Links - 25/02/17

1.  U.S Court of International Trade: "Snuggies are blankets, not robes or priestly vestments."

The U.S. Justice Department argued in court that Snuggies are apparel and should be subject to higher taxes than blankets. The court disagreed, and found that Snuggies should be considered blankets and taxed at a lower amount.

2. The advantage of being a black basketball player vs. a white basketball player in the NBA. 
Article interestingly suggests a reversal of typical racial roles in basketball.


3. "International Peacebuilding and Local Success: Assumptions and Effectiveness."  The question is not why peace - building doesn't work, but why it works at all:

 By contrast, programs that rely on different assumptions—such as: undesirable practices may help promote peace, peacebuilding efforts are not always necessary, and insiders have much of the required knowledge and capacity—are much more effective at supporting local actors to build long-term, sustainable peace.

4. In response to North Korea's nuclear tests, China banned all coal imports from North Korea.  Coal is North Korea's main export, and most of North Korea's coal is exported to China. It will be interesting to see the effect on North Korea's economy - GDP shrank 1.1% last year. Link is pretty interesting, perhaps even momentous - it indicates a change in China's normally lenient and supportive position of North Korea. Could the threat of North Korea wielding nuclear power be enough for China to pursue a stricter, more Western stance towards the rogue dictatorship?

5. The process of McKinsey & Company/BCG-style presentations.

Links - 18/02/17

1. Markets in cinema tickets: demand - based ticket pricing to be introduced in some Australian cinemas.

2. New study finds performance - enhancing drugs for chess. The article is fairly long. Basically, the drug actually slows the player down, but increases cognitive function, resulting in better moves.

3. Podcast recommendation: 99% Invisible.
It's about urban architectural/planning issues and stories. Previous podcast topics include: guerilla urban planners, unpleasant and hostile urban architecture (i.e benches that the homeless can't sleep on), and the politics of lawn maintenance.

4. "China: the economic story of our time." Interesting discussion regarding China and its economy.

5. Donald Trump's wall probably won't happen. Like all policy, it's getting bogged down in legal, bureaucratic and logistics problems:

None of the 38-member Texas delegation offered full-throated support of a complete border wall... that would impact Texas more than it would any other state.

Among many Texas Republicans in Congress, the concept, while popular with the party's base, collides with another conservative tenant: eminent domain. 

A wall would require the confiscation of ranching land near the Rio Grande, and several Texas Republicans expressed concern about the federal government taking away property — often held by families for generations — and the legal tangles that would inevitably arise from that. 

6. The liberalisation of China resulted in decreased productivity of American maths professors.

 The article also references the former U.S.S.R, another nation with a mathematically rigorous education sector whose liberalisation also had adverse consequences for American maths professors.
With gradually thawing relations between Cuba and the U.S, I wonder what the consequences of a loosening of Cuban  - American borders would have on the U.S high - skill labour market. My prediction is that professors can feel safe in their tenure - it isn't educators who are leaving for greener pastures but instead medical professionals. In an attempt to stem this "brain drain" from the medical sector, Cuba recently imposed a travel ban. It's merit as a viable solution is doubtful. More on this soon.

Improving reader engagement

New feature on the blog: reactions!

Below each post you can now "react" to certain posts. So far, there are only three different categories: 'interesting', 'challenging' and 'boring'.

 Most of my posts manifest because I think the content is either interesting or challenging. It recently occurred to me that people might also find my posts boring. So I am interested in seeing, out of these specific categories, what my readers think of each post.

For now there will only be 3, but based on the response the categories may change.

Also, if you view the Budding Statesman on mobile, you will now see the desktop version instead. The desktop version will be displayed on all platforms. This is in response to some feedback about the difficulty in finding certain widgets on the mobile version, such as the "subscribe" widget.

Happy reacting!

Update: the importance of social values within productivity

A month ago I made a post commenting on the interesting contribution that social values - such as long weekends, family time, etc  - made to productivity. Specifically, the relatively short and flexible working hours associated with the labour market in France and Germany seemed to be a significant boost to the productivity of the labour force.

Then today I read about the extreme, strenuous Japanese work culture, which is apparently contributing to the suicides of 2,000 people a year due to work - related stress. There are certain  highly - publicised cases where employees  have worked up to 100 hours of overtime in the months preceding their deaths.

 From the Guardian:

In its first white paper on karoshi in October, Japan’s government said one in five workers were at risk of death from overwork. The paper found that despite attempts by some companies to establish a better work-life balance, Japanese workers still spend much longer hours in the office than their peers in other countries.

According to the paper, 22.7% of companies polled between December 2015 and January 2016 said some of their employees logged more than 80 hours of overtime each month – the official threshold at which the prospect of death from work becomes serious.

With the apparently significantly longer and more intensive nature of the Japanese workforce - which arguably lacks so much social work - life balance that is has contributed to a decline in the sexual activity of Japanese citizens - it got me thinking whether the supposedly huge number of hours worked by Japanese employees was a strain on productivity.  In light of the apparent boost in productivity associated with the shorter - hour, socialist, employee - centric Franco - German model, this hypothesis could give significant merit to the importance of social values within productivity.


Average annual hours worked

Here is a 2014 chart from OECD data on the average annual hours worked. Average annual hours worked is defined as the total number of hours actually worked per year divided by the average number of people in employment per year. Overtime is included.

The chart shows that Japan is actually in the middle of the pack in terms of hours worked. The chart doesn't suggest that Japan's average annual hours worked is an extremity - far from it. Interestingly, Japan is closest to Italy in terms of average annual hours worked. Below are exact figures for hours worked for each country in the G8, organised in ascending order:

Germany: 1366.4
France: 1473.5
U.K: 1677.0
Canada: 1703.0
Italy: 1718.8
Japan: 1729.0
U.S: 1789.0
Russia: 1985.8

The plot thickens. Among developed, wealthy nations, Japan's annual average number of hours worked is relatively high, but still not the highest. Yet in the U.S and probably Russia (my knowledge about Russian society, and by extension Russian work life, is pretty limited) there are less cases of work - related suicide. So why are concerns especially prevalent in Japan, if there seems to be no extremities in work hours?

I think it is partly explained by the (unmeasurable) nature of the Japanese workplace/ work culture.

"The nature of the American employment system makes a difference for minimizing the risk of overwork suicide. American workers can switch jobs when they are under excessive pressure, unlike their Japanese counterparts who have often been bound to their companies via lifetime employment, which can be either bliss or a curse.

Moreover, Japanese companies emphasises the value of the company vs. the individual: employees are pressured to express their loyalty for their company. The influence of a highly traditionalist, 'honourable' Japanese culture can be observed, even in the operation of the workplace.


Are higher hours worked a lag on productivity?
Also,  there is still the question of whether this work culture is a lag on productivity.
There is still a fairly large difference of 300-400 hours between annual average hours worked in Germany and France and average hours worked in Japan.

Below are OECD data charts measuring GDP/ hour worked, a measure of labour productivity. However, labour productivity only partially reflects the productivity of labour in terms of the personal capacities of workers or the intensity of their effort. I have yet to find a better economic indicator. (Ideally, I would calculate labour productivity by dividing GDP by total number of hours worked. Unfortunately I haven't been able to find these stats online.)

G8: GDP per hour worked 

There is a trend amongst G8 countries - countries that have lower annual average hours worked per year generally have high GDP/hour worked - perhaps indicating that these countries are more productive.

For a more visual comparison:

Annual average number of hours worked:                        GDP/Hour, ascending:

Germany: 1366.4                                                                       Germany: 106

France: 1473.5                                                                           Canada: 105.1
U.K: 1677.0                                                                                France: 104.3
Canada: 1703.0                                                                           Russia: 102.4
Italy: 1718.8                                                                                Japan: 102
Japan: 1729.0                                                                              U.S: 101.6
U.S: 1789.0                                                                                 U.K:101.4
Russia: 1985.8                                                                             Italy: 101.1

There is a pretty general trend here. Lower average number of hours worked can correlate to higher GDP/hour, but the data doesn't indicate that it is causal.

Some countries, specifically Germany and France, have lower average number of hours worked and higher GDP/hour. As the data shows, Germany and France both have the highest and third highest GDP/ hour. France is also the country with the second least number of average hours worked - after France, there the general trend of number of hours worked/ year is significantly higher (France and Germany remain close at 1300-1400 hours worked, whereas the rest of the G8 have a range of generally 1600-1700, with Russia as the outlier.) This is reflected in GDP/hour - the GDP per hour of the countries with a range of 1600-1700, such as Japan, the U.S, the U.K and Italy (with the exception of Russia and Canada) are generally similar and range from $102-101. It almost seems as if the data can be separated into two groups: the 1300-1400 hours group with higher GDP/hour of approx. $104-106; and the 1600-1700 group with lower GDP/hour  of $101-102.

However, the data set does not follow this clear trend -  it contains several outliers that disprove this theory.

 Canada has the second highest avg. number of hours worked, yet has the second highest GDP/hour of $105.1 (which would place it in the same GDP/hour group as France and Germany, countries that have average annual work hours of approximately 300 hours less). Furthermore, Russia works approximately 200 hours more in a year, yet its GDP/hour is not significantly lower than the rest of the G8, and remains in the $101-$102 range.


Conclusion

So in conclusion, this analysis shows that hours worked do not openly influence the productivity. Instead, the unclear trend of the data indicates that it is the specific work cultures of each country that primarily impact productivity, proving that there is some importance in social values within productivity.

Links

There is probably a growing surplus on the Budding Statesman of 'link' posts. I do apologise for this, but I try to make 'links' a weekly instalment and sometimes there is little time to write more in - depth posts.

To make up for this, there are some super interesting links this week - possibly even the best yet:

1. "Lessons from the TV flat screen industry on why trade protectionism may ultimately undercut domestic industry anyway." Pointer from Chris Blattman.

2. Ageing populations do not necessarily result in economic stagnation (study).

3. When a Japanese doomsday cult purchased a remote sheep station in Western Australia in 1997. This same cult was later responsible for the 1995 sarin gas attack on the Tokyo subway.

4. Finding Australian law blogs. I've had real trouble finding active blogs that discuss Australian law, which is a real shame. From my impressions so far it is one of the more diverse and interesting blogospheres within the humanities domain. The majority of the ones I've found are listed on the side bar on the right, under the "Legal" section.

5. Really, really interesting review of Hannah Arendt's book "Eichmann in Jerusalem."

The Eichmann mentioned in the title is Adolf Eichmann, who organised the logistics of the Holocaust (i.e organising the transportation of Jews to trains and then on to concentration camps, etc.) After he escaped to Argentina after the end of WWII, the state of Israel discovered and kidnapped him and put him on trial in Jerusalem in 1960.

If you care to read, more information below the link.

Does 'peak education' exist?

This is from a recent study reporting on new evidence on the casual link between education and male youth crime, based on data from Queensland, Australia. It inadvertently analyses the effects of the 2006 "Enactment of the Earning or Learning education reform", which mandated an increase in minimum school leaving age:

...the analysis shed[s] significant light on the extent to which the causal impact reflects incapacitation, or whether more schooling acts to reduce crime after youths have left compulsory schooling. The empirical analysis uncovers a significant incapacitation effect, as remaining in school for longer reduces crime whilst in school, but also a sizeable crime reducing impact of education for young men in their late teens and early twenties. 

First of all, it is fantastic that such a policy encourages the application of education as a policy tool to target social issues. The study's results are a testament to the widespread and often immediate benefits of education across all ages.

So with the effectiveness and flow - on benefits of education apparent and even seemingly endless, it has got me thinking, is there a limit, or 'peak education', where the capability of education  reaches its full potential and the benefits begin to secede?

So far it seems to me that 'peak education' doesn't exit. A recent paper using data sets from the first half of the 20th century shows that mafia members who attained more education got paid more in the underworld.  Mobsters reap high rewards from investment in their education - the paper found that "mobsters have significant returns to education of 7.5-8.5 percent, which is only slightly smaller than their neighbours and 2-5 percentage points smaller than for U.S.-born men or male citizens."

Another case study: Singapore's over 65's (the official retirement age in Singapore is 62) are choosing to re- skill and stay in the workforce. Most older workers work in labour intensive industries, as cleaners, machine operators, etc. According to the OECD, (article from Bloomgberg) Singapore’s employment rate for those between ages 55 and 64 is now 66 percent, among the highest of the 34 nations in the Organization for Economic Co-operation and Development. So even in old age the benefits of re - education and re- skilling outweigh the costs.

Without evidence to the contrary, the conclusion is that peak education doesn't exist. Education, as a policy tool, is the gift that keeps on giving. And it also happens to align with the one of the core values of this blog: "the belief in the constant re-appraisal and questioning of mindset - thus the blog header, from the perspective of a student with developing ideas."

Considering the current 'digital' economy and the constant need to innovate and re -educate in light of technology,  education is indispensable both as a policy and as - dare I say it - a value.

Links - 03/02/17

1.  Somalian pirates re - imagine self governance. And the economics of the 'pirate economy':

For Somalis who live in coastal communities, the pirate economy is a considerable source of employment and income: there is a need for crews directly involved in the hijackings, and a local ground crew to guard captured moored ships. Among this exercise are entire administrative, legal, and financial teams, a network of financiers and shareholders, and guards to police the territory in which the pirates reside.  

...Pirates also face heavy fines for bad behavior, such as non-consensual sex or mistreating other crew members, which carries a $5000 fine and dismissal.

2. Sales of luxury Swiss watches decrease by 10% following a crackdown on corruption in China.

3. Challenging 2017 perspectives of Putin.

4. Why a top university runs a London State School on Soviet lines.

5. Facial recognition, fingerprints to replace passports at Australian airports.

A testament to self - governance

A side - effect of self governance: forgiveness of genocide?

From the Guardian:

Laurencia Niyogira and her nextdoor neighbour, Tasian Nkundiye, have become firm friends. But 22 years ago, at the height of the Rwandan genocide, Nkundiye murdered nearly all of Niyogira’s family, and left her and her siblings for dead.

“I am very grateful to her,” says Nkundiye. “Ever since I wrote to her from prison, confessing to my crimes and asking her for forgiveness, she has never once called me a killer. Now, I often leave my children with her when I have to be away from the village. She has set me free.”

...almost 3,000 victims and perpetrators live in the six reconciliation villages, a success PFR attributes to its emphasis on forgiveness. 

Aside from attending group discussions on conflict resolution, villagers also look after livestock together, grow maize and cassava in a co-operative, and share a common bank account to pay for their health insurance.

“We are motivated by the fact that we run this whole place ourselves,” says Niyogira. “No soldiers, no governmental presence.”

The story is fascinating in itself. But what interests me is that these villages operate almost entirely autonomously, with no governing institutions such as local councils, law enforcement or any legal bodies. The people of these communities are essentially left to themselves.

A little context: After the assassination of the then - president of Rwanda in 1994, over the course of 100 days more than 800 000 ethnic Tutsis were murdered, as well as any Hutus that refused to participate in the mass human destruction. An entire breakdown of civil and social relations between communities ensued. The government actively encouraged and propagated the murder of fellow citizens.

The fact that victim and perpetrator are able to live side by side - harmoniously, no less! - is a testament, or perhaps a side - effect, of 'small community self governance'. Small, tight - knit communities, without the influence of the government, resort to self governance anyway in the name of self interest. It leads to the formation of close bonds and institutional bodies, aiding reconciliation and the integration of values - values that would perhaps be lost with larger yet more 'detached' government input in large cities.

In fact, this is a trend that often happens when government is absent. I recall that Somalian pirates in the 1800's formed quasi - democracies and created "governing" bodies within their groups, without any outside influence and entirely of their own self - volition.

As Winston Churchill said, "democracy is the worst form of government, apart from all the others."

On another note, it also opens an interesting discussion into the powers of the state. Through the instruction of the Hutu government and after months of extensive propaganda,  Hutu civilians were pressured to arm themselves with machetes, clubs, blunt objects and other weapons to rape, maim and kill their Tutsi neighbours. The fact that such massacres were carried out between neighbours, colleagues and villages demonstrates the chilling effect of propaganda and provides a very striking example of cognitive dissonance on an extreme scale.