Category: Openness to C. D. Book

Jim Pethokoukis Asks Art Diamond How to Increase Innovative Dynamism

Jim Pethokoukis recently posted an abbreviated transcript of our conversation on his Political Economy podcast about my Openness to Creative Destruction: Sustaining Innovative Dynamism book.

Posted by Arthur Diamond on Thursday, August 6, 2020

Transcript of Political Economy Podcast Interview with Arthur Diamond on Openness to Creative Destruction

The lightly edited transcript was posted on July 30, 2020 on the American Enterprise Institute web site.

Yesterday Jim Pethokoukis posted a lightly edited transcript of my conversation with him on his American Enterprise…

Posted by Arthur Diamond on Friday, July 31, 2020

Art Diamond Interviewed on Curing Covid-19

On Monday, May 4, Jim Blasingame, the host of his nationally syndicated “The Small Business Advocate” radio show, interviewed me on issues related to my book Openness to Creative Destruction, and “Free to Choose a Possible Cure,” my April 17 op-ed piece on the web site of the American Institute for Economic Research. You can click on the links below to listen to each segment of the interview.

“Rational for Workers to Prefer a Seller’s Market in Labor”

If we adopt policies to maintain what I call a “robustly redundant labor market,” workers will have no reason to fear harm from free-trade and immigration. The policies that allow robustly redundant labor markets are described in my Openness to Creative Destruction: Sustaining Innovative Dynamism.

(p. C2) Unwilling to admit that the center-left has been largely captured by the managerial elite, many pundits and academics on the left insist that mindless bigotry, rather than class interests, explains the attraction of many working-class voters to populist parties that promise to restrict trade and immigration. But it is just as rational for workers to prefer a seller’s market in labor as it is for employers to prefer a buyer’s market in labor. Blue-collar workers who have abandoned center-left parties for populist movements bring with them the historic suspicion of large-scale immigration that was typical of organized labor for generations.

And as MIT economist David Autor and his colleagues have shown, voters in the U.S. regions hit hardest by Chinese import competition were the most likely to favor Donald Trump or Bernie Sanders in 2016. Strict environmental regulations, which impose few costs on the urban elites, can threaten the livelihoods and lifestyles of workers in the exurban heartlands, like the French yellow vest protesters who rebelled against a tax on diesel fuel intended to mitigate climate change.

For the full commentary, see:

Michael Lind. “Saving Democracy From the Managerial Elite.” The Wall Street Journal (Wednesday, January 11, 2020): C1-C2.

(Note: the online version of the commentary has the date Jan. 10, 2020, and has the same title as the print version.)

Lind’s commentary is related to his book:

Lind, Michael. The New Class War: Saving Democracy from the Managerial Elite. New York: Portfolio, 2020.

The latest version of the paper co-authored by Autor, and mentioned above, is:

Autor, David H., David Dorn, Gordon H. Hanson, and Kaveh Majlesi. “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure.” Working Paper, Oct. 2019.

My book, mentioned way above, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

87% of American Liberals Support Some Merit-Based Income Differences

In my Openness to Creative Destruction, I claim that most people do not care as much about inequality per se, as they do about unfair inequality. What they care about is the differences in income be roughly related to differences in contribution. I illustrate this by recounting a famous experiment that Frans de Waal conducted with capuchin monkeys. The evidence in the study quoted below, supports my claim.

(p. B3) In 2018, four economists at the Center for Experimental Research on Fairness, Inequality and Rationality at the Norwegian School of Economics conducted a huge experiment — mostly via face-to-face interviews — using the Gallup World Poll. The Norwegian team — Bertil Tungodden, Alexander Cappelen, Ingvild Almas and Erik O. Sorensen — worked with Gallup to survey 65,000 people across 60 countries about their beliefs related to the gaps between the rich and the poor.

Part of the survey was an experiment. Respondents were randomly assigned to different conditions and presented a real-life scenario: Two people were recently hired to independently complete a short assignment; they were both paid, but one was given an additional $6.

In the first group, survey takers were told that the additional $6 was given out randomly. In the second group, they were told the $6 went to the worker who was more productive in completing the assignment. In both cases, respondents were asked how they would divide the additional earnings: whether they would transfer none of it, some of it or all of it to the other worker.

. . .

American conservatives might assume liberals are averse to merit-based compensation. The experiment proves that’s not so. When told the bonus payment was made only to the most productive worker, only 13 percent of the liberals transferred all of the money equally to the less productive worker, which is within the margin of error of the American conservative response (10 percent).

Americans both liberal and conservative were more likely than most people worldwide to accept merit-based income differences. As one of the study’s investigators, Mr. Tungodden, mentioned in his public presentation on the study, people in richer countries were more likely than people in poorer countries to allow merit-based differences. In the rich and more egalitarian country of Norway, 88 percent of respondents transferred the bonus payment equally when told it was allocated by chance, but only 33 percent did so when allocated by merit.

For the full commentary, see:

Jonathan Rothwell. “THE UPSHOT; Think Only Liberals Will Share the Wealth? A Survey May Surprise You.” The New York Times (Friday, February 14, 2020): B3.

(Note: ellipsis added.)

(Note: the online version of the commentary was last updated February 14, 2020, and has the title “THE UPSHOT; Experiment Shows Conservatives More Willing to Share Wealth Than They Say.”)

The soon-to-be-published version of the research discussed above, is:

Almås, Ingvild, Alexander W. Cappelen, and Bertil Tungodden. “Cutthroat Capitalism Versus Cuddly Socialism: Are Americans More Meritocratic and Efficiency-Seeking Than Scandinavians?” Journal of Political Economy (forthcoming 2020).

My book, mentioned above, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

“Entrepreneur Sent Our Words Across an Ocean”

Cyrus Field is described as a “project entrepreneur” in my Openness to Creative Destruction book. In the op-ed linked-to below, I celebrate his achievement.

My book, mentioned above, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

“Never Say Die”

In my Openness to Creative Destruction book, I discuss the fulfillment and sense of adventure from pursuing a big, intense project. In the op-ed linked-to below, I praise the big, intense project of extending human lifespans.


My book, mentioned above, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.