One becomes so accustomed to baseless claims of systemic racism that it is almost with delight that one finds such an accusation with an argument that is at least credible. And frankly, believable. Apparently an economist, Lisa Cook, a former student of Brad DeLong's, has been nominated for a position to the Fed and whose nomination is facing headwinds.
DeLong is making the argument that she should be nominated because she is such a good empirical economist and in doing so cites a paper of hers, Violence and Economic Activity, Evidence from African-American Patents, 1870-1940 by Lisa D. Cook.
While acknowledging its importance, I am not especially vested in the actions of the Fed and nominations to that organization. But I am interested in empiricism, history, the role of societal trust, and economic development and this paper touches on all four. From the Abstract:
Recent studies have examined the effect of political conflict and domestic terrorism on economic and political outcomes. This paper uses the rise in mass violence between 1870 and 1940 as an historical experiment for determining the impact of ethnic and political violence on economic activity, namely patenting. I find that violent acts account for more than 1,100 missing patents compared to 726 actual patents among African American inventors over this period. Valuable patents decline in response to major riots and segregation laws. Absence of the rule of law covaries with declines in patent productivity for white and black inventors, but this decline is significant only for African American inventors. Patenting responds positively to declines in violence. These findings imply that ethnic and political conflict may affect the level, direction, and quality of invention and economic growth over time.
It is a long paper but a quick scan seems to confirm DeLong's representation. Is the argument true? Possibly not. Cook is dealing with several challenging data issues. Among them: Is innovation strongly correlated with patent issuance? How do you distinguish patentees by race? How do you define major violence?
Reading through the details Cook has gone to herculean lengths to address these valid concerns. Certainly there is room for dispute, but it mostly seems at the margins. Seems like good work with a reasonable conclusion.
And which touches on a higher point. Violence of course should be condemned. Our governmental institutions should of course warrant being trusted. Explicit and structured racism is morally offensive.
Those arguments should be sufficient. But Cook connects the dots to observe one thing further. There is a cost to everyone if we accept violence, racism and untrustworthy institutions. We all pay a price, individually and collectively.
If patents are correlated with innovation and if innovation generates improved productivity and prosperity, two propositions I am comfortable stipulating, then a decline in innovation hits everybody.
Cook documents a 34% decline in innovation from African American inventors. A decline in innovation which necessarily affects everyone. A loss of innovation is a loss of prosperity and politics is never very far from pocketbook concerns (see Pocketbook Politics by Meg Jacobs).
Even if one does not accept the moral and ethical arguments against racism, there is always a pocketbook rationale which ought to draw attention.
Whether Lisa Cook is a suitable candidate, I have no idea. But this is interesting work.
UPDATE: Well, now I have an idea. Not suitable. If you do not support free speech, you do not belong in government or its agencies.
Lisa Cooks nomination hearing was today. She accused me of “spreading hate” in 2020 and wanted my speech restricted, see screen shot. Why? Was she referring to my tweet back then, where I took the position that defunding the police is absurd. Care to clarify, Lisa Cook? pic.twitter.com/emqhNnXiCv
— Harald Uhlig (@haralduhlig) February 4, 2022
Posts
No comments:
Post a Comment