging results from eating windows of 4 hours (one big leisurely meal) or 8 hours (two meals as big as you want with healthy things) every day, even if they vary the timing and jump back and forth between the 4-hour and 8-hour eating windows.  

Many people worry that if they try a diet, it might backfire. That is, they could end up yo-yoing back up to an even higher weight than where they started. The scary evidence so far that says most diets backfire does not yet include a regimen relying on substantial periods of time with zero food and fairly strictly avoiding all foods that are high on the insulin index during eating windows. In predicting what that evidence will look like when it is systematically gathered, I am reassured by two things:

  • I am not suffering at all. No intrusive, onerous hunger; plenty of fun food to eat. 
  • Everyone agrees that while you are eating zero food, it will tend to bring your weight down. Hence, it seems to me that some dosage of fasting will do the trick to maintain my weight or to lose weight. I can't guarantee in advance what that dosage will be, but if I am determined to do whatever it takes, what it takes won't be so bad. 

For those who don't read Sumathi's article in its entirety, here are some key passages:

1. The findings, published in the journal Cell Metabolism, showed that when eight overweight people who naturally ate for 15-plus hours a day restricted their eating to a 10-hour window for 16 weeks, they lost 4% of their weight. A year later, they reported sticking to the plan, even though they didn’t have to, and had kept the weight off.

“All of them said they slept better, and they felt more energetic throughout the day,” said Dr. [Satchidananda] Panda. “They were actually feeling less hungry.”

TRF studies of mice—which provide the bulk of research on the strategy—have found that the body, when fasting for half a day or more, has more time to produce the components for cellular repair, break down toxins and coloring agents in food, and repair damaged DNA in the skin and stomach lining, according to Dr. Panda. There is also some evidence that TRF 

2. “Many patients have gone off of blood-pressure medications,” [Dr. Julie Shatzel] said. “In some cases, I’ve seen the reversal of prediabetes.”

3. “Both improved their glycemia responses,” Dr. [Leonie] Heilbronn said, referring to the effect food has on blood sugar levels. While the men lost weight, she said, it wasn’t enough to account for the improved glucose levels. “There’s something else going on that’s not just driven by weight change,” she said.

4. “I think the real power of TRF is the simplicity of it,” [Dr. Krista Varady] said.

Don't miss these other posts on diet and health:

Also see the last section of "Five Books That Have Changed My Life."

Sam Brown and Miles Kimball on Teleotheism

I had a very interesting email discussion with Sam Brown about my sermon "Teleotheism and the Purpose of Life." I am grateful for Sam's willingness to have me post that discussion here and his help in putting together the edited version of that discussion below. To see the text of the sermon, in addition to this link to the text of "Teleotheism and the Purpose" of Life," you can also find it by googling the word "teleotheism." Alternatively, there is a video of me delivering the sermon at "Live: Teleotheism and the Purpose of Life."

Sam: I’m working on a theology book, and am grappling a bit with emergentism, within which “teleotheism” may play a role as an alternative framing for the phenomenon of interest. When I google that phrase, it mostly comes back to a sermon you preached a few years back. It seems to have developed a currency among some Mormon intellectuals, but I can’t tell whether that’s a term you coined or whether it has a longer pedigree. Primarily, I’m wanting to know how best to cite it.

Miles: It is great that you are doing a book on theology. I am delighted that other Mormons are talking about teleotheism. Are they aware of my sermon "Teleotheism and the Purpose of Life

I did not coin the term. I give its origins in my post "Leaving a Legacy." There I write:

As for the origin and history of the word "Teleotheism," when I wrote the Unitarian-Universalist sermon "Teleotheism and the Purpose of Life," I googled to find the preexisting word "Teleotheism" from the post "Talk:-ism."

I should note that I have sections for religion posts and inspirational posts before 2017 in my organized bibliography of key posts. From 2017 on, my "Religion, Humanities & Science" subblog is the best place to to find them. 

There is a sense in which "teleotheism" as I use the term doesn't amount to much of a theology. It boils down to saying "Let's build something wonderful and call it God." I have been most interested in teleotheism as an approach to homiletics and devotion (e.g., my post "The Book of Uncommon Prayer") for unbelievers, within an assumption of nonsupernaturalism. 

In addition to my sermons, you might be especially interested in "What If Jesus Was Really Resurrected?" and "The Teleotheistic Achievement of the New Testament." 

Sam: I think it fits well with a somewhat religious existentialism that leans on the emergence theologies in an echo of process theologies. In a modern secularist register, it’s a new take on Swedenborg’s Maximus Homo (and, frankly, the zodiacal body that it gently remembers). While I’m personally a somewhat classical theist, I think theist and non-theist alike could benefit from thinking about the beautiful things/processes/realities/phenomena that can come into being as we work together in tender mutual regard. I think Mormonism provides a useful backbone for many of those meditations across the spectrum of belief. My inference from my own googling and your response is that you’re really the popularizer of that term. Other than that odd list of -theisms, I really don’t see it used elsewhere. So I’m going to call it a Miles Kimball thing, unless you object. I’ll cite that main sermon of yours on the topic.

Miles: Thanks, Sam. That sounds great. A footnote that I got the term from a list is sufficient for accuracy. I am honored if I am the popularizer. 

By the way, I definitely think of my teleotheism as coming from my Mormon roots. It is obviously influenced by the idea of eternal progression. Also, there is the question of where the first gods came from, which is obviously raised by the succession of gods implied by Mormon theology. I addressed that most directly in "What If Jesus Was Really Resurrected?"

Even "nonsupernaturalism" is a way that many Mormons think of their theology: "God acts according to natural law." I am saying that, but identifying my posited natural law more closely with the currently believed laws of physics: What Do You Mean by "Supernatural"?

Sam: Thanks. Yeah, I'm playing with these ideas in an essay that's in press at Dialogue. I argue that the True Light is Smith's take on this question. I think this is more than Spinozist Law, even as I agree with you that many Mormons have been surprisingly Spinozist in their interpretation of it.

Fascinating sets of questions.

Miles: The sense in which I am still a believer in Mormonism is this: I believe Mormonism has an important teleotheistic role to play. Mormonisms's flaws, such as its treatment of women, gays and intellectuals, are counteracted by other powerful forces in our culture. Mormonism's strengths, such as those I write about in 

are not that easy to find in full elsewhere. These strengths of Mormonism are an important part of building Zion, just as equality for women, acceptance of sexual diversity and respecting vigorous debate from all corners as a key part of the process for discovering truth are important parts of building Zion. 

Sam: I am afraid I didn't get curious about the origins of “teleotheism” until after the Dialogue piece was already in galleys. I'll incorporate reference to your sermon into the book, though. I appreciate the thoughtful work you've done in this area.

By the way, I wonder whether you have read Richard Kearney's God Who May Be. Seems like it might be apropos here. Also, Adam Miller's book Future Mormon basically does a variant of teleotheism in a framework he borrows from Bruno Latour. I’m not sure what you think of Latour (I confess that I'm unpersuaded), but may be of interest. 

Miles: Those sound interesting. Thanks for the recommendation.

Sam: I've done some more thinking about this topic in the meantime that has made me more skeptical of the rigor and explanatory utility of teleotheism.

Miles: Remember that I myself wrote to you:

There is a sense in which teleotheism as I use the term doesn't amount to much of a theology. It boils down to saying "Let's build something wonderful and call it God." 

I have been most interested in teleotheism as an approach to homiletics and devotion (e.g. ) for unbelievers, within an assumption of nonsupernaturalism. 

I doubt your view of teleotheism is more skeptical than that!

Sam: I should have mentioned that I think teleotheism is probably the best of the truly materialist options, so in saying I doubt the horse can run, I'm probably making a broader claim than just that teleotheism is inadequate (at least insofar as it's a purely materialist proposal).

The Real Test of the December 2017 Tax Reform Will Be Its Long-Run Effect

                                     Link to the article above

                                     Link to the article above

The Solow Growth Model is a mainstay of intermediate macroeconomics classes. A key lesson of the Solow Growth Model is that if the net marginal product of capital is above the growth rate of the economy, increasing the share of output devoted to investment can raise the long-run quantity of goods available for consumption. 

As a cut in corporate taxes, the recent tax reform is intended (among other things) as a cut in the effective rate of taxation of capital formation through investment. (As examples of capital formation through investment, think of building factories or writing software.) Thus, it is hoped that it will raise the share of GDP devoted to investment now, leading to a higher capital stock later than what the path of the capital stock would otherwise be. 

It is important to realize how slow this process is. In "The Medium-Run Natural Interest Rate and the Short-Run Natural Interest Rate" I wrote:

Introductory macroeconomics classes make heavy use of the concepts of the "short run” and the “long run.” To think clearly about economic fluctuations at a somewhat more advanced level, I find I need to use these four different time scales:

  • The Ultra Short Run: the period of about 9 months during which investment plans adjust–primarily as existing investment projects finish and new projects are started–to gradually bring the economy to short-run equilibrium. 
  • The Short Run: the period of about 3 years during which prices (and wages) adjust gradually bring the economy to medium-run equilibrium.
  • The Medium Run: the period of about 12 years during which the capital stock adjusts gradually to bring the economy to long-run equilibrium. 
  • The Long Run: what the economy looks like after investment, prices and wages, and capital have all adjusted. In the long run, the economy is still evolving as technology changes and the population grows or shrinks.  

Obviously, this hierarchy of different time scales reflects my own views in many ways. And it is missing some crucial pieces of the puzzle. Most notably, I have left out entry and exit of firms from the adjustment processes I listed. I don’t know have fast that process takes place. It could be an important short-run adjustment process, or it could be primarily a medium-run adjustment process. Or it could be somewhere in between.

Suppose that after a cut in capital taxation the adjustment process brings the economy 10% of the way toward its new steady state each year. Then, after whatever the impact effect is, the gradual adjustment in the capital stock thereafter has on average only 37% percent of the effect in the first ten years that it will have in the new steady state. You can see some details of the calculation in my wonky Christmas Twitter thread here, but you can also see it visually in the blue graph near the top of this post. The area below the upside-down exponential curve for the convergence to the new steady state is obviously less than half the area beneath the line for the full steady state effect. Personally, I learned something I hadn't realized from doing this calculation. 

Note that, among the effects tied to the increase in the capital stock are a large share of the dynamic tax revenue effects of the tax reform. The dynamic benefits for tax revenue should be more than two and a half times as big (1/.37 times) in the new steady state as they are in the first ten years, which is the bureaucratic window over which such things are often evaluated. 

Now, what about the impact effect? Let's consider the impact effect on GDP first, then the impact effect on interest rates. Most of the supply-side improvement from the tax reform, if it has one, should only occur when additional capital formation has actually taken place. So aggregate supply shouldn't be that different in the short run. So if the Fed keeps output at the natural level, GDP also shoulnd't be affected all that much in the short run by the tax reform, even though it could be raised quite a bit in the long run if it works as claimed. 

As for interest rates, remember that this tax reform changed the taxation of interest rates. One reason the Fed doesn't need to raise interest rates all that much to keep GDP at the natural level is that the tax reform itself raises after-tax interest rates. For example, in addition to some direct limitations on deducting mortgage interest, the standard deduction is so much bigger that many people won't want to deduct mortgage interest. That means that the same before-tax interest rate corresponds to a larger after-tax interest rate for many people. The Fed's interest rate is a before-tax interest rate. So if the Fed looks like it is standing pat, after-tax interest rates are going up.

For business investment, the after-tax rental rate on capital also goes up because it got a big tax cut. (The rental rate is the more general concept that in very simple models is equal to the marginal product of capital.) Investment per the Q-theory depends on the gap between the after-tax rental rate and the after tax interest rate. So given a large corporate tax cut and a reduction in interest deductibility and no reaction by the Fed, business investment can go up while housing investment goes down.  

Contrary to the headline of Pedro da Costa's Business Insider article above, the bottom line is that the Fed not needing to react to the recent tax reform in a big way doesn't mean that the tax reform isn't working as intended to increase capital formation through investment. The real test of the tax reform is what it does in the long run, not what it does in the next few years.

                                            Link to the article shown just above

                                            Link to the article shown just above

2017's Most Popular Posts

                                       image source

                                       image source

The "Key Posts" link at the top of my blog lists all important posts through the end of 2016. This is intended as a complement to that list, in two categories: popular new posts and popular older posts. (You can see other recent posts by clicking on the Archive link at the top of my blog.) The numbers shown are pageviews throughout 2017 according to Google Analytics. My blog homepage had 34,833 pageviews in 2017. Total pageviews were 240,568 in 2017.  

New Posts in 2017 

  1. Five Books That Have Changed My Life  6936
  2. Obesity Is Always and Everywhere an Insulin Phenomenon  5979
  3. There Is No Such Thing as Decreasing Returns to Scale  4441
  4. Forget Calorie Counting; It's the Insulin Index, Stupid  3927
  5. Let's Set Half a Percent as the Standard for Statistical Significance  3377
  6. Key Posts 2012-2016:  3098
  7. Matthew Shapiro, Martha Bailey and Tilman Borgers on the Economics Job Market Rumors Website  2941
  8. On the Virtue of Scientific Disrespect  1939
  9. Paul Krugman on John Taylor and Admitting Error  1702
  10. Martin Wolf: Why Bankers are Intellectually Naked  1690
  11. Why I Am Not a Neoliberal  1645
  12. Michael Weisbach: Posters on Finance Job Rumors Need to Clean Up Their Act, Too  1637
  13. Contra Randal Quarles  1631
  14. Economics Needs to Tackle All of the Big Questions in the Social Sciences  1524
  15. Defining Economics  1406
  16. Does the Journal System Distort Scientific Research?  1268
  17. Peter Conti-Brown's Takedown of Danielle DiMartino Booth's Book Fed Up: An Insider's Take on Why the Federal Reserve is Bad for America  1211
  18. Returns to Scale and Imperfect Competition in Market Equilibrium  1175
  19. Signalling When Everyone Knows about Last-Place Aversion: An Application to Economics Job Market Rumors  1152
  20. Border Adjustment vs. Dollar Depreciation  1151
  21. My Objective Function  1146
  22. Why I Am Now a Bear  1114
  23. Jason Fung: Dietary Fat is Innocent of the Charges Leveled Against It  789
  24. Breaking the Chains  787
  25. In Praise of Partial Equilibrium  783
  26. Believe in Yourself  766
  27. Sugar as a Slow Poison  685
  28. Next Generation Monetary Policy  666
  29. A Blessing for Diana and Erik  611
  30. Whole Milk Is Healthy; Skim Milk Less So  609
  31. Restoring American Growth: The Video  606
  32. Why GDP Can Grow Forever  598
  33. Brian Flaxman: Yes! Economics Did Sway Obama Voters to Trump  586
  34. Daron Acemoglu and Simon Johnson's Plan to Save Our Republic  538
  35. The Keto Food Pyramid  532
  36. When the Output Gap is Zero, But Inflation is Below Target  501
  37. How Did Evolution Give Us Religion?  499
  38. Why I Am Not a Physicist  470
  39. Meat Is Amazingly Nutritious—But Is It Amazingly Nutritious for Cancer Cells, Too?  458
  40. John Locke's State of Nature and State of War  452
  41. John Locke on Legitimate Political Power  448
  42. The Volcker Shock  434
  43. The Only Military Action the US Should Take Against North Korea Is to Shoot Down Every North Korean Missile in Boost Phase  408
  44. Marriage 102:  398
  45. How Strong is the Economics Guild?  389
  46. Salt Is Not the Nutritional Evil It Is Made Out to Be  377
  47. Markus Brunnermeier and Yann Koby's "Reversal Interest Rate"  374
  48. You, Too, Are a Math Person; When Race Comes Into the Picture, That Has to Be Reiterated   358
  49. Leaving a Legacy  349
  50. On John Locke's Labor Theory of Property  341
  51. Thomas Sowell on How to Succeed as an Ethnic Minority  320
  52. John Locke Treats the Bible as an Authority on Slavery  296
  53. Intelligent Economist: Top 100 Economics Blogs of 2017:  286
  54. Deregulation of Social Science as a Free Speech Issue  273
  55. Miles Kimball, Colter Mitchell, Arland Thornton and Linda Young-Demarco—Empirics on the Origins of Preferences: The Case of College Major and Religiosity  273
  56. John Locke on How Things That Are No One's Property Become Someone's Property  262
  57. Karthik Muralidharan, Abhijeet Singh, and Alejandro J. Ganimian: Disrupting Education? Experimental Evidence on Technology-Aided Instruction in India  259
  58. The Relative Citation Ratio  258
  59. John Locke: People Must Not Be Judges in Their Own Cases  247
  60. Mass In/Mass Out: A Satire of Calories In/Calories Out  240
  61. Why Is Productivity Growth So Low? 23 Economic Experts Weigh In|FocusEconomics  227
  62. Diana Kimball: Listening Creates Possibilities  223
  63. How Sugar Makes People Hangry  219
  64. The Evolution of the Dominant Sector of the Economy of Each US State, 1990-2013|  219

Older Posts with Continuing Popularity

  1. John Stuart Mill's Brief for Freedom of Speech   9113
  2. There's One Key Difference Between Kids Who Excel at Math and Those Who Don't      (with Noah Smith)  3400
  3. The Complete Guide to Getting into an Economics PhD Program (with Noah Smith)  3044
  4. William Graham Sumner, Social Darwinist   2846
  5. How and Why to Eliminate the Zero Lower Bound: A Reader’s Guide  2420
  6. Why Taxes are Bad  2187
  7. The Medium-Run Natural Interest Rate and the Short-Run Natural Interest Rate  2028
  8. Contra John Taylor  1960
  9. Joshua Foer on Deliberate Practice  1919
  10. Why I Write  1915
  11. John Stuart Mill’s Vigorous Advocacy of Education Vouchers  1908
  12. Government Purchases vs. Government Spending  1680
  13. How to Turn Every Child into a "Math Person"  1451
  14. The Logarithmic Harmony of Percent Changes and Growth Rates  1302
  15. Daniel Coyle on Deliberate Practice  1262
  16. Ezequiel Tortorelli: The Trouble with Argentina  1234
  17. Shane Parrish on Deliberate Practice  1142
  18. Robert Shiller: Against the Efficient Markets Theory  1122
  19. John Stuart Mill’s Defense of Freedom  1091
  20. Monetary vs. Fiscal Policy: Expansionary Monetary Policy Does Not Raise the Budget Deficit  937
  21. John Stuart Mill on Freedom from Religion  868
  22. Dr. Smith and the Asset Bubble  839
  23. What is the Effective Lower Bound on Interest Rates Made Of?  823
  24. On Master's Programs in Economics  814
  25. John Stuart Mill's Brief for Individuality  753
  26. How and Why to Expand the Nonprofit Sector as a Partial Alternative to Government: A Reader’s Guide  631
  27. Inequality Is About the Poor, Not About the Rich  603
  28. Fields Medal Winner Maryam Mirzakhani's Slow-Cooked Math  599
  29. What is a Supply-Side Liberal?  585
  30. Silvio Gesell's Plan for Negative Nominal Interest Rates  556
  31. Higher Inflation Is Not the Answer  551
  32. The Message of Mormonism for Atheists Who Want to Stay Atheists  540
  33. Sticky Prices vs. Sticky Wages: A Debate Between Miles Kimball and Matthew Rognlie  533
  34. Roger Farmer and Miles Kimball on the Value of Sovereign Wealth Funds for Economic Stabilization  502
  35. Nicholas Kristof: "Where Sweatshops are a Dream"  492
  36. John Stuart Mill: In Praise of Eccentricity  456
  37. The Coming Transformation of Education: Degrees Won’t Matter Anymore, Skills Will  433
  38. Even Central Bankers Need Lessons on the Transmission Mechanism for Negative Interest Rates  431
  39. John Stuart Mill: Two Maxims for Liberty  429
  40. John Stuart Mill’s Roadmap for Freedom  410
  41. Cognitive Economics  407
  42. The Shape of Production: Charles Cobb's and Paul Douglas's Boon to Economics  397
  43. Why I Read More Books than Economic Journal Articles  387
  44. My Dad  381
  45. The Unavoidability of Faith  377
  46. What If Jesus Was Really Resurrected? Musings of a Non-Supernaturalist  358
  47. How Increasing Retirement Saving Could Give America More Balanced Trade  357
  48. John Stuart Mill on Balancing Christian Morality with the Wisdom of the Greeks and Romans  355
  49. John Stuart Mill’s Brief for the Limits of the Authority of Society over the Individual  354
  50. How Subordinating Paper Currency to Electronic Money Can End Recessions and End Inflation  351
  51. Bruce Greenwald: The Death of Manufacturing & the Global Deflation  347
  52. Can Taxes Raise GDP?  347
  53. Heroes of Science Action Figures  344
  54. Miles Moves to the University of Colorado Boulder  339
  55. An Agnostic Prayer for Strength  339
  56. David Dreyer Lassen, Claus Thustrup Kreiner and Søren Leth-Petersen—Stimulus Policy: Why Not Let People Spend Their Own Money?  323
  57. Hannah Katz: The Pros and Cons of Tipping Culture  319
  58. One of the Biggest Threats to America's Future Has the Easiest Fix  312
  59. "The Hunger Games" Is Hardly Our Future--It's Already Here  304
  60. Jeff Smith: More on Getting into an Economics PhD Program  298
  61. John Stuart Mill: In the Parent-Child Relationship, It is the Children that Have Rights, Not the Parents  297
  62. 18 Misconceptions about Eliminating the Zero Lower Bound  296
  63. Teleotheism and the Purpose of Life  296
  64. Expansionist India  287
  65. The Deep Magic of Money and the Deeper Magic of the Supply Side  282
  66. On the Great Recession  282
  67. John Stuart Mill on Public and Private Actions  276
  68. The Descent—and the Divine Calling—of the Modernists  269
  69. Greg Shill: Does the Fed Have the Legal Authority to Buy Equities?  264
  70. Us and Them  258
  71. On Having a Thesis  256
  72. John Locke on Punishment  255
  73. International Finance: A Primer  247
  74. Franklin Roosevelt on the Second Industrial Revolution  246
  75. Miles Kimball - Google Scholar Citations  243
  76. Cathy O'Neil on Slow-Cooked Math  240
  77. On the Consumer Financial Protection Bureau  238
  78. JP Morgan’s Michael Feroli, Malcolm Barr, Bruce Kasman and David Mackie On Board for Negative Rates  234
  79. John Stuart Mill on Freedom of Thought  227
  80. John Locke on the Equality of Humans  226
  81. Samantha Shelley: Why I'll Never Regret Being Mormon  222
  82. John Stuart Mill Applies the Principles of Liberty  221
  83. How Conservative Mormon America Avoided the Fate of Conservative White America  217
  84. How Albert Einstein Became a Celebrity  214
  85. Electronic Money: The Powerpoint File  212

Many of the popular older posts are posts that turn up easily in Google searches. 

The Inauguration Day Letter Barack Obama Left for Donald Trump

Dear Mr. President -

Congratulations on a remarkable run. Millions have placed their hopes in you, and all of us, regardless of party, should hope for expanded prosperity and security during your tenure.

This is a unique office, without a clear blueprint for success, so I don't know that any advice from me will be particularly helpful. Still, let me offer a few reflections from the past 8 years.

First, we've both been blessed, in different ways, with great good fortune. Not everyone is so lucky. It's up to us to do everything we can (to) build more ladders of success for every child and family that's willing to work hard.

Second, American leadership in this world really is indispensable. It's up to us, through action and example, to sustain the international order that's expanded steadily since the end of the Cold War, and upon which our own wealth and safety depend.

Third, we are just temporary occupants of this office. That makes us guardians of those democratic institutions and traditions -- like rule of law, separation of powers, equal protection and civil liberties -- that our forebears fought and bled for. Regardless of the push and pull of daily politics, it's up to us to leave those instruments of our democracy at least as strong as we found them.

And finally, take time, in the rush of events and responsibilities, for friends and family. They'll get you through the inevitable rough patches.

Michelle and I wish you and Melania the very best as you embark on this great adventure, and know that we stand ready to help in any ways which we can.

Good luck and Godspeed,



John Locke Pretends Land Ownership Goes Back to the Original Peopling of the Planet

It only takes a little knowledge of history to know that most real-world land claims actually go back to either conquest or to some kind of squatting on land that someone else had a nominal claim to. Few real-world land claims go back to the original peopling of the earth. So there are problems with both halves of section 35 of John Locke's 2d Treatise on Government: “Of Civil Government” (in Chapter V "Of Property"):

It is true, in land that is common in England, or any other country where there is plenty of people under government, who have money and commerce, no one can inclose or appropriate any part, without the consent of all his fellow-commoners; because this is left common by compact, i. e. by the law of the land, which is not to be violated. And though it be common, in respect of some men, it is not so to all mankind; but is the joint property of this country, or this parish. Besides the remainder, after such inclosure, would not be as good to the rest of the commoners, as the whole was when they could all make use of the whole; whereas in the beginning and first peopling of the great common of the world, it was quite otherwise. The law man was under, was rather for appropriating. God commanded, and his wants forced him to labour. That was his property which could not be taken from him wherever he had fixed it. And hence subduing or cultivating the earth, and having dominion, we see are joined together. The one gave title to the other. So that God, by commanding to subdue, gave authority so far to appropriate: and the condition of human life, which requires labour and materials to work on, necessarily introduces private possessions.

What force John Locke's argument here had in the era when he wrote it comes mostly from his clever use of the Bible. Here two of the Bible verses he is alluding to:

In the sweat of thy face shalt thou eat bread, till thou return unto the ground; for out of it wast thou taken: for dust thou art, and unto dust shalt thou return. (Genesis 3:19)

And God blessed them, and God said unto them, Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth. (Genesis 1:28)

But even in John Locke's reading of Bible verses, there is a serious problem, akin to the problem I mentioned above. "Be fruitful, and multiply, and replenish the earth, and subdue it," which sounds the most like land claims based on the peaceful peopling of the earth, is a Bible verse from before the Fall. The verse requiring unpleasant labor is in the third chapter of Genesis, after the fall. The fourth chapter of Genesis moves toward the reality of where land-claims come from:

And Cain talked with Abel his brother: and it came to pass, when they were in the field, that Cain rose up against Abel his brother, and slew him. (Genesis 4:8)

The rest of the first five books of the Bible, where God promises land to the Israelites that they ultimately claim in bloody conquest, completes a more realistic picture of where land claims come from. 

My focus here is on land claims in John Locke's before-the-Fall model and land claims in what believers would call our actual fallen world. But it is worth also pointing to the Bible's contrast between labor after the Fall, as described in the third chapter of Genesis and labor before the Fall, as described in the second chapter of Genesis:

And the Lord God took the man, and put him into the garden of Eden to dress it and to keep it. (Genesis 2:15)

Reducing human violence—which Steven Pinker talks about in The Better Angels of Our Natureis much more important, but it would be a great advance in human happiness if we can figure out how to make the experience of work more like dressing and keeping the Garden of Eden than eking out survival from thorny ground by the sweat of our brows. 


Don't miss other John Locke posts. Links at "John Locke's State of Nature and State of War."