One of my frustrations with the blogosphere--as those of you who read this blog know--is that I think that the immediacy of web publishing makes some people lazy. They type faster than they think; or they believe that a reaction is the same thing as an argument.
Case in point. The blogger known as Jane Galt had the following criticisms of my "Risk Pool" piece:
For starters, [Gladwell] attributes Ireland's success as the "Celtic Tiger" to falling birthrates, which (temporarily) reduced the dependancy ratio. He utterly ignores a more parsimonious explanation, which is that Ireland slashed its marginal tax rates in 1987, including a cut in the corporate income tax to 10%, which turned it into Europe's first outsourcing destination. If you look at the handy spreadsheet
I have uploaded, containing data on Irish growth from 1980-2005 obtained from the invaluable Economist Intelligence Unit, you will see that this fits the Celtic Tiger period much better than a 1979 relaxation of birth control restrictions. Moreover, since there is much evidence that economic growth causes falling birthrates by raising the opportunity cost of childrearing, even if there were a correlation it would be hard to say which way it ran. This also applies to his arguments about Asia and Africa.
Where to start? Let's ignore, for the moment, the quaint right-wing affectation of assuming that marginal tax rates are the most "parsimonius" explanation for all variety of complex human behaviors. Instead, let me make two small points.
1. "Gladwell" does not attribute Irish success to falling birth rates. David Bloom and David Canning do. Gladwell is a journalist. Bloom and Canning are two exceedingly prestigious economists at Harvard, who are considered world experts in the field of demography and economics. Gladwell was impressed by them. He talked to them. He read their work. He was convinced by them. But he didn't make this argument up on the back of his journalistic notepad. And to neglect the true source of this argument is to trivilize and demean it. This is not Gladwell v. Jane Galt; journalist v. blogger. It's world experts v. blogger. Just so we are clear on this. And acknowledging the origins of this idea means that you can't depose of the dependency ratio argument just by dismissing Gladwell. You may actually have to read Canning and Bloom.
2. Galt says that Gladwell neglects a more parsimonious explanation: Ireland's tax cuts. As we've seen, Gladwell did no such thing, because Gladwell didn't do an analysis of Ireland's economic growth. What about Bloom and Canning? Did they neglect the larger economic picture? Well, actually, no. In the "Celtic Tiger" paper, they construct a complex mathematical model to try and tease out the various factors that led to the Celtic miracle. They think that the opening up of Ireland's economy in the 1970's was very important. But the data, they argue, also suggest that the country's demographic transition played an important role as well. Bloom and Canning, apparently, are of the view that sometimes things that happen in the world happen for more than one reason.
All of this information is quite readily available in the "Celtic Tiger" paper, which is in turn quite readily available on a marvelous invention called the world wide web. The paper itself is just under twenty pages long. It can be read in under half an hour. It's not that hard. Trust Gladwell on this one.