Knowledge that Transforms

This essay reviews Till Time’s Last Sand: A History of the Bank of England, 1694–2013, David Kynaston’s history of the Bank of England (the Bank) from its foundation in 1694 to the present day. I focus on three themes running through his narrative. First, for much of that time, the Bank was a private company playing a public role; how did it manage to do this and why was it eventually brought into public ownership? Second, I examine the various attempts to constrain the Bank’s monetary policy to follow a simple rule; these almost invariably proved unsustainable unless the rule provided enough room for discretion. Finally, I cover the Bank’s journey to becoming the lender of last resort, together with its evolving attitude to the associated risk of moral hazard.

This essay reviews three recent books on the causes and consequences of student debt. In addition to increases in college tuition and fees, supply and resource constraints both contribute to the growing phenomenon of default: degree completion rates are relatively low, especially at two-year colleges. Default rates actually decrease with the amount of debt incurred, as students who incur more debt are more likely to complete degrees that bolster their earning power. These books suggest some promising policy options, but there are no quick fixes given that the net cost of attending both private and public colleges continues to rise.

There is growing interest in the history of economic statistics, and Eli Cook has provided in The Pricing of Progress: Economic Indicators and the Capitalization of American Life a fascinating account of the era of economic measurement prior to the creation of the modern System of National Accounts. The story illustrates the dual character of statistics, which is the product of political contestation and social structures, as well as the data by which we can interpret the economy. Appreciating this duality through the history of economic measurement helps explain why political polarization today often seems to play out as competing interpretations of the “facts.” In this context, the idea that GDP growth is a good measure of economic progress is increasingly being challenged, as both the “beyond GDP” agenda and digital disruption point to a growing wedge between what GDP is measuring and economic welfare. Economists should be engaging with the history of the statistics we use every day in order to be able to shape their future.

Mark Granovetter has written a deep and wide-ranging book on economy and society entitled Society and Economy: Frameworks and Principles. Economists, in particular, will find his discussion on the role of social networks in understanding the problem of aggregation—from micro foundations to large-scale institutional phenomena—especially relevant. And they will find much to ponder over the ways in which overlapping structures—of networks and institutions—shape human behavior and determine aggregate economic outcomes. The high-level and parsimonious style of this book is distinctive and sets it apart from much of contemporary social science. This style and the apparent unwillingness to engage closely with research developments over the past two decades may, however, mean that the book will have limited influence on ongoing and future research.

This paper reviews the book Why Muslim Integration Fails in Christian-Heritage Societies by Claire Adida, David Laitin and Marie-Anne Valfort (hereafter, ALV), providing an analytical perspective on the issues related to minority discrimination and integration in a host society. Building upon the sociological and recent economic approaches to cultural integration, we highlight the different mechanisms behind the existence of a discriminatory equilibrium between a majority group and a minority group in a given social context. The paper then discusses the specific case of the Muslim minority groups in the French context and outlines the strengths and limitations of the research approach expanded by ALV. We finally consider the policy proposals provided by ALV, assessing their viability, as well as the dynamic political economy constraints they might face in a Christian-heritage society.

The methodology of economics has been applied with increasing frequency to non-market behavior and interactions. Peter Leeson’s book WTF?!: An Economic Tour of the Weird illustrates both the promise and the perils of this practice. When applied judiciously to environments in which the strategic obfuscation of true motives is widespread, the economic approach can yield valuable insights. But when applied without proper attention to prevailing norms and values, the attempt to rationalize behavior can fall flat and invite ridicule. Economists seeking to understand cultural practices would do well to import insights from other disciplines, and temper their eagerness to export narrow conceptions of rationality.

Cigarette smoke (CS) is known to cause mitochondrial dysfunction leading to cellular senescence in lung cells. We determined the mechanism of mitochondrial dysfunction by CS in lung epithelial cells. CS extract (CSE) treatment differentially affected mitochondrial function, such as membrane potential, mitochondrial reactive oxygen species (mtROS) and mitochrondrial mass as analyzed by FACS, and were associated with altered oxidative phosphorylation (OXPHOS) protein levels (Complexes I-IV) in primary lung epithelial cells (SAEC and NHBE), and (complexes I and II) in BEAS2B cells. There were dose- and time-dependent changes in mitochondrial respiration (oxygen consumption rate parameters i.e. maximal respiration, ATP production and spare capacity, measured by the Seahorse analyzer) in control vs. CSE treated BEAS2B and NHBE/DHBE cells. Electron microscopy (EM) analysis revealed perinuclear clustering by localization and increased mitochondrial fragmentation by fragement length analysis. Immunoblot analysis revealed CS-mediated increase in Drp1 and decrease in Mfn2 levels that are involved in mitochondrial fission/fusion process. CSE treatment reduced Miro1 and Pink1 abundance that play a crucial role in the intercellular transfer mechanism and mitophagy process. Overall, these findings highlight the role of Miro1 in context of CS-induced mitochondrial dysfunction in lung epithelial cells that may contribute to the pathogenesis of chronic inflammatory lung diseases.

The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-first Century’s thesis is that violence and only violence significantly reduces inequality. It shows supportive cases of violence reducing inequality, especially World War II and the Russian and Chinese Revolutions, and highlights recent peacetime increases in within-country inequality. The great virtue of the book is to present a lot of evidence on both sides for the readers to judge the thesis for themselves. Other historical evidence is not supportive. Other measures of inequality, like absolute poverty or inequality between countries or groups, show many examples of violence making inequality or deprivation worse. The unequal burden of conscription, rationing, and casualties may also show war to be dis-equalizing. Also against the thesis is that recent peaceful globalization of trade, investment, and migration flows, including the rapid growth of China and India, has arguably reduced global inequality and absolute poverty to a historic extent.

In order to clarify the potential impact of a basic income, we argue that any discussion on whether to adopt a basic income policy should be framed within the greater context of the transfer system as a whole. In particular, such discussion should consider separately the issues of (i) the desired income distribution to be achieved and (ii) the most efficient way of achieving it through a transfer system. Further, we stress the importance of the non-take-up phenomenon in current transfer systems and discuss the potential necessity of a basic income policy in the age of automation.

China’s dramatic rise from poverty to global economic prominence has been accompanied by an equally dramatic increase in environmental damages. The book under review presents an exploration of economic and political economy factors that might bring about a reversal in emissions that contribute to high pollution loadings in large urban areas. The authors highlight preference shifts associated with rapid growth of per capita income and express optimism about government responses to demands for a cleaner environment. There are some indications that China’s largest cities are indeed getting cleaner air. However, total emissions (largely from heavy industry and coal-fired energy generators) continue to rise, and the mechanisms by which preference shifts turn into policy changes remain opaque. It may be that China’s most polluting industries are sorting into localities where either preferences for clean air are less pronounced or local governments are less responsive. This may match a positively selected counterflow of individuals seeking better environmental amenities and more responsive government.