Ryan Murphy has a new book that doesn’t fit neatly into any single category. This is from the intro:
There are many attitudes that, upon cursory consideration, do not make any sense from an economic or analytical perspective. Why do people think that buying local is good for the local economy and the environment? Why are people terrified by vaccines, and even relatively intelligent people will use any excuse they can unearth to maintain their belief that vaccines are somehow sinister? Why do people attach a sense of morality to “Buy American”? Why are people willing to put in place onerous restrictions on their diet to reduce their carbon footprint, only to later purchase a plane ticket with a carbon footprint that singlehandedly wipes away a year’s worth of the environmental benefits of the diet? Why buy fair trade coffee to help the global poor instead of giving them the money directly? Why spend good money on the anti-establishment health fad of the week, whether that is Vitamin C, GMOfree, or homeopathic medicine? I will argue that every one of these has the same basic root cause. There is a fundamental mismatch between our minds and the institutional environment of modernity.
The book is sort of like behavioral economics, but feels different. It has some similarity to Bryan Caplan’s The Myth of the Rational Voter, but the analysis is applied to private sector activities. It doesn’t fit neatly into either the “left” or the “right” side of the political spectrum. It’s not clear if the message is that we need more regulation or less. At times it can be elitist (when defending science over pseudo-science), while at other times it is anti-elitist (when criticizing expertise in cultural fields.) I see its hard-to-pin-down nature as a plus, but others may be frustrated.
One of my favorite sections discussed social capital. I’ve generally bought into the notion that high levels of social capital are desirable. To some extent that is true, but Murphy points out that social capital can also pressure individuals into acting in ways that are counterproductive. Social capital can encourage “buy local”, or “natural” products, or “do-it-yourself”, even where these approaches make no sense.
Here’s what he has to say about conspicuous consumption:
Within educated society, which includes nearly any reader of this book, what actually connotes status is the opposite of what is thought of as conspicuous consumption. Conventional conspicuous consumption is now associated with low status people who happen to have money. Social capital at high levels may contribute to ecological irrationality, and we have good reason to think bonding social capital, counterintuitively, can harm institutional quality.
Even where you disagree you’ll be forced to think. Murphy is skeptical of claims that modern sports and film are inferior to 20th century sports and film. In the past, I’ve felt that modern athletes were better than those of the 20th century, while film has regressed. Painting during the past 100 years seems inferior to the painting of 1819-1919, and films now seem inferior to the golden age of 1920-80, at least in the West. If forced to reconcile these views, I’d say modern NBA players are better but the product is less entertaining, and that modern directors are more talented but that their films are less impressive. As an analogy, I don’t doubt that Silicon Valley contains hundreds of engineers who are more talented than Edison, and yet lack his distinguished list of inventions.
Despite this quibble, I am persuaded by much of what he has to say, and found lots of interesting ideas on topics that I had never really even thought about. I recommend it to people who enjoy exploring interesting new ideas in the social sciences, the sort of people who read the bloggers from George Mason’s economics department. Also recommended for people sympathetic to the “rationalist” movement.
Murphy is a very creative economist who has studied a wide range of issues, including the relationship between nominal GDP shocks and political change.
PS. The Economist recently had an interesting article on family obligations in African countries:
Sharing within social networks is central to economic life in much of Africa. Although kinship systems vary, obligations typically extend beyond the nuclear family to include the children of siblings as well as cousins, or sometimes larger units such as clans. People turn to friends and relations for help with school fees, hospital bills, or for a place to stay. Where formal institutions are weak, the family is bank, business partner and welfare state.
At times the pressure to share can be stifling. “People make you feel guilty when they see you with a house, car or even a good dress,” says one Ugandan journalist. Black South Africans talk about paying a “black tax” to support a web of dependents. In Ethiopia, Pentecostal Christianity has taken off, in part because it offers an escape from traditional kinship obligations.
Is it possible that Africa has too much of some types of social capital and too little of other types? Before reading Murphy’s book, I probably wouldn’t have even framed the question that way.
READER COMMENTS
Lorenzo from Oz
Dec 23 2019 at 6:44pm
Nice point about social capital. Western commentary simply assumes monogamous marriage and weak kin groups are normal and proceed from there. Historically, neither is remotely normal. Indeed, the Classical Mediterranean and Christian Eurosphere are wildly historically unusual, in being patricentric family societies practising marital monogamy with weak kin groups.
Middle Eastern kin groups operate much as African ones, and tend to colonise all the institutions of their societies. Hence the Islamic use of slave warriors — slavery stripped them of kin connections. Although, Middle Eastern kin groups are in some ways stronger, because there is so much cousin marriage (marrying back within the kin group, the lineage). They are also somewhat more adapted than Sub-Saharan African societies to urban living and long distance commerce via Sharia. They also presume male control of property and income (being based on plough and pastoralist societies), which the hoe societies of Sub-Saharan Africa do not, as women typically do the farming.
Africa has (and had) the lowest rate of cultivation of arable land of any continent because the megafauna co-evolved with homo sapiens (as did disease: a major reason that there was little urbanisation in Sub-Saharan Africa). An elephant herd could eat your entire crop in a day. Hence folk had to bunch together to keep the elephants away.
It led to high fertility (produce as many kids as possible to have maximum chance of some surviving, and children can help hoe farming far more than plough farming). And more dispersed parenting practices — a lot more temporary fostering, a broader range of supervising kin, but also less parental, and particularly less paternal, investment in individual children. (I am sceptical that American slavery completely wiped out all the African cultural traces, but there does not seem to be much in the way of scholarship that even asks that question.)
Phil H
Dec 26 2019 at 5:13am
“what actually connotes status is the opposite of what is thought of as conspicuous consumption.”
I’m a bit unconvinced by this. It’s high status to look grungy, sure – in your parents $5m New York brownstone. It’s not high status to look grungy in a cheap suburb of Omaha. The anti-conspicuous consumption thing is just an evolution of conspicuous consumption: it’s being (or more often, pretending to be) so rich that even these expensive things really mean nothing to you.
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