Wednesday, July 31, 2019

Clearance rates for murder & other serious crimes have declined significantly for almost 60 years despite significant technological improvements in police investigations; the reasons are not well understood

Rethinking criminal investigations. John E. Eck, D. Kim Rossmo. Criminology &Public Policy, July 31 2019.

Research Summary: The clearance rates for murder and other serious crimes have declined significantly for almost 60 years despite significant technological improvements in police investigations. The reasons for this are not well understood. We argue here for rethinking why, what, and how police investigators operate so as to repurpose their work for reducing crime. These changes include improved thinking by detectives to reduce investigative errors, increased focus on patterns of crimes, and better use of detective expertise in crime prevention.

Policy Implications: First, police should work to reduce investigative failures by improving investigative thinking. Second, tinkering with the administrative practices of investigative units seems unlikely to produce significant results. Third, police agencies should engage detectives in crime prevention. Finally, police agencies should connect investigations to problem solving.

The 2015 Volkswagen emissions scandal: A natural experiment to provide evidence that collective reputation externalities matter for firms; it reduced the U.S. sales of the other German auto manufacturers

Firms and Collective Reputation: a Study of the Volkswagen Emissions Scandal. Ruediger Bachmann, Gabriel Ehrlich, Ying Fan, Dimitrije Ruzic. NBER Working Paper No. 26117, July 2019.

Abstract: This paper uses the 2015 Volkswagen emissions scandal as a natural experiment to provide evidence that collective reputation externalities matter for firms. We find that the Volkswagen scandal reduced the U.S. sales of the other German auto manufacturers—BMW, Mercedes-Benz, and Smart—by about 105,000 vehicles worth $5.2 billion. The decline was principally driven by an adverse reputation spillover, which was reinforced by consumer substitution away from diesel vehicles and was partially offset by substitution away from Volkswagen. These estimates come from a model of vehicle demand, the conclusions of which are also consistent with difference-in-differences estimates. We provide direct evidence on internet search behavior and consumer sentiment displayed on social media to support our interpretation that the estimates reflect a reputation spillover.

Gossipers who punish social norm violators are evaluated positively

Gossipers who punish social norm violators are evaluated positively. Mark D. Cloud, Melinda M. Funk, Jaime M. Cloud. Human Behavior and Evolution Society 31st annual meeting. Boston 2019.

Abstract: Studies have shown that about 65% of human conversation is occupied by gossip. Although gossipers often are scorned, Wilson et al. (2000) predicted and found that gossipers are evaluated positively if the gossip, in response to a social norm violation, is third-party punishing rather than self-serving. In this systematic replication, we expected to find similar results recruiting participants with a broader range of backgrounds. We also added a potential moderating variable – individual differences in tendency to gossip. Using TurkPrime across two experiments, we recruited 266 participants (M age = 40.17; 53% female). For both experiments, participants read different versions of a scenario involving a social-norm violation (e.g., cattle breaking a neighbor’s fence) in which a gossiper either responded in a group-serving or selfserving manner. Subsequently, participants rated their feelings toward the gossiper and completed a tendency to gossip questionnaire. We replicated the effects found by Wilson et al. (2000) in which group-serving gossipers were evaluated positively and self-serving gossipers were evaluated negatively and further found evidence for the interactive effects of tendency to gossip and participant age on those evaluations. These findings are consistent with the notion that gossip often serves as a form of third-party punishment.

Incidence & causes of human error as a source of adverse events associated with surgical care: 56.4% adverse events were due to human error, of which cognitive error accounted for 51%

Analysis of Human Performance Deficiencies Associated With Surgical Adverse Events. James W. Suliburk et al. JAMA Netw Open. 2019;2(7):e198067, July 31, 2019, doi:10.1001/jamanetworkopen.2019.8067

Key Points
Question  What are the incidence and causes of human error as a source of adverse events associated with surgical care?

Findings  In a quality improvement study including 5365 operations, 188 adverse events were recorded. Of these, 106 adverse events (56.4%) were due to human error, of which cognitive error accounted for 99 of 192 human performance deficiencies (51.6%).

Meaning  Current systems-based approaches to improve surgical safety should be supplemented with additional focus on cognitive errors associated with surgical care.

Importance  Potentially preventable adverse events remain a formidable cause of patient harm and health care expenditure despite advances in systems-based risk-reduction strategies.

Objective  To analyze and describe the incidence of human performance deficiencies (HPDs) during the provision of surgical care to identify opportunities to enhance patient safety.

Design, Setting, and Participants  This quality improvement study used a new taxonomy to inform the development and implementation of an HPD classifier tool to categorize HPDs into errors associated with cognitive, technical, and team dynamic functions. The HPD classifier tool was then used to concurrently analyze surgical adverse events in 3 adult hospital affiliates—a level I municipal trauma center, a quaternary care university hospital, and a US Veterans Administration hospital—from January 2, 2018, to June 30, 2018. Surgical trainees presented data describing all adverse events associated with surgical services at weekly hospital-based morbidity and mortality conferences. Adverse events and HPDs were classified in discussion with attending faculty and residents. Data were analyzed from July 9, 2018, to December 23, 2018.

Main Outcomes and Measures  The incidence and primary and secondary causes of HPDs were classified using an HPD classifier tool.

Results  A total of 188 adverse events were recorded, including 182 adverse events (96.8%) among 5365 patients who underwent surgical operations and 6 adverse events (3.2%) among patients undergoing nonoperative treatment. Among these 188 adverse events, 106 (56.4%) were associated with HPDs. Among these 106 HPD adverse events, a total of 192 HPDs (mean [SD], 1.8 [0.9] HPDs per HPD event) were identified. Human performance deficiencies were categorized as execution (98 HPDs [51.0%]), planning or problem solving (55 HPDs [28.6%]), communication (24 HPDs [12.5%]), teamwork (9 HPDs [4.7%]), and rules violation (6 HPDs [3.1%]). Human performance deficiencies most commonly presented as cognitive errors in execution of care or in case planning or problem solving (99 of 192 HPDs [51.6%]). In contrast, technical execution errors without other associated HPDs were observed in 20 of 192 HPDs (10.4%).

Conclusions and Relevance  Human performance deficiencies were identified in more than half of adverse events, most commonly associated with cognitive error in the execution of care. These data provide a framework and impetus for new quality improvement initiatives incorporating cognitive training to mitigate human error in surgery.


This study found that HPDs, or human error, were identifiable in more than half of the complications occurring in major cardiothoracic, vascular, abdominal transplant, surgical oncology, acute care, or general surgical operations performed at 3 large institutions in a major academic medical center. Given that we and others report a current surgical adverse event rate of nearly 5%,12-15,17 our data suggest that more than 400 000 potentially preventable adverse events associated with HPDs occur among the nearly 17 million inpatient and ambulatory operative procedures performed in the United States annually.20
Similarities between adverse event rates in our study compared with previous studies suggest that human error remains a significant unresolved cause of adverse events in health care delivery.4-9,13-18 Specifically, compared with our currently reported adverse event rate of 3%, prior studies conducted as early as 20007,15,17,21-30 reporting a preventable or human error event rate ranging from approximately 3% to 4% support the need for interventions beyond current systems-based strategies if we are to achieve Six Sigma safety levels.
In our current analysis, cognitive error (ie, HPD class I.A.3 and class II.A-C) was the most common specific form of HPD, classified in 99 (52%) of 192 HPDs. More specifically, cognitive error was classified in 29 of 53 isolated HPD events (55%) and 70 of 139 clustered HPD events (50%). It is interesting that lack of recognition was the most prevalent cognitive error and was classified in 19% of the HPD subclassifications, potentially reflecting the paradox that the most common dangers to patient safety are those that are initially unrecognized. This paradox raises important challenges for cognitive training.
Cognitive error was likewise the most common primary cause of adverse events in clustered HPD events, being classified as such in 31 of 53 clustered HPD events (58%). Cognitive error was a potentially preventable primary cause of adverse events in 35% of technical error HPD events. In comparison, technical errors occurring in isolation were classified in only 10% of HPD events, and systems-based (class I.A.1, class I.B, and class III), communications (class IV), or teamwork (class V) HPDs; together represented only 26% of HPD events. These findings suggest the dominant role of cognitive error as a root cause of surgical adverse events, even those that would appear to be technical rather than cognitive in nature.
Considering the relative frequency of HPD types found in our study, the prevalence of cognitive error as the most frequent isolated HPD associated with adverse events may reflect the potency of cognitive error in being able to overwhelm other potential barriers to adverse events, consistent with the Swiss cheese model of the multifactorial causality of human error by Reason.31 In comparison, the frequency with which cognitive error was associated with other HPDs (100 of 192 HPDs [52%]) may also reflect the snowballing effect of HPDs, as suggested by Mold and Stein32 and Woolf et al.33
Two specific examples from our HPD analysis further highlight the potentially unrecognized role that cognitive error can also play in surgical adverse outcomes. In one case, we found that a significant technical error in a surgeon’s performance of an operation was likely precipitated by the initially unappreciated influence of the surgeon’s distraction by an outside telephone call in the operating room. The identification of distraction (ie, class II.B, lack of attention) converts an otherwise challenging technical training goal into an opportunity for behavioral training to reset following intraoperative distractions.
In a second case, a stylus that was inadvertently retained postoperatively was clearly visible but repeatedly unrecognized by radiologists in their reports prior to the patient developing a life-threatening adverse reaction. Standard event analyses would likely ascribe this outcome to clinician inattention, but we were able to further resolve this to confirmation bias (class I.A.3): the clinician dismissed their own concerns because they were not validated in official radiology reports. Like the first example, this HPD subanalysis would allow a cognitive training opportunity to teach clinicians to avoid losing their situational awareness to the convenience of alternative data.
Systems-based approaches (eg, no telephone calls in the operating room, catheter placement checklist) represent standard remedies to these HPD scenarios. However, the effectiveness of these strategies is becoming impaired by a growing checklist burnout syndrome.12,14,21-24,34 The option of cognitive training for health care practitioners as practiced in the aviation industry19 also fits with Swiss cheese model by Reason31 of multilayered human error safeguards.10,32,35,36 As noted by Gruen et al, “protocols alone are insufficient to consistently change behavior.”15

Choosy Gulf pipefish males ignore age but prefer active females with deeply keeled bodies (choose by body depth and display); ornamentation has no effect

Choosy Gulf pipefish males ignore age but prefer active females with deeply keeled bodies. Andrew P. Anderson, Adam G. Jones. Animal Behaviour, Volume 155, September 2019, Pages 37-44.


• We investigated factors influencing male choice in S. scovelli.
• Males chose females based on body depth and display rather than ornamentation.
• Female ornamentation was correlated with female body size, fecundity and courtship.
• Female age did not affect mate choice, female fecundity, ornamentation or courtship.
• Faster growth in females had no impact on any of the tested traits.

Abstract: Within Syngnathidae (pipefish, seadragons and seahorses), male pregnancy often results in choosy males and competitive females. Females in these species often evolve secondary sexual traits and engage in courtship displays that make their ornaments more noticeable to males. Most syngnathids probably continue to grow larger throughout their lives, but we know little about the relationship between age and mating competition in these taxa. Here, we use the Gulf pipefish, Syngnathus scovelli, to investigate the roles of ornament size, courtship activity level, age and fecundity in female mating competition. We conducted male choice trials that allowed males to choose between similarly sized females of different ages. We also measured age and size at maturity. We found that females with larger ornaments were deeper bodied and engaged in longer courtship displays, yet males chose females based on body depth and display rather than ornamentation. This result suggests that ornamentation serves to help males assess female quality. Female age plays no role in male choice or in female ornamentation. Our finding that males care more about female phenotype than female age considerably simplifies the interpretation of mating patterns in natural populations of Gulf pipefish, which are characterized by considerable age structure.
Keywords: agemate choicesex-role reversalsyngnathid

Personality similarity associated with formation and maintenance of male social bonds in macaques; males did not adapt their personality to their partners.

Personality homophily affects male social bonding in wild Assamese macaques, Macaca assamensis. Anja Ebenau et al. Animal Behaviour, Volume 155, September 2019, Pages 21-35.

• Personality similarity associated with formation and maintenance of male social bonds.
• Dyadic bond strength increased with increased similarity in Gregariousness dimension.
• Gregariousness remained stable in migrating males that had to form new bonds.
• Males did not adapt their personality to their partners.

Abstract: Animal social bonds are defined as stable, equitable and strong affiliative and cooperative relationships similar to human friendships. Just as with human friendships, social bonds are thought to function as alliances that generate adaptive benefits via support in critical situations. In humans, similarity in many sociodemographic, behavioural and intrapersonal characteristics leads to trust and is predictive of friendships. Specifically, personality homophily (that is, the tendency of individuals to form social bonds with others who have a similar personality) may increase predictability and facilitate trust and reciprocity between partners with compatible behavioural tendencies. While evidence for social bonding in animals is accumulating, far less is known about its predictors. Here, personality homophily effects on the formation and maintenance of social bonds are shown in 24 wild male Assamese macaques at Phu Khieo Wildlife Sanctuary, Thailand. Dyadic bond strength increased with increased similarity in the trait Gregariousness (i.e. frequent and diverse neighbours within 5 m and pronounced social tolerance, as shown by high rates of friendly approaches to and by others). To differentiate whether homophily indeed predicted bond formation or whether bonded males’ personalities became more similar over time, we tested the stability of the Gregariousness traits in a subset of immigrating males that had to form new bonds. Gregariousness in these males remained stable, suggesting that males do not adapt their personality to their partner. Our results support the idea of a shared evolutionary origin of homophily as a partner choice strategy in human and nonhuman animals. The main selective advantage of personality similarity in animal social bonds may result from a more reliable cooperation between individuals with similar cooperative behavioural tendencies.

Keywords: animal social bondAssamese macaqueshomophilyhuman friendshippartner choicepersonality

Even though chili peppers can elicit aversive oral burn and pain, cues of foods containing chili recruit brain circuits underlying cue reactivity and craving for drug and natural rewards

Extreme spicy food cravers displayed increased brain activity in response to pictures of foods containing chili peppers: An fMRI study. Yizhou Zhou et al. Appetite, July 31 2019, 104379.

Abstract: In China, the rate of spicy food consumption is rising, and chili pepper is among the most popular spicy foods consumed nationwide. Therefore, investigation into spicy food craving is of public health interest and can also provide better insights into the mechanisms that underlie food cravings more generally. This exploratory study aimed to determine neural circuits underlying spicy food craving by comparing brain response to the cues of foods containing chili peppers in extreme cravers and non-cravers defined by scores on the Spicy Food Craving Questionnaire. A group of extreme cravers (n = 25) and a group of age- and sex-matched non-cravers (n = 26) participated in an fMRI event-related cue-reactivity paradigm, during which pictures of foods with visible chili peppers and pictures of foods with no chili peppers were presented. Results showed that extreme spicy food cravers exhibited increased activation in bilateral insula, left putamen, left dorsal anterior cingulate cortex, right inferior parietal lobule, right lingual gyrus, bilateral cuneus, left precuneus, left fusiform gyrus, and right precentral gyrus compared to non-cravers when exposed to the cues of foods containing chili versus foods without chili. While we did not observe the differential activation of orbitofrontal cortex and amygdala of this contrast in extreme cravers compared to non-cravers. Changes in beta values within the right insula, left putamen, left dorsal anterior cingulate cortex and left precuneus were positively associated with subjective spicy food craving during the scan among extreme cravers. In addition, changes in beta values within right inferior parietal lobule was significantly correlated with the frequency of spicy food intake among extreme cravers. These results align with prior work suggesting that the dorsal striatum, the anterior cingulate cortex and the insula underlie food craving.

Keywords: Spicy food cravingCue-reactivityfMRIInsulaStriatumAnterior cingulate cortex

This speaks against the idea that worldview defense following mortality salience occurs because mortality salience produces higher physiological arousal

Effects of mortality salience on physiological arousal. Johannes Klackl and Eva Jonas. Front. Psychol., Jul 2019, doi: 10.3389/fpsyg.2019.01893

Abstract: Making the inevitability of mortality salient makes people more defensive about their self-esteem and worldviews. Theoretical arguments and empirical evidence point to a mediating role of arousal in this defensive process, but evidence from physiological measurement studies is scarce and inconclusive. The present study seeks to draw a comprehensive picture of how physiological arousal develops over time in the mortality salience paradigm, and whether contemplating one’s mortality actually elicits more physiological arousal than reflecting on a death-unrelated aversive control topic. In a between-subjects design, participants were asked two open questions about their mortality or about dental pain. Cardiac, respiratory, and electrodermal indicators of arousal were measured both as participants provided written answers to the questions, and during a series of resting intervals surrounding the questions. A Bayes factor analysis indicated support for the hypothesis that the mortality salience paradigm increases physiological arousal, both while answering the two open-ended questions and afterwards. Regarding the mortality salience versus dental pain comparison, the null hypothesis of no difference was supported for most analysis segments and signals. The results indicate that the arousal elicited by mortality salience is not different from that elicited by dental pain salience. This speaks against the idea that worldview defense following mortality salience occurs because mortality salience produces higher physiological arousal. Of course, this finding does not rule the importance of other forms of arousal (i.e., subjective arousal) for mortality salience effects.

Assisted childbirth, due to high mortality, is ubiquitous; this feature likely played a critical role in shaping human sociality & may have been mediated by women’s ability to detect & respond to the hormonal status of other women

The role of oxytocin in social support during pregnancy. Citlally Contreras, Elizabeth Pillsworth. Human Behavior and Evolution Society 31st annual meeting. Boston 2019.

Abstract: Childbirth poses an exceptionally high mortality risk for human females compared to non-human primates. Assisted childbirth is, therefore, a ubiquitous feature of human populations, with assistance most often provided by other women. We propose that this feature likely played a critical role in shaping human sociality and may have been mediated by women’s ability to detect and respond to the hormonal status of other women. To test this hypothesis, we designed a pilot study in which we measured oxytocin response in pregnant and non-pregnant women. Participants were nine pregnant women, six paired with a close female friend and three paired with a female stranger. Participants provided information about their reproductive histories, social networks, their relationships with their study partner, and their current pregnancy, and participated in a childbirth education class practicing birth positions and support. Oxytocin was measured in saliva, obtained from all participants at four times during the study. Results suggest that while both pregnant and non-pregnant women exhibited an increase in oxytocin levels, the greatest increase was observed among pregnant women participating with a close friend. These results will be discussed in conjunction with a survey study assessing the role of close female relationships on pregnancy, health, and experience.

Researchers have long theorized about the function of self‐esteem; could be a monitor of fundamental psychological need satisfaction

Self‐esteem as a monitor of fundamental psychological need satisfaction. Jennifer L. Howell, Nicholas Sosa, Hannah J. Osborn. Social and Personality Psychology Compass, July 30 2019.

Abstract: Researchers have long theorized about the function of self‐esteem. Theories such as sociometer, terror management, and self‐determination have each received substantial empirical support, but all purport a different function of self‐esteem. Despite each theory's persuasiveness, they are sometimes at odds, and there remains no clear consensus regarding the function of self‐esteem. In the present paper, we propose the notion that self‐esteem monitors the meeting of multiple fundamental psychological needs, a theory we call the Need‐Satisfaction Framework of self‐esteem. We outline existing empirical support for our theory in the context of three well‐documented fundamental needs: belonging, self‐determination (i.e.,autonomy and competence), and meaning. Across all three needs, we review converging evidence supporting two hypotheses for self‐esteem's need‐monitoring function: (1) threats to needs lower self‐esteem and (2) high self‐esteem buffers defensive responses to need threats. We expand on established theoretical and empirical work in the domain of self‐esteem and also discuss testable future hypotheses.

Free will as a process of generative self-construction, by which an iterative search process samples from experience in an adaptively exploratory fashion, allowing the agent to explore itself in the construction of alternative futures

Neurocognitive free will. Thomas T. Hills. Proceedings of the Royal Society B, Volume 286, Issue 1908. July 31 2019.

Abstract: Free will is an apparent paradox because it requires a historical identity to escape its history in a self-guided fashion. Philosophers have itemized design features necessary for this escape, scaling from action to agency and vice versa. These can be organized into a coherent framework that neurocognitive capacities provide and that form a basis for neurocognitive free will. These capacities include (1) adaptive access to unpredictability, (2) tuning of this unpredictability in the service of hierarchical goal structures, (3) goal-directed deliberation via search over internal cognitive representations, and (4) a role for conscious construction of the self in the generation and choice of alternatives. This frames free will as a process of generative self-construction, by which an iterative search process samples from experience in an adaptively exploratory fashion, allowing the agent to explore itself in the construction of alternative futures. This provides an explanation of how effortful conscious control modulates adaptive access to unpredictability and resolves one of free will's key conceptual problems: how randomness is used in the service of the will. The implications provide a contemporary neurocognitive grounding to compatibilist and libertarian positions on free will, and demonstrate how neurocognitive understanding can contribute to this debate by presenting free will as an interaction between our freedom and our will.

1. Introduction

Free will can be defined as the ability to be free from one's past and yet to simultaneously act in accordance with one's will. This is an apparent paradox because it requires that free will be an ahistorical process governed by a historical identity. The goal of this article is to show that by grounding the design features of free will called for by philosophers in a contemporary understanding of neurocognitive capacities we can resolve this paradox and understand how free will could work in a neurocognitive system.

The design features of free will have been proposed by two primary philosophical camps: the compatibilists—who hold that free will is compatible with a deterministic universe—and the libertarians—who hold that free will is compatible with an indeterministic universe. The classical compatibilists (such as Hobbes, Locke, Leibniz, Mill and Hume) claim that an agent has free will if it could have done otherwise. The neo-compatibilists (such as Frankfurt, Watson and Bratman) claim that an agent has free will when lower-order desires are aligned with higher-order desires, sometimes called ‘wanting what you want’, which invokes a hierarchy of wants and volitions that some argue presupposes a wanting ‘self’. The libertarians (such as Descartes and Kant) claim that an agent has free will if this conscious self can rationally escape the causal certainties of determinism [1,2].

Discussions of free will have thus far failed to describe how these requirements could be met by a neurocognitive system. This has hampered progress on understanding how free will could work and enfeebled our understanding of ourselves at the same time. As a result, many have provocatively claimed that free will is an illusion because unconscious neural activity at least sometimes precedes or influences conscious activity [3–5]. If consciousness is bypassed in the decision-making process then the worry is ‘that the causal chain leading up to our actions bypasses the self’ [6], eliminating the kind of free will that many people want [7,8]. Indeed, many of these provocative claims point to unconscious ‘bottom-up’ control and use it to argue that a system has no conscious ‘top-down’ control (for a variety of arguments on both sides see [4,9–13]).

However, without an explanation of how a biological system could satisfy the design features of free will, we risk logical fallacies based on mistaking parts of the system for the whole. To overcome this, we first need to understand how free will could work as a set of neurocognitive processes. We can then assess free will in relation to an operationalized architecture that is grounded in biological reality—treating free will as a quantitative trait [14,15].

Before getting to the design features, it is useful to first define what I mean by conscious control as we will revisit this idea throughout. Conscious control processes are effortful, they focus attention in the face of interference, they experience information in a serial format (one thing at a time), they can generate solutions that are not hard-wired, and they operate over a constrained cognitive workspace—working memory—to which ‘we’ have access and can later report on as a component of conscious awareness [16–20]. When additional tasks are added to consciously effortful tasks performance suffers. Effortful processes sit in contrast to automatic processes, which are fast and parallel, and do not require conscious awareness. Effortful tasks can be made automatic through repetition (like reading and driving [21]) and when they become automatic they suffer less from the addition of a secondary task. Effortful and automatic processes are typically thought to sit at opposite ends of a continuum and the evidence provided below shows that they can influence one another.

The relationship between effortful processing (sometimes called executive processing) and conscious control is well documented (e.g. [16,18,22]). If we identify effortful consciousness with the self and this effortful self plays a role in satisfying the design features of free will discussed in further detail below, then what people mean by and want from free will are satisfied by our neurocognitive capacities.

The more controlling and invested the women were, the more they engaged in mate guarding overall as well as confronted rivals, publicized their relationship, escorted their partner, used covert tactics, monopolized, & were aggressive

Validity of the mate guarding scale in women. Alita J. Cousins, Lauren E. Beverage, Madeleine A. Fugere. Human Behavior and Evolution Society 31st annual meeting. Boston 2019.

Abstract: Mate guarding encompasses a variety of tactics including keeping partners committed, eliminating competitors, and keeping partners from leaving the relationship (Buss, 2002). Few scales exist that assess mate guarding and of those scales, the psychometric properties are mostly unknown. The current study set out to assess the psychometric properties of the Mate Guarding Scale. Previous analyses showed that the Mate Guarding Scale has six subscales: confronting rivals, publicizing the relationship, escorting partner, covert tactics, monopolization, and aggression. We collected data online from 1069 women. Results show that women who reported more overall mate guarding towards their partner had in turn been mate guarded more by their partner, were more invested and controlling in their relationship, and felt their relationship had more costs. Results showed that the more controlling and invested the women were, the more they engaged in mate guarding overall as well as confronted rivals, publicized their relationship, escorted their partner, used covert tactics, monopolized, and were aggressive. Women who resisted mate guarding, measured with the Resistance Behavior scale, engaged in more mate guarding overall, confronted rivals, escorted their partner, used covert tactics, monopolized, and were aggressive. These analyses show that Mate Guarding Scale has high validity.

Tuesday, July 30, 2019

Factors giving confidence to date girls: Of height, strength, athleticism, muscularity, erect penis size, flaccid penis size, face, hair, & weight, the only relevant factors were perceptions of relative strength and erect penis size

Masculinity and dating confidence. Ro Cunningham, Cassidy Best, Yasmin Akbari, David Frederick. Human Behavior and Evolution Society 31st annual meeting. Boston 2019.

Abstract: Physical features shape perceptions of a man’s masculinity. Many of the traits socially perceived as “masculine” are associated with testosterone level and/or are sexual dimorphic. Men with relatively high levels of these traits are represented as prestigious in the popular media, which reinforces the message that these traits are desirable, that men should strive to embody these traits, and that women find thest raits attractive. These social expectations increase pressure on men to display these traits, and can lead to body dissatisfaction and lower confidence seeking mates when they do not. Heterosexual adult men (N = 441) recruited through Mechanical Turk selfreported their satisfaction with masculine traits (height, strength, athleticism, muscularity, erect penis size, flaccid penis size, face, hair, weight) and also how they felt they compared to the average man. These were used as predictors of comfort with engaging in romantic and sexual activities (e.g., asking a woman on a date). After controlling for the other predictors, perceptions of relative strength and erect penis size were the only significant predictors of dating confidence. The same was true for satisfaction with these traits. The findings suggest these two factors are particularly important in men’s mating strategies and behaviors.

Aberrant brain gray matter in murderers

Aberrant brain gray matter in murderers. Ashly Sajous-Turner et al. Brain Imaging and Behavior, July 5 2019.

Abstract: Homicide is a significant societal problem with economic costs in the billions of dollars annually and incalculable emotional impact on victims and society. Despite this high burden, we know very little about the neuroscience of individuals who commit homicide. Here we examine brain gray matter differences in incarcerated adult males who have committed homicide (n = 203) compared to other non-homicide offenders (n = 605; total n = 808). Homicide offenders’ show reduced gray matter in brain areas critical for behavioral control and social cognition compared with subsets of other violent and non-violent offenders. This demonstrates, for the first time, that unique brain abnormalities may distinguish offenders who kill from other serious violent offenders and non-violent antisocial individuals.

Keywords: Brain imaging Homicide Voxel-based morphometry Violence Antisocial behavior

Poor test-retest reliability of task-fMRI: New empirical evidence and a meta-analysis

Poor test-retest reliability of task-fMRI: New empirical evidence and a meta-analysis. Maxwell L. Elliott, Annchen R. Knodt, David Ireland, Meriwether L. Morris, Richie Poulton, Sandhya Ramrakha, Maria L. Sison, Terrie E. Moffitt, Avshalom Caspi, Ahmad R. Hariri. bioRxiv preprints, Jun 24 2019.

Abstract: Identifying brain biomarkers of disease risk and treatment response is a growing priority in neuroscience. The ability to identify meaningful biomarkers is fundamentally limited by measurement reliability; measures that do not yield reliable values are unsuitable as biomarkers to predict clinical outcomes. Measuring brain activity using task-fMRI is a major focus of biomarker development; however, the reliability of task-fMRI has not been systematically evaluated. We present converging evidence demonstrating poor reliability of task-fMRI measures. First, a meta-analysis of 90 experiments with 1,088 participants reporting 1,146 ICCs for task-fMRI revealed poor overall reliability (mean ICC = .397). Second, the test-retest reliabilities of activity in a priori regions of interest across 11 commonly used fMRI tasks collected in the Human Connectome Project and the Dunedin Longitudinal Study were poor (ICCs = .067 - .485). Collectively, these findings demonstrate that commonly used task-fMRI measures are not currently suitable for brain biomarker discovery or individual differences research in cognitive neuroscience (i.e., brain-behavior mapping). We review how this state of affairs came to be and consider several avenues for improving the reliability of task-fMRI.

Significance Statement A biomarker with the potential to be useful in predicting clinical outcomes must yield values that are repeatable. We performed a comprehensive meta-analysis of the test-retest reliability of task-fMRI measures, which are widely adopted for biomarker discovery in neuroscience. We found that the meta-analytic reliability of task-fMRI was poor. We also investigated the reliability of many of the most commonly used task-fMRI measures in two datasets recently collected with cutting-edge scanners and methods. We found generally poor reliability for these task-fMRI measures. These findings indicate that many task-fMRI measures are not currently suitable for biomarker discovery or individual differences research in cognitive neuroscience.

Antisocial behaviour was consistently rated as less genetically influenced than prosocial behaviour; this was true regardless of whether genetic explanations were explicitly provided or refuted

Asymmetrical genetic attributions for prosocial versus antisocial behaviour. Matthew S. Lebowitz, Kathryn Tabb & Paul S. Appelbaum. Nature Human Behaviour (2019). July 29 2019.

Abstract: Genetic explanations of human behaviour are increasingly common. While genetic attributions for behaviour are often considered relevant for assessing blameworthiness, it has not yet been established whether judgements about blameworthiness can themselves impact genetic attributions. Across six studies, participants read about individuals engaging in prosocial or antisocial behaviour, and rated the extent to which they believed that genetics played a role in causing the behaviour. Antisocial behaviour was consistently rated as less genetically influenced than prosocial behaviour. This was true regardless of whether genetic explanations were explicitly provided or refuted. Mediation analyses suggested that this asymmetry may stem from people’s motivating desire to hold wrongdoers responsible for their actions. These findings suggest that those who seek to study or make use of genetic explanations’ influence on evaluations of, for example, antisocial behaviour should consider whether such explanations are accepted in the first place, given the possibility of motivated causal reasoning.

Strong evidence of profound gender-specific differences between men and women in terms of dietary habits, the taste of food and in the relationship with meal; women have greater nutritional knowledge

Lombardo, M., Aulisa, G., Padua, E., Annino, G., Iellamo, F., Pratesi, A., Caprio, M. and Bellia, A. (2019), "Gender differences in taste and foods habits", Nutrition & Food Science , Vol. ahead-of-print, Jil 18 2019.

Purpose: The purpose of this paper is to examine gender differences in food habits and food choices, including decisions in healthy eating, to personalize diet therapies to be as effective possible for long-term weight loss.

Design/methodology/approach: In this cross-sectional study, eating behaviours were assessed using a questionnaire composed of 12 questions concerning food habits, 17 concerning food taste, and four about healthy eating. There were 2,021 (1,276 women) Caucasian adults enrolled in the study.

Findings: Statistically significant differences in women compared to men occurred for the following questionnaire entries reading eating habits: whole grain food (10.0 per cent higher in women; p < 0.001); cereals such as barley (8.3 per cent higher in women, p < 0.001); cooked vegetables (6.6 per cent higher in women, p < 0.001); eggs (5.0 per cent lower in women, p = 0.03); meat (9.3 per cent lower in women, p < 0.001); and processed meat (7.1 per cent lower in women, p < 0.001). Women consume more water, sugar-sweetened beverages and alcoholic drinks than males, and liked salty foods more than sweet foods. Men ate faster, ate more during the night and slept worse than women. Men ate meals out more often and tended to be hungrier later in the day. Women missed more meals and ate more times during the day and were also more likely to eat uncontrollably.

Research limitations/implications: The authors observed strong evidence of profound gender-specific differences between men and women in terms of dietary habits, the taste of food and in the relationship with meals.

Practical implications: The findings suggest a need for the creation of gender-specific programs for promoting a healthy lifestyle.

Social implications: A need for the creation of gender-related programs for promoting healthy lifestyle has been demonstrated.

Originality/value: Reasons for the different eating behaviours among men and women have been found. Western society’s perception of the ideal body weight is much lower for women than for men. In general, social perceptions influence nutritional behaviour to a great extent. Women’s greater nutritional knowledge and sex-specific taste preferences also account for the differences in eating behaviour.

Women are less likely than men to comment online, particularly on state, national, or international topics, more likely to comment on local news

The Gender Gap in Online News Comment Sections. Emily Van Duyn, Cynthia Peacock, Natalie Jomini Stroud. Social Science Computer Review, July 26, 2019.

Abstract: Women are less likely than men to discuss or engage in politics. This study extends research on the gender gap in politics to an online context by exploring whether women are less likely to engage in political discussion online, whether this follows socialization theories of a private versus public sphere distinction, and whether perceptions of incivility help to explain these gender differences. Through a survey of commenters and comment readers based on a probability sample in the United States (n = 965) and a survey of actual commenters and comment readers across 20 news sites (n = 12,110), we find that women are less likely than men to comment online, particularly on state, national, or international topics. However, women are more likely than men to comment on local news. We also find that perceptions of incivility are related to commenting, although they do little to explain gender differences in commenting. Our results suggest that the gender gap in online political discussion is the product of women’s political socialization more so than the civility of the site.

Keywords: comment sections, deliberative democracy, gender, political discussion

Monday, July 29, 2019

Reactions to Male-favoring Vs. Female-favoring Sex Differences: The average man & average woman reacted more positively to the female-favoring sex differences

Stewart-Williams, Steve, Dr, Andrew G. Thomas, Jesse D. Blackburn, and Chern Y. M. Chan. 2019. “Reactions to Male-favoring Vs. Female-favoring Sex Differences: A Preregistered Experiment.” PsyArXiv. July 29. doi:10.31234/

Abstract: The primary aim of this study was to investigate how people react to research describing a sex difference, depending on whether the difference in question favors males or favors females. An additional aim was to see how accurately people can predict how the average man and the average woman will respond to such research. Western participants (N = 492) were presented with a fictional popular-science article describing either a male-favoring or a female-favoring sex difference (i.e., men/women are better at drawing; women/men lie more). Both sexes reacted less positively to the male-favoring differences, judging the findings less important, less plausible, more surprising, more offensive, more harmful, and more upsetting, as well as judging the research less well-conducted and studies of that type more inherently sexist. This reaction was driven in part by a belief in male privilege: The more strongly participants believed that men are privileged over women, the less positively they reacted to the male-favoring sex difference and the more positively they reacted to the female-favoring one (and vice versa for the minority of participants who believed that women are privileged over men). Participants predicted that the average man and the average woman would react more positively to sex differences favoring their own sex. This was true of the average woman, although the degree of own-sex favoritism was notably smaller than participants predicted. It was not true, however, of the average man who – like the average woman – reacted more positively to the female-favoring sex differences.

People who were least healthy regarding a behavior tended to be the most miscalibrated in their estimation for that behavior in the others

Miller, Jane E., Paul Windschitl, Teresa Treat, and Aaron M. Scherer. 2019. “Unhealthy and Unaware? Misjudging Social Comparative Standing for Health-relevant Behavior.” PsyArXiv. July 29. doi:10.31234/

Abstract: People sometimes modify their behavior based on whether they believe they do more or less of that behavior than others. But are people’s perceptions of their social-comparative status for behaviors generally accurate? The current research assessed accuracy and bias in perceived social-comparative status for a number of health-related behaviors. In two studies, participants estimated their social-comparative percentile regarding behavior frequency for 20 behaviors—pre-classified according to a 2 (healthy or unhealthy) x 2 (generally common or uncommon) design. Participants also reported their absolute frequency of engagement for the behaviors, and these reports were used to approximate people’s actual percentiles. Subjective percentile estimates were overly favorable for both healthy and unhealthy behaviors and were biased by a behavior’s general commonness/rarity. People who were least healthy regarding a behavior tended to be the most miscalibrated in their percentile estimation for that behavior. There was also support for a noise-plus-bias model of people’s percentile estimates.

A Libertarian With Doubts About Statism: Lessons from the East Asian Economic Miracle

A Libertarian With Doubts About Statism: Lessons from the East Asian Economic Miracle. Byrne Hobart. Medium, Mar 11 2019.

I’ve always had highly libertarian instincts, for both pragmatic and ideological reasons. You say civilians should be able to own rocket launchers, I demand that these rocket launchers not face a sales tax. But for me and people like me, the East Asian economic miracle poses a serious challenge: the greatest anti-poverty program in history involved not just a lot of capitalism, but a ton of state intervention as well. The history of East Asian economic growth in the last half of the twentieth century is a history of academics and the World Bank insisting that their policies couldn’t possibly work, followed by decades and decades of torrid growth.
So I decided to look into it. I read a few books (skip to the end for sources and recommendations), and learned a ton. As it turns out, though the Miracle is largely a triumph of capitalism, it also illuminates that economic growth depends on judiciously insulating certain parts of the economy from market forces.
In a way, you can look at success stories like Japan and South Korea as a different instantiation of two very American institutions: venture capital and private equity. The difference is that it was VC and PE as practiced by the state, rather than by individual companies; the timelines were longer, the plans were bolder, and the results were stunning.
No American company or investor has improved as many lives by as wide a margin as MITI, Park Chung-Hee, and Deng Xiaoping. But the methods are, at heart, startlingly similar: identify a critical inflection point, make a bold bet on an unproven market, “blitzscale” as quickly as possible, deftly react to crises, and carefully expose budding monopolists to hormetic doses of competition until they’re strong enough to monopolize on their own merits.
This is not just a theoretical exercise. An active trade policy has landed suddenly back on the policy menu in the US and other places. In the past, we’ve done it sort of shame-facedly, giving nice subsidies to Iowa in exchange for their tactically priceless supply of early caucus dates, periodically bailing out American companies when international exporters teach them the meaning of the word “competition,” and occasionally gesturing towards energy independence without putting any meaningful goals to paper.
But now we’re talking about trade in a more adversarial way, which is appropriate inasmuch as, in international trade, America has many adversaries — not places that hate us, just places that, as a side effect of their own policy goals, end up harming American economic interests. Of the many possible trade policies, most are bad and free trade is — on net, and in the aggregate — the best. However,the simple Ricardian model of trade makes a few untenable assumptions, and other countries have learned to exploit them. In the spirit of free inquiry and open debate, I am happy to explain why anyone who advocates either contemporary protectionism or contemporary free trade is wrong.
But we’ll have to start at the beginning: how did East Asian countries get so rich, so fast?

Origins: How Did the Boom Start?
I’d like to begin by rehabilitating another long-since discredited economist: you can’t really understand the Miracle until you learn to think like a Malthusian. Malthus’s original thesis was that since population grows exponentially and food production grows linearly (with some deviations), we’ll always tend to grow the population to the point that maximum food output can just barely support it, meaning that a single bad harvest leads to famine.
Granting the premises, this is true, and looking back at history, his premises arguably made sense. Populations had gone through boom/bust cycles before, albeit more driven by war and disease than by famine per se — but war and disease are both symptoms of overcrowding, so the model was predictive even though it mislabeled the terms.
Of course, the two mistakes he made were the two premises: as it turns out, food production can grow exponentially, while population growth slows as countries get richer and better-educated.[1] One important thing to keep in mind when you’re thinking like a Malthusian is to note that if your country is close to the Malthusian limit, it means the incremental farmer is not producing enough food to feed themselves — if the average person produces enough food for one person, and some people have good land, the more marginal land is necessarily producing less than that average. That’s important because the non-farming population is able to accumulate capital, which can eventually raise farms’ efficiency, at least on a per-farmer basis. While farmers invent a ton of stuff, they can’t manufacture at scale.
So the story of Western Europe, starting at around when Malthus published, went like this: Farmers produced enough resources to support some basic manufacturing; this manufacturing produced capital that made farms more efficient; fewer farmers required meant more manufacturing, setting off a virtuous cycle.
Arguably, the event that set off the Renaissance, and thus the Industrial Revolution, was the Black Death. By killing a third of Europe, it pushed us to well below the Malthusian limit, raised workers’ wages, and limited governments’ ability to tax city-dwellers. Things really started to take off in Northern Italy, which is also where the plague first arrived. Of course, it could have happened anyway, and could have happened elsewhere — the reason it hit in the first place was that trade had globalized enough that rats and fleas from China found their way to Venice, which wasn’t happening as much beforehand. But certainly the Bubonic Plague accelerated things by eliminating a lot of people and raising the marginal productivity of the survivors.
For countries that didn’t have Europe’s good fortune in getting a catastrophic plague right when their technology had advanced to the point that they could rapidly scale up non-agricultural productivity, there was some more waiting involved.
As Joe Studwell points out in How Asia Works, every one of the economic miracles started with land reform — in Korea and Japan, this was part of a series of postwar changes; in China, it happened a little later with the gradual rescission of agricultural collectivization.
Land reform’s effects were paradoxical: in the short term, the net effect was more agricultural labor. Individual farmers intensively working small plots can achieve much higher productivity per acre than big plantations can, at the cost of not being very scalable. But for a country on the edge of the Malthusian trap, that’s exactly what they need.
What happened next, in every successful case, was that governments decided as a matter of policy that they’d favor export industries, and in particular that they’d favor industries that could achieve long-term productivity growth. In some ways, these countries lucked out due to the Green Revolution: if agricultural productivity in general hadn’t started to rise, they would have been stuck at a slightly higher Malthusian limit.
In each case, the first inflection that set off the boom was land reform. After that, two things happened: First, each country had a trade surplus, and the smart ones invested it in capital equipment for stage two. Second, birthrates rose. Since they had previously been bumping up against the Malthusian limit, an increase in food supply led directly to an increase in babies.[2]
For policymakers, the name of the game is this: you have some hard currency, and some babies. In seventy years, these babies will retire, and the next generation may well be smaller. What do you do in 1950 to ensure that the retirement accounts of 2020’s 70-year-olds are as full as possible, so they can soften the impact of a high dependency ratio?

The process:
Invest the trade surplus from food into light industry, i.e. textiles — this is a business where the main input is unskilled labor, so any poor country with a port and a smidgen of capital is, presto, the global low-cost leader.
Invest the trade surplus from that into heavy industry (at first: steel and basic chemicals; eventually heavy machinery, cars, specialty chemicals, electronics).
Relentlessly push your heavy industry to export; sell products that can compete globally, even if you’re taxing your population to subsidize your exporters.
On that note: use aggressive financial repression; force people to save a high proportion of their marginal product (i.e. standards of living can rise, but should rise a lot less than GDP); direct that money into industries with economies of scale.
Once you are the scale leader in a scale-driven industry, you can relax. But only a little! Now you have to worry about somebody else copying you. Japan’s world-beating steel industry got copied by South Korea, and their car industry faced competition there, too; Japan also lost their lead in electronics to China.

Case Study: Japan
Postwar Japan was an economic basketcase. The country had lost over two million lives, and American bombings had wrecked their industrial capacity. Even before that, Japan’s militarist government had warped the country’s economic development through a focus on arming for conquest.
As a consequence of all this, Japan’s GDP per capita in 1950 was under a fifth of the US level. Today, Japan’s GDP per capita is about two thirds of the US level.
When you try to evaluate the Japanese system, it’s important to note that it does not at all work the way it looks on paper.[3] In theory, Japan is a representative democracy, in which voters elect legislators who pass laws, etc. etc. etc. In practice, their system during the last half of the twentieth century was a sort of technocratic dictatorship, in which the foundational rules were not a written constitution but a set of bureaucratic social norms.
The protagonist of Japan’s industrialization is the Ministry of International Trade and Industry, which determined Japanese industrial policy. In the US, we’re used to thinking of government bureaucracies as slow and unambitious, but in Japan that wasn’t the case at all: MITI got the country’s best workers (the pass rate for their most challenging exam was 2%), and had an aggressive up-or-out approach. Talented people quickly got more responsibility, and they wielded immense power.
When MITI decided that Japan should be a steel exporter, they gave steel companies enormous loans to increase capacity. When the industry got overbuilt, MITI forced participants to merge. Since steel had economies of scale and was a useful input for other kinds of manufacturing, MITI decided that so if Japan were to have a future, it would start with steel.
And MITI was right. Japan became the world’s largest producer of steel by the early 80s, and their dominance in steel gave them a huge boost in shipbuilding and machinery.
Here are three striking illustrations of how powerful MITI was (one political, one sociological, one cultural):
Japanese legislators could introduce their own bills, but these tended to get voted down. MITI could also suggest bills, which tended to get passed with near-unanimity. That Japanese Diet in the postwar period looked less like the US Congress than it did the Supreme Soviet of the Soviet Union. Once the legislators saw the bill, it was as good as law. In MITI and the Japanese Miracle, Chalmers Johnson argues that this was an efficient system because the legislators “reigned” (they were the public face of government, and enjoyed the electoral consequences of policy decisions) while bureaucrats ruled (i.e. they made the actual decisions).
A study of the family trees of prominent Japanese people showed that high-level MITI employees tended to have more socially-prominent fathers-in-law than fathers. MITI, in other words, was where ambitious and upwardly-mobile young men wanted to work. Why bother getting rich when you can get powerful instead?
There are no fewer than three novels about Shigeru Sahashi, a powerful MITI vice-minister. One of them got turned into a TV show. Imagine The West Wing, but the hero works at the Department of Commerce.
MITI seems to have had a work-hard/play-hard culture. The MITI cliques tended to center around senior employees who were generous with their liquor cabinets. After a grueling fourteen-hour day of designing and implementing industrial policy, how better to relax than to throw back some Suntory and spend a couple more hours… discussing industrial policy?[4]
Senior employees did get rich, through a tradition of Amakudari (“descent from heaven”) in which senior bureaucrats would, late in their careers, land C-level jobs at the companies they had regulated. In an American context, the assumption is that this sort of revolving door becomes a way for a company to buy influence, but in Japan it appears a bit different: Amakudari offered a way for bureaucrats to ensure that their recommendations were being implemented. (And to finally get a nice company car, of course.)
The Japanese industrial growth playbook, for industry after industry, looked like this:
Bureaucrats would pressure banks to make loans and pressure companies to add capacity.
They’d subsidize companies based on export volume — in other words, a company didn’t have to be profitable, but it did have to compete.
As companies scaled up, the subsidies dialed down. Sometimes this was due to international pressure (although they were adept at dodging that; when Japan finally stopped directly subsidizing exports, they started allowing exporters to depreciate equipment faster, which, for a profitable company, is economically equivalent to a direct subsidy).
Once the industry reached viable scale, they’d rationalize capacity — merge competing firms, shut down inefficient plants — and move on to the next.
Japanese postwar economic history was a long series of increasingly impressive export-driven economic booms, leading to a serious level of creative nicknames:


And then, in the 80s, things got crazy, and in the 90s things fell apart.
The denouement of the bubble is an instructive example of the limits of policy interventions: Japan was basically forced to stop artificially devaluing their currency, which led to a property and asset bubble, and then a long period of economic stagnation. Demographic collapse didn’t help — instead of benefiting from a baby boom, Japan faced a growing population of elderly people, who tended to sit on their savings even at zero interest rates. (The current yield on Japanese ten-year government bonds is -0.04%.)
But still, Japan is a rich country; growth may be slow, but “growth” is the first derivative of GDP, and their GDP is quite impressive. For most of its history, Japan was a poor country. After a few decades of aggressive industrial policy, it became a rich one. And while it’s not the richest it’s ever been, that’s not the metric that matters.

Case Study: South Korea
South Korea’s economic growth is basically a gritty reboot of Japan’s story. Japan was a technocracy disguised as a democracy; South Korea was a poorly-run democracy until a major general decided that the votes that mattered were from the people with guns.
South Korea was poor, like Japan — only poorer. They’d survived a war, like Japan — but in their case, they were invaded by a nuclear power, and with the help of another nuclear power they fought back to a stalemate. Japan is surrounded on all sides by water; Korea was mostly surrounded by enemies.
And yet, they got rich. As recently as the 1960s, South Korea depended on US aid to avert famines. Not only do they now export lots of steel, chemicals, cars, and phones, but their single biggest cultural export is an incredibly catchy song about the spiritual agony of living in a wealthy country.
There’s a sort of Girardian side to South Korea’s industrialization story: Park Chung-Hee’s attitude towards Japan was 1) idolizing their success, and 2) fiercely committing to destroying them. Park was educated in Japan and served in their military; as President he would sometimes stay up late reading books about their economy.

Would you buy millions and millions of new cars from this man?
The South Korean industrialization story kicks into high gear with the foundation of their steel company, POSCO. Korea needed money and expertise to build a steel plant, and they got both — from their historical enemy, Japan, in exchange for accepting a Japanese apology over colonialism. This is the kind of decision a popularly-elected leader can’t afford to make. Park Chung-Hee only did it because he believed that it was the right choice (and that tanks matter more than votes).
POSCO construction crews were reminded that the plant was built with Japanese war reparations, and that it was a matter of national honor that Korea supplant Japan — specifically, the foreman allegedly suggested to employees that if they couldn’t hit their deadlines, they should consider suicide.
From there, Korea expanded into chemicals, and, famously, cars. Like Japan, their government put immense pressure on banks to lend to manufacturers, and on manufacturers to sell abroad. And, like Japan, Korea depended on a loyal cadre of highly effective bureaucrats. Korea benefited from a side effect of being ruled by a military junta: the Korean military under Japan was the best-educated segment of society, so once they ran their own show, they did it well. Interestingly enough, Korea’s civil-service exams had a 2% pass rate — exactly the same as Japan’s. There were only a few good schools, so most of the senior bureaucrats developed strong social ties — good for coordinating plans, but bad for admitting mistakes.
Because the challenges facing South Korean were more dire, its actions were more extreme than those of the Japan: at one point, Park Chung-Hee nationalized the banking system and imprisoned the heads of most Korean chaebol conglomerates, suspecting that they were hoarding cash. (As it turned out, they weren’t; he let them go and loosened controls on the banks soon after.)[5] Park insulated bureaucrats from the political consequences of their actions, which allowed them to think further ahead than typical government employees. Under a corrupt system, that would be a disaster but under an efficient one, it was a boon.
The repeating pattern in South Korea’s growth was that exporters would borrow enormous amounts, over-expand, then lose lots of money and be forced to merge or go under while the government scrambled to get enough foreign capital to pay the bills. This system can’t last forever, but it’s basically running an industrial policy by making a series of Kelly bets: you maximize your long-term returns only by accepting a surprisingly high level of volatility.
This also explains some of South Korea’s otherwise bizarre foreign policy decisions. South Korea was the second-largest contributor of manpower to the Vietnam war, sending about five times as many troops as the #3 participant, Australia. This was a geopolitical bankshot: the point was not to keep South Vietnam capitalist, it was to guilt American troops into staying in South Korea.
South Korea’s policies under Park Chung-Hee make sense as an effort to address the existential risk of invasion by the North. This remained a live risk for his entire tenure; North Korean commandos regularly made incursions into South Korea, and they were likely involved in an assassination attempt that took the life of Park’s wife. This also explains Park’s repressive domestic policies — the Park regime brutally suppressed student protestors and labor unions. Their human rights record was not exactly enviable, but given the situation they faced it becomes somewhat understandable.

Here’s a Maslow’s Hierarchy of Needs for South Korea:


Park did not adhere to democratic norms, although South Korea eventually adopted a fairly representative system. What Park had instead of popularity was legitimacy, which I’d define as when society gives you permission not to ask for their permission. South Korea’s industrial policy was a series of high-risk, unpopular decisions, of the sort that would have been voted down by gigantic margins in any representative system. Fortunately for today’s Koreans, such a system didn’t exist: Park and his junta decided that they were the right people to run things, figured out what to do, and did it.

Singapore and China: The Missing Case Studies
If I’d written this piece before reading How Asia Works, I would have spent a lot of time on Singapore: it exemplifies the approach of using market signals for implementation but maintaining state guidance. Singapore also used a much more free-market approach than other countries. But, as Joe Studwell argues, Singapore and Hong Kong are not useful case studies, because free market policies work unusually well for city-states that prosper through trade and finance. If you have a port, and your port is close to a growing industrial powerhouse, you don’t have to plan ahead as much; you just have to avoid making any catastrophic mistakes. Singapore did exactly that, in fact; thanks to their government’s policies, they’re a lot richer than they otherwise would have been. But they’d still counterfactually be pretty rich, just by virtue of how much cargo and capital passes through their general vicinity.
Lee Kuan Yew gets a lot of mindshare for the same reason Churchill does — say what you want about his decisions, but he probably said it better in one of his books. LKY has a particular gift for gently making fun of American elite opinion, as if he’s just been cheered up thinking about how the American Cambridge houses even more eccentrics than the English one.
Singapore’s position as a port city in the general vicinity of several rapidly-industrializing countries meant that it could pursue truly laissez-faire policies and expect good results. Of course, the state intervened heavily in Singapore (it’s odd that such a capitalist paradise has most of its citizens living in government housing), but Singapore is an order of magnitude less economically intrusive than the other case studies.
It’s hard to prematurely optimize a port or a financial hub. You might somehow get an edge by knowing what raw materials are cheap to ship there, then assembling them and exporting, but touching the supply chain at only one point makes things tricky. At the same time, a city-state like Singapore does have the advantage that it’s relatively easier to maintain control, which means the government can tolerate more macroeconomic volatility, and that means that they can better afford to pursue to the monetary stability the IMF loves so much.
The math is just different when your riot police can walk across the entirety of the country in under an hour. The lesson of Singapore is that it’s good to have a port, and if you have one, your job is a lot easier.
In China, we have the opposite problem: if Singapore is hard to use as an example because it’s small-scale and doesn’t need to control its own destiny, China is hard to talk about because everything that happens there happens on such an enormous scale — and because, unlike the other countries I’ve discussed, China’s leaders see it playing a globally hegemonic role in the future. At one level, of course, they’d like to have a rich country because it’s nice to be rich. But at another level, they have manpower and want a similar amount of materiel.
This is important, because economic development in most countries has a more boring endgame: economically, most people want to live in 1950s America. China has different plans: yes, they want their workers to be rich — rich enough that they can take a vacation to Taiwan and visit landmarks like Xi Jinping Plaza and the Victims Of Kuomintang Atrocities Memorial.[6]
China is also hard to analyze because the anti-capitalist faction won their civil war, and capitalism only came back once those winners finally died. While their policies from the 80s on show a substantial amount of foresight, they didn’t need quite as much as Korea or Japan, because those countries had already done the hard work. Japan had to adopt ideas from 19th century neo-mercantilists, and Korea had to adapt them, but China just had to look at what had worked over the previous decades and do it at scale.
China also benefited from a rising tide of globalization. Their economic growth really kicked into high gear once they joined the WTO, especially since they were willing to drag their feet on issues like IP theft and protection. More so than the other case studies, China managed to implement a system of free trade for thee and protectionism for me, and use it to achieve dominant scale in industries with impressive economies of scale. Their plan seems to be to keep on doing this, with more and more industries, unless someone stops them. In Internet meme terms: if you’re at the top of a meritocracy and you rule for life, plus everyone you negotiate with is an elected official with a term limit, you’re a player character going one-on-one with NPCs.

Why These Techniques Work
Japan and Korea implemented similarly heterodox policies and saw similar levels of success. It’s worth looking at how some of these techniques worked in practice, and how they fit together. After that, I’ll address the implications for the US today.

Export Subsidies: Y Combinator for Steel
Export discipline is the single most powerful concept behind the East Asian Economic Miracle. The idea is simple: the only way to produce wealth is to make something people in other countries want to buy, but poor countries have a comparative disadvantage in complex manufacturing. The solution that worked for Japan, Korea, Taiwan, and China was simple: protect and subsidize exporters, but only subsidize them to the extent that they can actually sell something in other countries.
The car industry has punishing economies of scale. You need to design vehicles, source parts, and actually build them, and the minimum cost to do this is prohibitive. If you build one tenth of General Motors, you don’t earn one tenth of what GM does. Instead, you lose a lot of money, because you have a sub-scale factory that’s producing well below capacity.
But the counterpoint to that is that if you build something twice as big as GM, you’re going to make more than 2x what GM does, which means your incremental returns on capital are far higher. GM, at least in the mid-twentieth century, was mostly selling cars to Americans, and America was the land of abundant capital, high wages, and cheap oil — all of which were de facto subsidies for domestic auto demand. But those implicit subsidies applied to imports just as much as domestically-produced cars, so the industrial planners knew that if they achieved breakeven, they’d enjoy a long runway during which they’d produce higher returns.
One way to look at export subsidies is that, like in The Producers, they let a company sell more than 100% of its equity. In this case, the government is essentially “short” the exporter’s profits, and distributes the corresponding long position to the company’s management and the banks that finance its expansion. By ensuring that the people with a stake in the outcome are the ones who can make a better outcome happen, they align incentives towards growth.
This is a centralized, government-based riff on exactly the same logic as venture capital. VC also provides bridge financing to subsidize some behavior that’s unprofitable at small scale but very valuable at a larger scale — export discipline from MITI is economically equivalent to VCs who will fund a negative cash-flow business as long as it has high gross margins, low user churn, and network effects.
There are a surprising number of parallels between these policies and the way startups work:
Startups often sell to other startups at first. Salesforce did this in a big way; Y Combinator is a sort of Zaibatsu that gives startups instant access to a few hundred good customers.
Below-market salaries and big options packages make employees hard to poach, mimicking the effects that lifetime employment and government-sanctioned monopolies have on employee incentives.
Small group of people has no politics. Ten people working on a project is pretty apolitical. Fifty who come from the same extended social network and also share the same crazy mission will also be fairly apolitical.
There’s no immediate need to turn a profit, but intense need to show growth. A startup that gets valued at 30x sales in one round and 5x sales at IPO has a similar cadence of external cashflows to a steel company that starts out getting 50% of its revenues from export subsidies and matures with 95% of its revenues from real customers.
Essentially, these planners were building an industrial base for a future in which they’d be about as wealthy as the Americans. Japan, they knew, would eventually become a country where lots of people wanted to buy cars, radios, and appliances, and the best way to sell those domestic consumers quality products was first to compete for the wallet-share of the wealthier and pickier American and Western European consumer. Even today, Japan’s auto industry is implicitly and explicitly subsidized. As The Economist points out, Japan mandates expensive safety tests for cars after three years. Rather than pay for the tests, many consumers sell their used cars and upgrade to a newer model. Result: everyone in Ulaanbaatar drives a Prius.

Inflation: When It’s Not So Bad
The IMF is notorious for telling countries not to let inflation get out of control, and developing markets are equally notorious for bouts of severe inflation. Korea went through years of high-CPI growth, Japan had extreme inflation early in its development, and of course other developing markets to this day go through cycles of elevated inflation.
The argument against high inflation is straightforward: it makes it hard for investors to feel confident in the value of their assets, especially fixed-income assets. If you’re an ambitious technocrat, your country needs to issue lots of bonds, and your country’s banks need lots of foreign capital flows as well. High inflation makes that difficult.
The pro-inflation argument is a lot simpler: inflation is a side effect of fiscal or monetary stimulus, both of which accelerate growth.
In the case of the Miracle economies, demographics and cultural norms conspired to make high inflation an unusually prudent policy. For reasons that may never obtain again, the policies that South Korea pursued (which led to 10%+ inflation throughout the 1960s) were actually quite prudent. Japan’s inflation, a more modest mid-single digit rate during that time period, was also quite acceptable.

What both countries benefited from was the combination of:
Population growth driven by agricultural reform, which helped them escape the Malthusian trap and expanded family sizes (South Korea’s population grew by 2–3% per year throughout the 60s).
A set of cultural norms that strongly encouraged young people to support their parents.
If mom and dad’s pension loses 80% of its value in real terms, but your wages rise 4x over the same time period, it’s no big deal — your salary was their retirement plan all along anyways. Essentially, these countries could use families as an intergenerational redistribution mechanism, meaning that they only had to care about the aggregate change in the net present value of incomes, not the distribution thereof.[7]
As those same countries lapped the impact of their baby booms, and started seeing low-to-negative population growth, they faced harder policy decisions. Fiscal stimulus dilutes the net worths of old people on fixed incomes, and those people vote. Meanwhile, monetary stimulus tends to help them, which pushes East Asian economies towards zero interest policies.

Corruption: Also Not So Bad
Samuel Huntington has a very illuminating line about corruption:
“In terms of economic growth, the only thing worse than a society with a rigid, overcentralized, dishonest bureaucracy is one with a rigid, overcentralized, honest bureaucracy. A society which is relatively uncorrupt — a traditional society for instance where traditional norms are still powerful — may find a certain amount of corruption a welcome lubricant easing the path to modernization.”
Call it Coasian corruption: you accept some level of bribery because the people who expect the best returns on investment are the ones willing to offer the largest bribes, and you can’t easily write the rules in advance (while you can retroactively refine them). In a sense, corruption provides a valuable signal: if your country’s senior automotive bureaucrat lives in a mansion while the most important steel bureaucrat lives in his parents’ spare bedroom, maybe steel isn’t your country’s most competitive export.
All of the Miracle economies have had corruption problems, but they often seem to be a side effect of wealth creation. After all, something can only get stolen if there’s something to steal.
Like inflation, a surprisingly high level of corruption is tolerable in the short term, but eventually becomes a problem. While it’s hard to measure, the real heuristic is this: corruption is prosocial in a developing market when it helps skirt rules that discourage wealth creation. It becomes a problem when the prospect of corruption encourages rules that stymie growth.
In China, a major source of corruption is the sale of land. Land is, in effect, owned by local governments, who must sell it to pay their expenses. And land in China is quite valuable. Naturally, many land purchases involve consulting fees paid to offshore companies that happen to be controlled by the immediate family members of the people in charge of deciding which factory owner gets which plot of land. If the result is that factory owners competitively seek out the best places to build new plants, and start construction as quickly as possible, then it’s a net boon to Chinese growth. But it’s also a signal that the land-sale system needs to get formalized.
China has passed the point at which additional corruption lubricates rather than retards growthThey may have reached the dangerous point where crooks are sufficiently entrenched such that they can’t be easily dislodged. But Japan and Korea have had massive bribery scandals in the past while continuing to grow right through them, so while this is not ideal it’s hardly catastrophic.
As the economy matures, of course, it does get catastrophic. You can take the converse of Huntington’s argument: if corruption is helpful when the rules don’t make sense, it’s harmful when they do. At 10% GDP growth, any government policy runs the risk of being obsolete by the time it’s implemented; at 2% growth or 0% growth, that’s no longer the case.
IP Piracy: Great Artists Steal
One good business model is to spend a lot of money upfront to produce some fantastic new technology, and then sell a unique and high-margin product based on it.
For an even more profitable model,skip the expensive R&D and just copy somebody else’s work. This is a time-honored tradition; as Ha-Joon Chang points out in Bad Samaritans, Renaissance England once had comically aggressive industrial espionage laws (if you told the perfidious Dutch the secrets of English textiles, you could be executed).
This practice is ubiquitous — China is famous for technology-transfer deals today, but Japan did exactly the same thing to IBM and the car companies a few decades ago, as did Korea. The defense of it is a kind of quirky utilitarian argument: it’s not like Japan was going to buy very many IBM mainframes or Cadillacs at full-price in 1960, so the existence of cut-rate copies is no great loss.
Both Japan and Korea significantly dialed back the IP theft as they advanced, and started doing their own R&D instead. Today, there are many industries where the US would benefit from filching East Asian IP — but, of course, we don’t have governmental air cover should we attempt to do so, and Japanese and Korean companies are not especially excited to invite American engineers and researchers over to tour the lab and learn their secrets.
China, on the other hand, has not pulled back. As a result, they’re facing the consequences that Japan and South Korea were able to avoid: the inability to cooperate with R&D efforts at American and European companies, and retaliatory trade actions.
This strategy is not, of course, unique to industrial policy. Basically any online community that allows user-generated content will benefit from allowing users to generate lots of content by pirating it. The usual model is that you slowly crack down on the stolen stuff, and grow your legitimate business to the point that when you do finally pay a fine or settle a lawsuit, you’ve grown your way out of the fine. If you get fined 100% of your revenue for allowing piracy, but you grow your business 10x by the time you actually pay the fine, you’ll survive. Perhaps China’s planners are performing exactly the same calculation.

Financial Repression
Successful industrializers use a broad array of tactics to raise the savings and investment rate in their countries.
I should emphasize three things about this regime:
1. It’s unpleasant for the people who live through it.
2. It’s nice for their descendants.
3. I don’t want to be the kind of person whose descendants grumble that all that consumption must have been fun for you, dad. Better to have kids who know that you’d chew broken glass to build them a better future.
The two basic levers for financial repression are encouraging saving and discouraging consumption. Most industralizers use high tariffs and capital controls to keep people from consuming.
Direct tariffs work as a means of reducing local consumption, but trade treaties often preclude them. Fortunately for savvy countries, there are ways to apply indirect tariffs, too. Japan has a large wholesale industry: according to Johnson’s MITI, in the late 60s, Japan’s wholesale sector generated almost 5x the revenue of Japanese retailers, compared to a 1.3:1 ratio in the US. This oversized wholesale industry served two purposes: it was a welfare/retirement program for unneeded workers in manufacturing companies, and it meant many layers of red tape for companies exporting to Japan. If every middleman charges foreign companies just a little bit more, the total “middleman tax” is raised to the power of the number of layers of middlemen.
One of the important levers Japan and Korea pulled was on the savings side: by reducing people’s opportunities to spend money, they forced them to save, and both countries artificially reduced interest rates on deposits, generally to below the rate of inflation. In other words, savers were literally paying banks to hold on to their money.
Why did savers do this? It’s unclear whether this was an explicit goal or a lucky accident, but macroeconomic volatility coupled with a weak safety net for individuals places enormous pressure on people to save money. If you don’t have unemployment insurance or welfare, and your friends and family are all desperately poor, you need to rely on your own savings if you get laid off. High GDP growth gave people enough money to save, and the risk of a recession gave them an incentive to.
These savings constituted free money for banks. In return, the state required banks to make uneconomic loans. In a poorly-functioning system, this would have the inevitable result that either banks would avoid taking risk, and just collect the profits on their cheap deposits. Or they’d make loans to well-connected borrowers, rather than to the companies that represented the best prospects. In a system where ambitious people work in the private sector or legislature, that’s exactly what would happen — it’s exactly what does happen, even in developed countries with stable institutions, like the US. But in the Miracle economies, the most ambitious people were the ones telling banks where to lend, not the ones doing the borrowing or the lending, or taking political credit for the jobs that resulted.
Financial repression is redistribution from individuals to big business, but in a less individualist country, “big business” is something closer to “national wealth held in trust.” So it’s really redistribution from present consumers to future consumers. This is also unfair! Utilitarians would be aghast at the idea of taking money from the poor and giving it to the rich, and in global/historical terms, the Japanese in the 50s were poor while their present descendants are rich.

Banks Over Bonds
James Carville liked to tell a joke: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.” Markets are great at allocating resources, but they’re often quite reactive. Carville was right about that: if bond investors are mad, you’ll know about it. As a result, any business or country that relies on capital markets for funding faces immediate consequences if it doesn’t follow those markets’ conventional wisdom.
The alternative is to source capital from banks: bank loans don’t get quoted every day on an exchange, so even if something reduces the loan’s perceived odds of getting repaid, accounting rules allow bankers and borrowers to live in denial. This later turned into a huge problem in Japan, Korea, and China; all three countries suffered from zombie banks that financed zombie companies, while in a more open market the result would have been bankruptcy. But during the growth phase, a banking system can grow its way out of early problems.
Growing out of one’s problems is generally an imprudent strategy. That’s what burned the S&Ls and junk bonds in the 80s, and it’s been the bane of consumer lenders and insurers for longer. But since the Miracle economies focused on industries with economies of scale, growing out of the problem really did work. Korea forced its marginal auto manufacturers to merge or shut down, but the survivors can service their debts.
Banks have another advantage in a country with a well-run government that can ignore near-term popular pressure: they serve as a more direct conduit between fiscal/monetary policy and economic behavior. When MITI or the Korean industrial planners decided that their economy needed a little more juice, they ordered banks to lend more, which immediately resulted in higher capital expenditures and quickly added jobs. A bank-based system, in other words, means there’s a direct conduit from a central bank’s lender-of-last-resort status to balance sheets, companies, and workers. Savers get dinged by this, but the logic of financial repression holds: savers are saving because of the risk of macro instability, so diluting the inflation-adjusted value of savings while cushioning the blows from a recession can be a wash, or even a win.
A system like the US Fed has to operate more indirectly, by tweaking short-term risk-free interest rates in the hope that this will propagate through the entire rate curve and affect credit spreads in a predictable way. I’m sure Bernanke would have liked to just order every bank in the US to lend lend lend until the vaults were empty. When short-term rates hit zero, central banks have to intervene more, but in a US and Western European context they prefer a shotgun approach to a sniper rifle.

Policy Implications for the US
As a capitalist, I believe everyone has a right to try to get rich. As an American, I welcome their efforts to do so, at the expense of any country but one.
As we’ve seen, the policies pursued by the Miracle economies produced better results than are implied by classical economic theories. That observation doesn’t invalidate the theories, it just illustrates their limitations: “If X and Y, then Z” implies “If not Z, then not X or Y.” Good candidates for X or Y include perfect competition and constant returns to scale.
In a Ricardian model, a country should always focus on whatever it has a comparative advantage in. The model that works is to focus on what you could have a comparative advantage in, and do whatever it takes to get that advantage.

Considering this, what limitations does the US face in responding to these policies?
Our government employees are not high-status, and there’s not a clear path to making them so. The recent shutdown a striking case in point. This Vox piece summarizes the standard view of the shutdown’s adverse consequences. 800,000 people were furloughed from their jobs. The concrete results Vox talks about are from how they spend their money. It’s assumed that the marginal productivity of the 800,000 least essential government employees is zero; there isn’t anything they’re supposed to be accomplishing other than cashing paychecks.
Granted, the shutdown did cause inconveniences, but these nearly always fit the same pattern: “This is illegal unless specifically approved, and the person responsible for approving it has been deemed inessential and is not at work today.”
I don’t mean to imply that all government employees are completely ineffectual, just that being ineffectual is not a bar to continued employment. The most predictive model of the modal government employee in the US is that they’re collecting a pension from day one, but they have to wait in line for roughly forty hours a week to receive it. Fortunately, they can entertain themselves while waiting.
Japan, China, and Korea all benefited from a long tradition of high-status civil servants. Korea and China had a government strongly influenced by the military (in Korea because the military seized power; in China because the military wing of the Party conquered the country.) In both cases, they traded off their recent record of military success. The US military isn’t going to match that level of status any time soon. While it’s an incredibly impressive organization in many ways, it’s been a long time since we’ve had a morally and strategically unambiguous victory.[8]
Our deep capital markets make it hard for the government to direct capital to strategically important industries, but given the status gap that’s a good thing. If the smartest and hardest-working people are in the convincing-bureaucrats-this-is-a-strategic-imperative business, the result will be that any business that can absorb a lot of capital and employ a lot of smart people will benefit.
Robust capital markets make it hard to hide short-term pain. If the loans backing POSCO or the South Korean chemicals industry had been traded on open markets, they might have dropped from 100 cents on the dollar down to 50 or less as the project struggled to take off. But on a bank’s balance sheet, a loan that hasn’t defaulted yet can be marked to 100, 100, 100, every year, for as long as necessary.
This is not strictly a disadvantage. It means the American system is great at pruning dead wood. We don’t make very many televisions, shirts, or shoes these days, because domestic manufacturers quickly lost access to capital. But it also means that industries going through what might be only a temporary low point can easily go to zero and never come back.
We view ourselves as the world’s good guys. When I talk to people about US free trade policy, one of the concerns is the effects that our policies have on workers in the third world. (This is not necessarily a well-informed concern. Back when he was interesting, Paul Krugman liked to point out that if you think a sweatshop sounds bad, you should ask yourself what kind of alternative employment made that sweatshop sound so good.)
In my readings, I did not see very many discussions at MITI about how their policies would affect Detroit. They seemed pretty concerned with how things would go in Nagoya. Detroit, they seem to have assumed, would take care of itself. (Or not.)
If you’re using traditional Ricardian thinking, MITI got it wrong: the global utility-maximizing move is to have everyone focus on whatever they’re currently good at. If you’re trying to gain an advantage over someone, the deadweight loss will hit you just as hard, or harder. That applies when comparative advantages are static, but not when they change over time. A change in comparative advantage is an abstraction. How it happens, concretely, is that a big new factory opens in one country and an older, smaller factory closes in a different, richer country.
Only if you’re willing to take actions that keep a relatively poor country relatively poorer than it otherwise would be can you run an effective industrial policy in a wealthy country. (Since poor countries have minimal domestic demand and cheap labor, their best option is to find products that are already in demand globally and could be made for less. In other words, they optimally compete head-to-head with incumbents.)
The idealized neoliberal view is that as countries get wealthier, they lose their comparative advantage in manufacturing but gain an advantage in services. Everyone loves American movies, right? Who cares if they don’t really want our cars?
Movies are a pretty small business (the global box office is about $40bn/year, compared to around $4tr for the global auto industry. Auto revenues grow by several movie industries’ worth in a good year.). And while there are economies of scale, they tend to apply to things like plugging known acting talent together with well-known directors who can raise money from the right producers, etc. These don’t produce serious, globally-dominant industries with rising incremental returns on investment.They just give you Hollywood, Bollywood, and Nollywood; three small, separate local maxima.
Movies are an unfairly kind example to choose. Those we can export. American healthcare is mostly consumed and produced domestically, our retail industry is overwhelmingly focused on satisfying local demand, and our financial services industry also primarily matches local savers to local borrowers. Neoliberal policymakers will argue that as we deindustrialize, older workers will retrain. I’ll believe it when Cato fires their economics PhDs and replaces them with much more affordable former steelworkers.
Software is the big bet here. A US economy whose growth is dominated by global software giants, headquartered here, would indeed allow us to de-industrialize. In fact, it would more or less force it to happen. At scale, software companies produce high margins and don’t require much capital, so their ROIs are enormous. (And the big incremental expense that they do have is marketing, which is increasingly just revenue for a different software company.) As a result, they attract investment to the US — but since they’re high-margin businesses, they don’t produce much trade surplus relative to their profits. The result is a trade deficit that’s driven as much by supply of capital as it is by domestic demand for consumption.
This is a very big bet to make, and it’s a bet that we’re making blindly.
What we should explore instead is a policy of directly countering any country’s industrial policy to the extent that it’s designed to attack an industry the US still dominates that benefits from scale. Basically we’d go down the Made In China 2025 list and figure out what level of export subsidies and cheap loans would ensure that every single one of those products is Made In the USA by 2024. This may technically be against the rules, but those rules are hardly sacred.
The beauty of a policy like this is that it inverts the logic that the Miracle countries relied on. They knew that they could only earn high profits by exporting at scale; our policy just has to maintain profits at incrementally higher scales. Ideally, such a policy framework doesn’t ever actually get implemented. The point is that it’s cheaper for incumbents to stay on top than it is for challengers to get on top, so as long as incumbents commit to staying that way, challengers bother somebody else.[9]
To paraphrase The Princess Bride, we’ve fallen victim to one of the classic blunders: Never be the last to realize that you’re involved in a trade war in Asia.
The challenge America faces is that a free trade system optimizes on the margin, while industrial policy focuses on changing the overall balance of power. Once an industry moves to another country, it’s expensive to move it back, and the longer it grows the harder it gets. This means we have a comparative advantage when defending the industries we still have, but that we lose a little more of it every year. If we don’t take manufacturing exports seriously, someone else will.

I started with Ha-Joon Chang’s Bad Samaritans, which is a great place to start if you’re a fan of free trade and love to argue. Chang’s book is mixed; there’s some good analysis, a little bit of “I got mine,” especially with respect to industrial espionage, and a couple dubious statistics.[10] But for an overview of the free trade skeptic’s case, it can’t be beat.
A less partisan but more persuasive work is Joe Studwell’s How Asia Works. This one’s a masterpiece: in-depth profiles of both successes (South Korea) and failures (Malaysia), full of great lessons. My case studies draw heavily from this book. One of my favorite details, from a chapter on how a corrupt democratic process stymied the Philippines: they once had an election in which Marcos spent so much money buying votes that it literally triggered a balance of payments crisis.
The Park Chung-Hee Era: I came away from this book with a lot more respect for Park, who was clearly one of the great statesmen of the twentieth century — a century that, considering the challenges it presented, was sadly lacking in greatness and statesmen.
MITI and the Japanese Miracle. Like no other book I’ve read. It’s like Carlyle, but instead of the Great Man theory of history it’s the Great Bureaucracy theory.
Alexander Hamilton’s Report on Manufactures. Sadly, there is not a hip-hop version available (“You say you fear a tariff/But the Brit is who you’ll scare if/You raise your nation’s output/and they learn too late what’s afoot.”)
Friedrich List’s The National System of Political Economy. An economist who set out to refute Adam Smith. Prussia implemented this, the Meiji government in Japan cribbed from it, and Park Chung-Hee cribbed from them. He couldn’t have known that the ultimate result of his work was Volkswagen and BMW losing market share to Toyota, Honda, and Hyundai.
Clashing Over Commerce is a wonderful history of trade policy. As is traditional in US history, there was a lively intellectual debate over the proper approach to trade policy, which had nothing whatsoever to do with how Congress ultimately behaved. In industrial policy terms, academia and the media manufactured soundbites, which were a low-margin, easily-copied product in which it’s hard to get a durable competitive advantage.

[1] Note that while this is true broadly, it’s not true for everybody. Some groups, particularly religious groups, have far higher fertility rates. Hutterites, for example, have about ten kids per family. That’s a lot, although the timescales are quite long.
[2] As an American who was born in the late twentieth century, I’m not used to thinking of famines as something that happen to anybody I’d know. But South Korea relied on US food aid to avert famines as recently as the mid-60s.
[3] That’s true of any country, of course. My grade school social-studies class managed to explain How A Bill Becomes A Law without saying anything about lobbyists writing bills, legislators leaking trial balloons, or the crucial importance of getting Mitch McConnell on your side.
[4] “Management-by-binge-drinking” is a pattern that shows up just often enough to be worth researching some time. Other examples include the management team of RJR Nabisco (pre-LBO) and the court of Peter the Great.
[5] India recently experimented with a similar policy, on a wider scale, and they, too, discovered that there wasn’t as much dirty money floating around as they’d thought. This seems to be a recurring pattern — perhaps politicians assume that corrupt businesspeople would hoard cash rather than invest in productive assets, because that’s how corrupt politicians behave.
[6] It’s a topic for another piece, but: the reason the stakes are so high — for both China and America — is that China is a net oil importer with overseas territorial ambitions. Oil is a global market only because the American navy protects global oil shipments, and losing that protection, or facing a naval conflict with the US, would wreck the Chinese economy. But it’s the party line that Taiwan is a part of China. So China either a) needs to achieve naval parity with the US, such that we won’t try to stop them if they invade Taiwan, or they need to gradually backpedal on the whole Greater China thing. Headlines over the last few years give no indication that China plans to back down, at least while the current generation is in power.
[7] In the US, we’ve pursued a backwards redistribution policy, where we tend to bail out asset owners, i.e. the old, at the expense of pricing young people out of those same assets. Pumping money into the banking system to support residential real estate prices is a good way to stabilize the economy, but a system that only stays solvent with a relentless rise in the price-to-rent ratio is unsustainable. For much, much more on this, see my writeup of our broken mortgage system.
[8] The morally debatable nature of every successful US military campaign since World War Two is not because we suddenly decided to become a force for evil in the world. It’s because we’re such an important superpower that both sides of every conflict are at least making an effort to appeal to us.
[9] Sorry, Germany.
[10] For example, Chang lauds Petrobras as a “world-class firm with leading-edge technologies,” perhaps an oblique references to their many advances in the science of stuffing large amounts of currency into small paper bags and briefcases. The book notes that software piracy helps accelerate poor countries’ growth, and later complains that Western countries don’t spend very much money trying to cure Malaria — a pair of claims rendered poignant by how Bill Gates made his money, and how he chooses to spend it.