Jim Heckman gave a rousing talk at UCLA today. There were only 250 slides in his presentation but he managed to show us all of them a couple of times as he toggled back and forth. In a nutshell, Jim is arguing that for too long we have all be too preoccupied with IQ. In Cambridge, I always sensed that there were many economists who believed in the vertical model of ability. It is ironic that economists wouldn't believe in comparative advantage and instead would celebrate absolute advantage. But, apparently there are other skills, softer skills, such as self control, concentration, etc. that help to determine our life outcomes. There is also comparative advantage. Some fields require pure IQ while others (economics?) require softer skills to succeed. Heckman is an optimist. He believes that early life interventions for poor kids can boost their non-cognitive skills and that this can improve later life outcomes. The problem is that his core production function of a quality human features dynamic complementarities. If you are invested in when you are age 2, your productivity gains at age 8 will be higher from greater investment and so on. The problem is that if you haven't been invested in by the time you are a teenager, it is too late and no GED or JTPA program is going to jump start you to greatness.
The really impressive part about Big Jim's talk is that he simultaneously was talking at the frontier of economics, and child psychology. I hope that the latter group of scholars have welcomed him to their field. Learning begets learning. Skill begets skill.
To learn more go here: http://jenni.uchicago.edu/human-inequality/
Switching Gears, Gib Metcalf gets a nice quote in today's new york times.
October 7, 2008
A Gift From the ’70s: Energy Lessons
By JOHN TIERNEY
The presidential candidates claim to see America’s energy future, but their competing visions have a certain vintage quality. They’ve revived that classic debate: the hard path versus the soft path.
The soft path, as Amory Lovins defined it in the 1970s, is energy conservation and power from the sun, wind and plants — the technologies that Senator Barack Obama emphasizes in his plan to reduce greenhouse emissions. Senator John McCain is more enthusiastic about building nuclear power plants, the quintessential hard path.
As a rule, it’s not a good idea to revive anything from the 1970s. But this debate is the exception, and not just because the threat of global warming has raised the stakes. The old lessons are as good a guide as any to the future, as William Tucker argues in “Terrestrial Energy,” his history of the hard-soft debate.
The initial debate over nuclear power seemed to end not long after the partial meltdown in 1979 of the reactor at Three Mile Island. Utilities canceled orders and stopped building reactors, partly because of public fears, but perhaps mainly because of rising costs. Mr. Lovins and his allies liked to say that nuclear power, once promoted as “too cheap to meter,” had now become “too expensive to matter.”
The soft path seemed to be the way to go, particularly when some of Mr. Lovins’s predictions about energy conservation came true. As Americans cut back in response to higher prices and new incentives, the growth in electricity demand slowed. Some public officials, most enthusiastically in California, told utilities to stop building large power plants. Instead, they subsidized wind farms and solar power, which were supposed to be cheap and plentiful alternatives once the technologies matured.
Instead, they remained so costly and scarce that Californians’ electricity rates were among the highest in America. They endured rolling blackouts in 2000 while paying astronomical prices for power from nuclear and fossil-fuel plants in other states. The crisis was attributed to price controls and Enron’s market manipulation, but the underlying problem was a shortage of power that forced the state to start building old-fashioned fossil-fuel plants for itself.
Meanwhile, there was a surprise on the hard path, too. Once utilities stopped building reactors, the share of electricity from nuclear power was projected to decline steadily as the oldest reactors were retired. But then several new “merchant energy” companies began assembling fleets of reactors sold off by local utilities. The new owners standardized operations, retrained workers and brought in human-factor engineers to redesign the famously indecipherable control panels.
Under the old owners, the reactors were balky white elephants operating only 60 percent of the time. By improving maintenance and preventing mistakes, the new owners kept them running 90 percent of the time and won permission to upgrade their capacities. So even as the nuclear industry was shrinking in the last two decades as the oldest reactors shut down, the remaining ones were profitably generating an increasing share of the country’s electricity.
Today about 20 percent of electricity in America is generated by nuclear power, which is about 20 times the contribution from solar and wind power. Nuclear power also costs less, according to Gilbert Metcalf, an economist at Tufts University. After estimating the costs and factoring out the hefty tax breaks for different forms of low-carbon energy, he estimates that new nuclear plants could produce electricity more cheaply than windmills, solar power or “clean coal” plants.
The outlook could change, of course, if new nuclear plants turn out to be more expensive than expected, or if engineers make breakthroughs in other technologies. (To debate these possibilities, go to www.nytimes.com/tierneylab.) Given the uncertainties, Dr. Metcalf cautions, it would be risky to bet everything on nuclear power as the answer to global warming.
But it seems even riskier to bet on just the soft path, as so many greens are doing, either by flatly opposing nuclear power or by setting so many conditions that no plants could be built for decades, if ever. (Mr. Obama says nuclear power is necessary but should not be expanded until security and safety issues are addressed.)
“The nuclear debate is still stuck back in the 1980s,” says Mr. Tucker, the author of “Terrestrial Energy,” the new brand he’s trying to affix to nuclear power. If people started associating nuclear plants with natural radioactive processes in the Earth instead of atomic bombs, he says, they might be persuaded that it’s the most environmentally benign form of energy, particularly compared with wind farms that cover scenic ridges and the vast solar arrays proposed for “empty” land in deserts.
Mr. Tucker, a journalist who has been debunking environmental alarms for decades, says he has come around to Al Gore’s view on the danger of global warming, and he’d like environmentalists to rethink their views, too.
“Even when greens give grudging support to nuclear power,” he says, “they add the caveat, ‘But first we have to make sure the plants are absolutely safe’ — as if reactors haven’t been operating safely for 25 years. Nobody recognizes the complete overhaul that has occurred in the industry or how it’s now pumping out twice as much electricity from the same plants with a vastly improved safety record.”
By scaring people about the tiny levels of radiation emitted during the normal operation of a nuclear plant, Mr. Tucker says, greens have effectively encouraged the construction of coal plants that actually release more radiation because of the traces of uranium in coal dust. He argues that the risks of terrorist attacks and nuclear waste have been exaggerated, particularly by the environmentalists who objected when the Yucca Mountain nuclear-waste depository was being designed to guarantee a level of safety for only 10,000 years.
They successfully sued to enforce a safety standard extending one million years — which, in an ideal world, would be a very nice standard. But if you believe global warming is a planetary crisis that must be addressed immediately, should you really be obsessing about hypothetical dangers near one mountain in A.D. 1,000,000? If there’s already a proven technology that doesn’t spew carbon dioxide into the atmosphere, why fiddle while coal burns?