Grasping Reality on TypePad, by Brad DeLong

• From Total Industrial to Limited War: An Outtake from "Slouching Towards Utopia?: An Economic History of the Long Twentieth Century 1870-2016"

• Hoisted from the Archives: James Buchanan (1997): Has Economics Lost Its Way?

• Comment of the Day: Charles Steindel: "One interesting thing in this material was Buchanan's groaning about how he was discriminated against in Navy Officer training relative to Yankee Ivy Leaguers. Herman Wouk's recent passing stirred me to reflect on this process. As was mildly fictionalized in the Caine Mutiny, Work was outstripped in his training class by none other than Jim Tobin. Yes, both Wouk and Tobin were northern 'Ivy Leaguers' (Wouk Columbia and Tobin Harvard). But the Jew from New York and the Irish kid from Illinois would surely not have seen themselves as more on the 'inside' than Buchanan...

• Comment of the Day: Cosma Shalizi: "Young... give[s] a table of average maximum 'leverages', which is something like 0.25 for the two most influential observations. This matters, because regression asymptotics are... about... leverage goes to zero.... If two observations (or clusters) are driving 1/4 of the estimate, asymptotics are irrelevant...

• Weekend Reading: Robert Heilbroner (1996): The Embarrassment of Economics

1. (23013): Mourning the Death of James Buchanan: "Daniel Kuehn gets it right, I think, on the significance of the career of the late Nobel Prize-winning economist James Buchanan: 'He got a lot right, with public choice and constitutional economics. He also got a lot quite wrong, particularly his take on the political economy of the Keynesian revolution. But he certainly was a talented and productive economist well deserving of his Nobel prize.' I would go somewhat further: he got a lot right that desperately needed to be gotten right and that nobody else would have gotten right in his absence. He made a difference in economics at more than the margin, which is something you can say of very few economists... | Six Faces of Right-Wing Chain-Forging Economist James Buchanan...

2. Abigail Adams (1776): Letter to John Adams: "What sort of Defence Virginia can make against our common Enemy?... I have sometimes been ready to think that the passion for Liberty cannot be Eaquelly Strong in the Breasts of those who have been accustomed to deprive their fellow Creatures of theirs. Of this I am certain that it is not founded upon that generous and christian principal of doing to others as we would that others should do unto us...

3. James Buchanan (1997): Has Economics Lost Its Way? https://delong.typepad.com/buch_econlostway.pdf

4. Dierdre McCloskey: Review of Buchanan, "Better than Plowing"

5. Wikipedia: Étienne Maurice Gérard: "1er Comte Gérard (4 April 1773–17 April 1852) was a French general, statesman and Marshal of France. He served under a succession of French governments including the ancien regime monarchy, the Revolutionary governments, the Restorations, the July Monarchy, the First and Second Republics, and the First Empire (and arguably the Second), becoming Prime Minister briefly in 1834...

6. Wikipedia: List of American and British defectors in the Korean War

Peng Dehaui (February 24, 1952): To the Zhou Enlai-Chaired Central Military Commission: "You have this and that problem. You should go to the front and see with your own eyes what food and clothing the soldiers have! Not to speak of the casualties! For what are they giving their lives? We have no aircraft. We have only a few guns. Transports are not protected. More and more soldiers are dying of starvation. Can't you overcome some of your difficulties?...

Total Industrial War

A total industrial war sees a state taking control of an economy and society via bureaucracy, mobilizing most young and some old men into its armed forces, and then hurling as much as it can of men, metal, and nitrogen-based explosives at an enemy so using up more than half of society’s productive potential in works of destruction. What is the point? The first aim is to keep the adversary from doing the same to you. The next aim varies: to establish for Germany a proper place in the sun and control of enough land and resources to support a very large and prosperous population; to establish for Japan an empire—a Greater East Asia Co-Prosperity Sphere—like those European powers had established in the 1800s; to end Hitler’s régime; to reform Germany’s politics and somehow transform it into a peaceful democracy; to end all wars; to keep imperial Germany from turning Russia into a puppet semi-colony; to end the encirclement of Germany by a hostile Russia and a hostile France; to demonstrate that Austria-Hungary can destroy Serbia in retaliation for its state-sponsored assassination of Austria-Hungary’s crown prince; to preserve the balance of power on the European continent; to demonstrate that one’s treaty promises are credible by preserving the independence and neutrality of Belgium as guaranteed by the provisions of the 1839 Treaty of London; to preserve the Union that is the United States of America; to end slavery on the North American continent; “that government of the people, by the people, for the people, shall not perish from the earth”.

Some of these secondary war aims are worth five years of death, destruction, temporary mass poverty, and strict rationing. Most are not.

George C. Herring and Richard H. Immerman (1984): "The Day We Didn't Go to War" Revisited: "Eisenhower's position is... characteristically elusive.... As early as 1951 he had entered in his diary, 'I am convinced that no military victory is possible in that kind of theater [Indochina].'... Like Dulles, he seems never to have been persuaded that the plan would work, and he was equally opposed to intervention in any form in the absence of satisfactory military and political agreements with France. In the week after Ely's departure, VULTURE was not discussed seriously at the top levels.... Eisenhower and Dulles agreed that the United States should go in only as part of a genuinely collective effort and that United States ground forces must not become bogged down in Asia...

Douglas MacArthur (March 23, 1951): Ceasefire Communique: "Of even greater significance than our tactical successes has been the clear revelation that this new enemy, Red China, of such exaggerated and vaunted military power, lacks the industrial capability to provide adequately many critical items necessary to the conduct of modern war.... Formerly his great numerical potential might well have filled this gap but with the development of existing methods of mass destruction numbers alone do not offset the vulnerability inherent in such deficiencies.... These military weaknesses have been clearly and definitely revealed since Red China entered upon its undeclared war in Korea. Even under the inhibitions which now restrict the activity of the United Nations forces and the corresponding military advantages which accrue to Red China, it has been shown its complete inability to accomplish by force of arms the conquest of Korea. The enemy, therefore must by now be painfully aware that a decision of the United Nations to depart from its tolerant effort to contain the war to the area of Korea, through an expansion of our military operations to its coastal areas and interior bases, would doom Red China to the risk of imminent military collapse. These basic facts being established, there should be no insuperable difficulty in arriving at decisions on the Korean problem...

Comment of the Day: Cosma Shalizi: "Young doesn't give a table of sample sizes, but he does give a table of average maximum 'leverages', which is something like 0.25 for the two most influential observations. This matters, because regression asymptomatics are basically about the limit where leverage goes to zero (rather than sample size to infinity as such). If two observations (or clusters) are driving 1/4 of the estimate, asymptotics are irrelevant. (Young does a lot with the bootstrap to show that the pre-asymptotics aren't great either.)...

Daniel Seligson and Anne McCants: Economic Performance Through Time: A Dynamical Theory: "The central problems of Development Economics are the explanation of the gross disparities in the global distribution, D, of economic performance, E , and its persistence, P . Douglass North argued, epigrammatically, that institutions, I, are the rules of the game, meaning that I determines or at least constrains E. This promised to explain D. 65,000 citations later, the central problems remain unsolved. North’s institutions, IN, are informal, slowly changing cultural norms as well as roads, guilds, and formal legislation that may change overnight. This definition, mixing the static and the dynamic, is unsuited for use in a necessarily time-dependent theory of developing economies. We offer here a suitably precise definition of I, a dynamical theory of economic development, a new measure of the economy, an explanation of P, a bivariate model that explains half of D, and a critical reconsideration of North’s epigram...

Let us be clear: any of the members of the FOMC who marked up their estimate of 2019 growth because of the strong first quarter is an under briefed moron, who does not belong on any forecasting or policy body: Tim Duy: Fed Sticking With "Patient" Policy Stance | Tim Duy's Fed Watch: "The minutes of the April/May FOMC meeting revealed that participants were generally comfortable maintaining the 'patient' policy stance initiated in January. While some policymakers recognized that special factors boosted the first quarter growth numbers, the mood was fairly optimistic: 'For this year as a whole, a number of participants mentioned that they had marked up their projections for real GDP growth, reflecting, in part, the strong first-quarter reading. Participants cited continuing strength in labor market conditions, improvements in consumer confidence and in financial conditions, or diminished downside risks both domestically and abroad, as factors likely to support solid growth over the remainder of the year...