Someone sends in a bizarre story shared by an anonymous blogger. It starts with a political scientist and economist named Michael Munger, who said in 2018:
There’s a famous example in China, where a group of coolies … have to pull a barge up the Yangtze River … There’s a trade-off … how do you make the 30 guys work hard? The insight of the team production problem is we need … division of labor. … If I’m pulling, I can’t spend my time watching you and you can’t spend your time watching me. We’ll create a new job, called the monitor. … We’ll give the monitor a whip. Now this looks like slavery. The great thing about this, and this is from an article by an economist named Steven NS Cheung. He found that this guy with a whip—and this is the most incredible thing Russ!—this guy with a whip was hired and paid by the coolies!
Wow—I’d never heard that story before! Paying to get whipped? Hard to believe, huh?
Where did the story come from? Here’s Cheung in 2018:
In 1970, Toronto’s John McManus was my guest in Seattle. I chatted to him about what happened when I was a refugee in wartime Guangxi. The journey from Liuzhou to Guiping was by river, and there were men on the banks whose job was to drag the boat with ropes. There was also an overseer armed with a whip. According to my mother, the whipper was hired to do just that by the boatmen!
My tale went the rounds, and it was seized by a number of neo-institutional economists. I tried to dissuade McManus, tell him not to publish his piece based on my Guangxi story, but he went ahead nonetheless. (See his “The Cost of Alternative Economic Organizations”, Canadian Journal of Economics1975). In 1976 Jensen and Meckling (1976) published a widely-cited paper in Journal of Financial Economics (“Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure”). As a result of all this, the Guangxi boatmen and their hired whippers gained posthumous fame. However, this could be a story invented by my mother – the smartest person I have ever known – to entertain a boy of seven!
The anonymous blogger quotes economist Ronald Coase in 2006 discussing the general problem of people taking a story and using it to illustrate some social science principle, without checking out the details of the story itself. Here’s Coase:
Facts are not like clay on a potter’s wheel, that can be molded to produce the desired result. They constitute the immutable material that we have to accept. …
What is it about the conduct of economics that led these able and honest economists to embrace error? …
it is the result of economics having become a theory-driven subject. …
If it is believed that their theory tells us how people would behave in different circumstances, it will appear unnecessary to many to make a detailed study of how they did in fact act. This leads to a very casual attitude toward checking the facts. If it is believed that certain contractual arrangements will lead to opportunistic behavior, it is not surprising that economists misinterpret the evidence and find what they expect to find.
The blogger continues:
Instead of taking the time to study and verify the facts, the economist prefers to seize upon any purported facts and shoehorn them to fit her preferred theories and worldviews. “Never let the facts get in the way of a sexy and publishable theory” could be the economist’s motto.
Of course, there exists the possibility that at some time in history, some workers some place did on at least one occasion hire a monitor to whip them. The problem is that we have zero evidence that this ever happened, other than a story a mother told to her seven-year-old son, who then repeats it decades later. A few decades further, the academic urban legend becomes an established fact that can be cited as evidence for one’s preferred theories and worldviews (and ignored otherwise). . . .
It is not OK—indeed it’s intellectually dishonest to cite a story as evidence when you know it might be false.
We need to call BS whenever we see it (and not just when the BS happens to challenge our preferred theories and worldviews).
And the BS is out there! The anonymous blogger writes:
With Clement and McCormick (1989), the story has become the “famous Chinese boatpullers fable”, where “the monitor uses his vision, intuition, and experience to determine shirking, counseling the loafers with his whip.”
Other writers that repeat the story include Ricketts (1990), Miller (1992), Watts (1992), Pejovich (1995), Donleavy (2005), Surdam (2010), and Munger (2019).
The bit about “counseling the loafers with his whip”—that’s really creepy! I guess this is supposed to be one of those “repugnant ideas” that some economists are so proud of, but to me this sort of edgelord remark seems like a symptom of moral rot. Ha ha those loafers are getting whipped, pretty funny, huh?
This reminds me of a story . . .
There was this business school professor, Karl Weick, who went around telling a story about soldiers in the snow in World War 1 . . . Weick lifted the story from a somewhat obscure poem . . . in retelling the story he altered it in a way that allowed him to make the points he wanted to make. I learned about this episode from Thomas Basbøll, and we later wrote two papers on the topic:
To throw away data: Plagiarism as a statistical crime
When do stories work? Evidence and illustration in the social sciences
“Stories” vs. “parables”
In that second article, Basbøll and I distinguished between true stories, on one hand, and parables, on the other. We argued that one of the valuable things about an evidenced story is its immutability—the facts of the story are there, and our theories need to accommodate these facts. This is a key reason why stories are important: they constrain our models of the world; they falsify our simplistic ideas.
In contrast, a “parable” is flexible; it can be altered to serve the teller’s purpose. An evidenced story is a bit of truth, a rock upon which at theory can stumble. A parable is an illustration of a theory. Parables can be useful, as they can help us understand the implications of a theory.
In short: a story backed by evidence is an immutable fact that can be used to refute a theory. A parable is an illustration of a theory and does not bring additional information to the table. Stories and parables are both useful, but they’re different things. It is a mistake to present a parable as if it is an evidence-based story.
Not just economists
The anonymous blogger writes that this is “a common error made by economists” and refers to “We as economists and social scientists . . .”; also there’s the quote by Coase attributing it to “economics having become a theory-driven subject.” Fair enough: economists are out there with this story so they can get the criticism. But really I don’t think this has much to do with economics and economists; it’s more of a general problem of how we learn from stories.
As Basbøll writes, “It’s not just about trusting social scientists. Stories like this circulate in the executive suites of major banks and pharmaceutical companies, sometimes justifying very impactful decisions.” Just as the repugnant story of the whipped laborers has circulated among academic economists and political scientists, Weick’s distorted story of soldiers in the snow has been influential in management science.
How a story gets distorted in the retelling
I did some googling of *coolie yangtze whip* and found an article, “Self-Control at Work,” by Supreet Kaur, Michael Kremer, and Sendhil Mullainathan, published in the Journal of Political Economy in 2015:
. . . in a story by Steven Cheung (1983, 8): “On a boat trip up China’s Yangtze River in the 19th Century, a titled English woman complained to her host of the cruelty to the oarsmen. One burly coolie stood over the rowers with a whip, making sure there were no laggards. Her host explained that the boat was jointly owned by the oarsmen, and that they hired the man responsible for flogging.”
Interesting. Now it happened “in the 19th century.” Perhaps setting it so far in the past makes the story more plausible?
Also the detail about the “titled English woman”—maybe that’s supposed to make us dislike her? Recall that in the original story she was not a titled English woman in the 19th century, she was a Chinese war refugee in the 20th century.
Changing her from a Chinese refugee to a “titled English woman” . . . that’s interesting, actually, as it fits with a common academic-social-scientist ploy to portray skeptics as out-of-touch elitists. You might naively think that laborers getting whipped is a bad thing, but that’s just you being a “titled English woman.” Let the experts explain to you how the real world works, you foolish bleeding heart liberal etc etc. The story would sound different if it were a Chinese refugee with her seven-year-old son.
In the earlier mistelling by McManus (1975), she was described as “an American lady”—I guess “a titled English woman” made a better story. Why not just go all the way and say it was Queen Victoria???
And one other thing . . . Cheung’s the original source, so how exactly did this “titled English women” enter the story in the first place?? Cheung (1983) is easily accessible online, and here’s what it says on page 8:
My own favorite example is riverboat pulling in China before the Communist regime, when a large group of workers marched along the shore towing a good-sized wooden boat. The unique interest of this example is that the collaborators actually agreed to the hiring of a monitor to whip them.
Hey—wait a minute! It seems that Kaur et al. just made up all those details—the Yangtze River, the 19th-century setting, the titled English woman, and of course the “burly” laborer—but then they put it all in quotes as if it had been written by Cheung (1983).
What the hell? This is really weird. Who would make up all these details, write them up, and then put the story in quotation marks like that?
From the first page of the Kaur et al. article: “We thank Lawrence Katz, David Laibson, John Matsusaka, Derek Neal, Ted O’Donoghue, three anonymous referees, and participants at numerous seminars for helpful comments.” Not one of them expressed suspicion about the “burly coolie” story.
And they draw from this story a suspiciously management-friendly bit of advice:
Discipline at the workplace—such as the coolie in Cheung’s story—may reflect demand for arrangements to help avoid the temptation to shirk.
I guess that’s the sort of attitude that will get you a faculty position in economics at some of American’s finest universities. After all, who among us has not hired someone to whip us “to help avoid the temptation to shirk”?
Here’s another, from an article by G. D. Donleavy:
Steven Cheung [23] relates that on the Yangtze River in China, there is a section of fast water over which boats are pulled upstream by a team of coolies prodded by an overseer using a whip. On one such passage an American lady, horrified at the sight of the overseer whipping the men as they strained at their harness, demanded that something be done about the brutality. She was informed by the captain that nothing could be done: ‘Those men own the right to draw boats over this stretch of water and they have hired the overseer and given him his duties.’
I looked up reference [23], and it’s not by Steven Cheung at all; it is an article by John McManus which contains all those fabricated details (the Yangtze, the “section of fast river,” the “coolies,” the “American lady,” and the mansplaining quote at the end).
And then there’s this book by David George Surdam, which tells the story as, “a Westerner was traveling by boat up the Yangtze River in China,” and continues, “The Westerner was horrified by this cruel treatment of the obviously overworked coolies. That is, horrified until it was pointed out . . .”
Ahhhh, those silly Western liberals who don’t understand the real world! Good thing we have economists around to explain reality.
And then there’s this “simpler version of Cheung’s account” told by Munger:
Imagine a group of workers pulling a barge upstream. There is a footpath beside the river, and the coolies struggle to pull the large, heavy cargo boat against the current. Walking alongside the coolies is the boss, a man with a whip. He looks at the calf muscles of the coolies, and if he sees them bunch up with strain, he does nothing. If he sees slack calf muscles, he whips the back of the offender.
“Slack calf muscles” . . . where did that come from??? I’d call this an elaboration, not a simplification! And Munger’s a political scientist—he has no excuse here. Political scientists are supposed to live in the world of reality.
Also, it’s kinda weird how every telling of this story (except for Cheung’s) uses the word “coolies.” Who talks that way? Are they just into being performatively “politically incorrect”? Something like, using some rude slang shows how fearless you are, so we should trust you even more??
“Yangtze” is the tell
Also, one funny detail. The anonymous blogger points out that the “Yangtze River” bit seems to be an embellishment adding in the retelling:
The route from Liuzhou to Guiping does not seem to be anywhere near the Yangtze River. And of course, the Yangtze River just so happens to be the one river someone non-Chinese will have heard of.
This reminds me of how the organizational theorist Karl Weick, when he retold the map-in-the-Alps story without attribution, described it as “an incident that happened during military maneuvers in Switzerland,” even though the original story said nothing about Switzerland and almost certainly would have occurred in a different part of the Alps. Weick, typical American that he was, read “Alps” and just assumed “Switzerland.”
As the anonymous blogger says, nobody seems to care about the details of these stories—but that doesn’t stop people from writing about them as if they’re true, and using them to support their views of the world. I don’t like it when Gladwell does it, and I don’t like it when political scientists and economists do it.
Connection to the Davies principle
Daniel Davies famously wrote, “Good ideas do not need lots of lies told about them in order to gain public acceptance.”
I feel like there’s something similar going on here. Not lies, but some mixture of made-up stories and confused attribution, leading people to draw conclusions based on things that never happened.
Here’s my question: if you use a story to make a point (as Munger puts it, “That’s why I like the barge-hauling example so much”), and it turns out the story is made up—given how striking this laborers-hire-a-man-to-whip-them-story is, if it had ever been a real practice, I’d assume there’d be actual witness reports of it, not just someone remembering a story that his mother told him as a child—, then, does this cast doubt on the point you’re trying to make? Maybe it should!
“Discipline at the workplace may reflect demand for arrangements to help avoid the temptation to shirk.” Yeah, right. Funny—you never see the writers of these articles hiring “burly” guys to whip them. Why not, if it’s such a great idea??
Summary
Of all the parts of this story, what stuns me the most is the 2015 article by Kaur, Kremer, and Mullainathan, where they wrote:
The second view—that joint production necessitates the need for monitoring (Alchian and Demsetz 1972)—is summarized in a story by Steven Cheung (1983, 8): “On a boat trip up China’s Yangtze River in the 19th Century, a titled English woman complained to her host of the cruelty to the oarsmen. One burly coolie stood over the rowers with a whip, making sure there were no laggards. Her host explained that the boat was jointly owned by the oarsmen, and that they hired the man responsible for flogging.”
Looks like a direct quote, no? But go to Cheung (1983), and all you find is:
As examples of the gain from collaboration and the difficulty of delineating contributions, Alchian and Demsetz13 cite the examples of loading and of fishing. My own favorite example is riverboat pulling in China before the Communist regime, when a large group of workers marched along the shore towing a good-sized wooden boat. The unique interest of this example is that the collaborators actually agreed to the hiring of a monitor to whip them.
Kaur, Kremer, and Mullainathan made up all those details—and then they put it all in quotes! This is the opposite of plagiarism, I guess, to make up a story and then attribute it to a trusted source.
I ca see how you could get the details of a story garbled, or remember a story without recalling exactly where you heard it, or believe a tale without checking the evidence—but how exactly do you make up all these details and then put them in quotes, without checking the source? How does that happen?? I’m frankly baffled. I guess maybe the quotes were added by the copy editor? Still, the authors cited the exact page of Cheung (1983) where the story appeared, so you’d think they would’ve noticed that there was no Yangtze River, no 19th Century, no titled English woman, and no “burly coolie.”
And, hey, I just noticed one more thing! The story is that they were towing the boat, so there were no “oarsmen” either!
This has got to be the world record for the most extraordinary collection of errors that has ever been gathered in a single paragraph of an academic publication—with the possible exception of when Richard Tol dined alone.
Oh well, it’s just the Journal of Political Economy, nothing serious.
P.S. As noted above, it seemed strange to me that these academics kept using what seemed to be an old-fashioned and offensive term to refer to Chinese laborers. I found some definitions:
Britannica.com : “(from Hindi Kuli, an aboriginal tribal name, or from Tamil kuli, “wages”), in usually pejorative European usage, an unskilled labourer or porter usually in or from the Far East hired for low or subsistence wages.”
Dictionary.com: “noun Disparaging and Offensive.
an unskilled laborer, especially formerly in China and India.”
Merriam-Webster: “usually offensive
: an unskilled laborer or porter usually in or from the Far East hired for low or subsistence wages.”
Wikipedia: “a term for a low-wage labourer, typically of South Asian or East Asian descent. . . . The word has had a variety of other implications and is sometimes regarded as offensive or a pejorative, depending upon the historical and geographical context . . . The word originated in the 17th century Indian subcontinent and meant day labourer, but since the 20th century the word has been used in that region to refer to porters at railway stations. . . . now regarded as derogatory and/or a racial slur in the Americas (more so Caribbean), Oceania, and Africa / Southeast Asia – in reference to other people from Asia. . . . In modern Indian popular culture, coolies have often been portrayed as working-class heroes or anti-heroes. Indian films celebrating coolies include Deewaar (1975), Coolie (1983), Coolie No. 1 (1991), Coolie No. 1 (1995), and Coolie No. 1 (2020).”
So, yeah, I guess my instinct was in line with common usage, and it does seem obnoxious for those political scientists and economists to keep using the term. Not the biggest deal, but it seems related the larger problem that they’re just making stuff up about people they know nothing about, “slack calf muscles” and all that, and then bringing in the “titled English woman” as a foil. Using that rude and old-fashioned term for laborers is a kind of literary device that puts the story in the past, Gunga Din-style.
The usual contrarian ploy is to take some apparently horrible practice that normal people would disapprove of, and then demonstrate through logical reasoning that it is actually a good thing. In this case, though, these clever academics went to the trouble of making up what may well be a nonexistent practice, and continued by inventing a completely fictional character to personify society’s disapproval of this practice, as this provided a sharp contrast to their own hard-edged rationality.
My mother old me a story about a group of political economists, hired to tell flattering tales to the rich and powerful. But the temptation for individuals to break ranks and acquire fame by telling the truth was too strong. So they pooled their wealth and hired a tooth fairy who would only give rewards to those who towed the party line. Also a man with a whip to handle those who didn’t tow with enough strain.
Wins thread.
not to be that guy, but it’s “toed” the party line
How was that not being that guy?
Hahahaha yes indeed!
Okay this content is approaching Scott-Adams-conspiracy-level quality! I think you have found the opposite of plagiarism and it’s just as bad? One could almost defend the story if used as a thought experiment (one that would be unconvincing in the extreme) rather than a statement of historical fact, but then why the language? Moar Yangtze River workers!
To show you that a non-economist checks things carefully, note that Andrew wrote
“I ca see how you could get the details of a story garbled, or remember a story without recalling exactly where you heard it, or believe a tale without checking the evidence—but how exactly do you make up all these details and then put them in quotes, without checking the source? ”
Without the “n” following “ca”, it appears that there has been an intentional fallback to dialect in order to harden the reasoning, improve the connective tissues.
Chinese whispers, eh?
Why do these things happen? Take the article you provide a link to:
“Self-Control at Work,” by Supreet Kaur, Michael Kremer, and Sendhil Mullainathan, published in the Journal of Political Economy in 2015″
Not only is this one of the top economics journals, but the authors are at Ivy League universities and NBER (2 at Harvard, one at Columbia (!) and all at NBER). Their reputations appear to not suffer – in fact, this remains a top publication enabling tenure, promotion, grants, accolades, etc. With so much upside potential and few downside risks, it is not surprising to find such stories.
I like the Coase quote but Coase himself was not an empiricist. His most famous paper, “The Problem of Social Cost,” is based on what-if stories; not fabricated, but not derived from real world observation either. (Note: I am going to check this claim to make sure I am not mis-remembering.) It was a serious failing of that paper.
From Debt: the First 5000 Years, a book of anthropology by anthropologist David Graeber, chapter 2 — The Myth of Barter
I do think has something to do with economics. There is a culture there that values cleverness over correctness–the object of study is merely a method by which one can demonstrate their skill in studying it.
“For centuries now, explorers have been trying to find this fabled land of barter–none with success.”
This is blatantly false.
European and American explorers that crossed North America and sailed its west coast in the late eighteenth century all operated on a barter system with native Americans. Native Americans had no money, yet trade goods crossed the continent from east to west and north to south. Maybe this was just gifting? Snort. This is common knowledge.
I foolishly bought this book thinking it might be interesting. Instead – at least as far as the first few pages go – its just conjured up BS. I threw it away rather than donate it to Goodwill because I didn’t want to spread misinformation.
Attitudes like yours are exactly the problem under discussion. You are rejecting actual empirical evidence and investigation because it contradicts “common knowledge”, under the presumption that if knowledge is common enough and seems to make enough sense it must be true.
To indulge your childish objection, the argument is not that people never bartered–rather, it is the nonexistence of a “barter economy”. That is, an economy where the primary mode of exchange between people is barter. You exact objection, because it’s a predictable result of common misconceptions, is actually anticipated verbatim in the book.
I beg you, once again, please learn to actually read. Not scan. R E A D, all the words on the paper. Your general impression from cultural osmosis is not better than than other people’s specific studying. You and Adam Smith did not learn as much about global cultures from meditations in the dark as anthropologists did by living with the Tiv people in rural Nigeria and studying ancient papyrus.
I think suggesting people read a 534 page book they do not like to reply to a comment on the internet is a rather big ask. It would be more polite to provide more full information of the point you want to make. Is Graeber’s point that in non-monetary societies, informal systems of trust is a more common basis of pre-economics than barter, per se?
That’s probably true but hard to quantify. I mean even today a lot of my participation (which can be viewed as economic) is non-monetary. Making this reply comment, for instance.
I mean, if one tries to make a full inventory of one’s “exchanges”, one might well find that in the modern day, the majority of exchange is not barter or monetary either. Children do not pay parents for their meals. Most websites are free and function under the vague expectation that you buy something eventually. Then there’s all the services your governments provide, my enjoyment of other people’s gardens as I go on walks, etc etc. Would that imply I do not live in capitalism?
Nobody is required to read any book. But he claims to have already bought the book, and dismissively threw it out because of an objection that’s explicitly anticipated and thoroughly addressed, like, 2 pages after the disputed claim. That’s just wasting your own money. Then going online and trashing it, that’s just wasting everyone’s time.
If you pool the product of your labor with your village, to be allocated by the matriarchs on the basis of need, but trade with another village 3 times a year, do you live in a barter economy? If so, then sure, according to you, there were barter economies—but according to me there weren’t, that’s just semantics. The substantive point is this; the story where cobblers traded shoes for bread, chickens, eggs, shirts, and pants, which evolved into the use of a numeraire good to ease the frictions, after which bankers started to specialize in accounting and lending the numeraire, has no empirical evidence anywhere.
The irony is that Graeber is at least partly doing what he accuses economists of doing: fabricating a story to make a point. He is partly right, in that introductory textbooks tell a barter origins story, but of course there are a lot of made up stories in intro textbooks. Serious histories of money, however, have pointed out the origins in credit for decades. I wasn’t a monetary economist, but I did consult these works from time to time. Jeez, the fact that much of the early writing that has come down to us was about keeping track of who owed what to whom is not exactly hidden knowledge.
I never liked the way that economists treated barter. Virtually all (let me know if you know of any exceptions) simply present money as a superior system to barter – there are clear benefits. Since “there is no such thing as a free lunch” is a central tenet of economics, I always felt compelled to point out that barter had some benefits that are lost in a money economy. Yes, transactions costs are higher, but so are transactions benefits. There is something to be said for knowing who you are trading with. Yet, economists present barter as if it had no redeeming features. Another reason I gave up teaching economics (and gave up teaching macroeconomics even earlier).
To my knowledge, the most extensive treatment of barter by economists is in the literature on countertrade. (This refers to barter in an international context, generally between countries constrained by limited hard currency reserves.)
My personal experience is that most economists do buy into the barter origin story, and it has certainly percolated into the wider culture. So I wouldn’t consider it fabricated—just polemical.
In my experience, the only people who reliably buy into a credit history of money have been those who identify themselves as “economic historians” rather than economists—more Barry Eichengreens than, say, Greg Mankiws. In the book, Graeber also doesn’t present this insight as original to himself either, and takes care to cite earlier works by name.
I wouldn’t say that in my experience monetary economists are the type to engage historically. Papers are being published in monetary economics journals to answer the question of “why does anyone hold money” with “search theory of money” or “money in utility” models.
I think we agree, more or less. Most economists haven’t looked into the history of money and credit, and they probably buy the textbook story. But to my knowledge, serious work in economic history understands the primacy of credit. I get the impression that Graeber liked to present himself as a renegade, but it would have been fairer for him to say he was reinforcing the mainstream of economic research on this topic.
Incidentally, the shortest version I know of why it’s good to have money is that it economizes on trust: instead of having to trust each person you transact with, you just have to trust their money. Obviously a lot of transactions go beyond monetary exchange, but many of them don’t.
Peter
I find it ironic that the evolution of our money economy (as opposed to barter) has now become a system where we can trust nobody at all. Hence the “need” for cryptocurrencies.
About 5 years ago, Brad Delong, on his blog grasping reality, had a whole series of posts, Debt, the 1st 5,000 mistakes
and the upshot is that while Graebar may be right about some things, his book is so full of howlers that one should be very very suspicious of anything he says
which is sort of ironic given the blog post topic
Interesting case. The embellished details (19th century, titled women, burly coolie) reminds me of a version of the Alps story…
https://secondlanguage.blogspot.com/2014/01/true-stories.html
is this the one about what happens when you meet a stranger in the Alps?
Do you see what happens when you find a stranger in the Alps Larry?
There are cases where people have decided it makes sense to hire others to boss them around; people pay teachers and personal trainers for that sort of thing, and if they are actually putting a priority on making progress in their skills, they will sometimes deliberatelly seek out someone who will be strict. But probably not someone who will whip them, unless perhaps it’s a fetish thing rather than an educational project. I suppose that makes this sort of thing especially unfortunate; the circumstances under which people will choose to let others have authority over them, and even seek out others to perform those roles, do exist, but it’s an interesting empirical question exactly what circumstances motivate that and what kinds of arrangements they are or are not willing to make along those lines. Making up a story that doesn’t match any of the actual examples misleads us as to the real nature and boundaries of the phenomenon.
This is a great point. Sure, the story is false, and sure, there are no examples of people hiring people to whip them for slacking, but the economic phenomenon (hiring someone to constrain your behavior) is real and, in your examples, obvious. People pay to do Tough Mudder competitions as well. But *current* examples sound too timebound, so the authors wanted a timeless example. And JPE *loves* ancient examples. They used to put one on the back of every issue. (Do they still? Haven’t read it in years.)
(1) Two of the three JPE authors are *very* big names in economics, well known to pretty much everyone in the discipline. (2) The attractiveness of the “coolie” story is that it addresses directly a major potential source of embarrassment — that a large portion of the workforce in the US and many other countries is visibly oppressed at work. People are issued orders, punished if they are seen to be less than completely obedient, and made to accept working conditions that harm and demean them. This becomes newsworthy when a union organizing drive occurs or if it’s in the context of a major public health crisis (like covid and the meatpackers), but it’s there to be seen whenever you want to look. The “coolie” story tells us not to worry, that workers *want* it to be like this. It would take a lot to discredit a story that’s this convenient. (3) I agree with everything Andrew says about the use of parables vs actual events, although the distinction is fuzzed by the great diversity of the latter and the possibility of cherry picking them.
Peter:
Yes on your last point, but, it’s funny: real events have this annoying “realness” to them! The world is so big that you’d think the authors of this article could’ve come up with a true story to make their point, rather than making something up . . . but they didn’t! I think this is an indication that there are limits to cherry picking. I’m reminded of the papers of Brian Wansink: given his admitted willingness—eagerness, even!—to p-hack, it’s telling that he also made up data and perhaps entire experiments. Cherry picking can be harder than it seems.
Regarding the famous economists and the fake story: What do you think happened with that article? It’s kind of stunning how little quality control went on there, given the ridiculously elaborate revision processes of econ journals.
And, yes, I agree with you on the political angle. I guess the authors of this particular article are Democrats and it’s not straight-up partisanship, more of a general ideology: the fact that lots of the workforce are bossed around is awkward for their theories.
Why the review process at JPE didn’t pick up a rather transparent pseudo-anecdote: (1) The prominence of the authors. (And review is seldom blind in that direction; I can usually identify the authors of articles I’ve been asked to review. It’s sort of a game!) (2) The anecdote is incidental to the “hard” content of the article. Maybe objecting to it would have been seen as nitpicking. Reviewer capital, so to speak, would be husbanded for the most salient issues. Or maybe the reviewers wanted to limit the time they needed to spend, so focusing on core theory and econometrics would be the way to go. (3) The reviewers found the story as appealing as the authors.
As I mentioned above (or will when the comment passes moderation for whatever reason) don’t forget that JPE loves examples of current economic phenomena from premodern times. They used to put one on the back of every issue. (Not sure if they still do.) That alone makes it too good to check.
I only have one thing to add about the ‘coolies’ being whipped, beyond the fact that I, too, was struck by the use of the word ‘coolies’ in so many of the stories: I think you do Munger a (very) slight disservice. He didn’t say the ‘monitor’ was whipping workers with slack calf muscles. He said _imagine_ this scenario. It does appear that he bought into the basic story, but one he says the word ‘imagine’ he is free to add colorful details to make the scene more vivid or plausible without being guilty of trying to mislead people about the facts. By taking an explicitly imaginary scene and implying that it was stated as fact you are performing the same kind of sin you’re criticizing in the post! Someone could read your post and claim that Munger made up a ‘fact’ about how the monitor identified shirkers and inserted it in the story as if it were true, but that wouldn’t be right.
And I think that’s instructive: it’s easy to turn parables into supposedly-true stories, all it takes is a little inattention. If your narrator signals that a story isn’t true or may not be true, but you don’t pick up on the signal, then you can think you’re being told a true story, and you repeat it as such. Once one person repeats a story as fact, whether intentionally or unintentionally, no further fabrication is needed, everyone else can just accept it as true. Famous examples abound. Charles Napier did not send a dispatch saying “Peccavi”; there’s essentially no evidence that Galileo said “eppur si muove”; ditto for the most commonly cited origin of the term “posh”, but you can find sources that an ordinary person would believe to be reliable that tell all of these stories as if they’re true. And many more.
That’s all I have to say about the story about the whipping, but this post has prompted many other thoughts that go off in all directions, and I’ll include a few of them here.
* This is a great post! It reminds me of Errol Morris’s dissection of the staged Crimean war photo.
* You ask “Here’s my question: if you use a story to make a point (as Munger puts it, “That’s why I like the barge-hauling example so much”), and it turns out the story is made up—given how striking this laborers-hire-a-man-to-whip-them-story is, if it had ever been a real practice, I’d assume there’d be actual witness reports of it, not just someone remembering a story that his mother told him as a child—, then, does this cast doubt on the point you’re trying to make? Maybe it should!”
I’ve thought about this many times. The first time I recall pondering it in depth was when I heard about Ray Comfort’s “banana is an atheist’s nightmare” argument: if the fact that bananas as we known them existed in nature is strong evidence for a benevolent god who designs the world on our behalf, then doesn’t the fact that bananas as we know them did _not_ exist in nature provide evidence against a benevolent god who designs the world on our behalf? Should we not agree, at least, that p(god | banana in nature) > p(god | no banana in nature)? (Just for laffs, here is something I wrote a long time ago about human ‘invention’ of the banana. Important note: this story is fictional! But I told it as if it’s true!)
* Like many people, I share your belief that the distinction between parables and true stories is important. Critical, even. People say ‘the plural of “anecdote” is not “data”‘, but in fact each true anecdote gives us a data point (or sometimes more than one), whereas a made-up story contributes no data at all, it’s more like presenting the predictions from your model. Don’t confuse the data with the forecast, that seems pretty fundamental.
But the feeling that one should always distinguish fact from fiction is not universal. There was a quote that went viral several years ago, I saw it presented this way: “When Winston Churchill was asked to cut arts funding in favour of the war effort, he replied ‘then what are we fighting for?'”
I thought it was laughably obvious that this was false. Churchill would have burned the contents of the British Museum and danced naked around the bonfire if he thought it would help stop the Nazis. (Apologies for the image). A friend posted the quote on his Facebook page and I pointed out that it couldn’t possibly be right…indeed Snopes or someone had already debunked it. But it turned out Churchill had indeed declined to ship museum artwork to safe storage, because he thought that would be bad for morale. My friend told me he was going to leave the fake quote on his Facebook page because “what actually happened was close enough”!
* My friend’s reaction is not unique. Many people will tell a close-enough falsehood rather than the truth and claim that the difference is unimportant, even when (as in the case above) it’s actually quite large.
To give a famous example, Al Gore said “During my service in the United States Congress, I took the initiative in creating the Internet. I took the initiative in moving forward a whole range of initiatives that have proven to be important to our country’s economic growth and environmental protection, improvements in our educational system.” The first of those two sentences came to be characterized as “Al Gore claims to have invented the Internet.” And indeed, the distinction between “creating the Internet” and “inventing the Internet” seems to be fairly minor. And one could certainly argue that Gore did not ‘create’ the Internet either. Still, you never heard people saying “Al Gore claims to have created the Internet”, they always used the word “invented.” Maybe they realized “created” sounds less ridiculous.
If someone says “The person said X, but I’m going to claim they said Y and the difference doesn’t matter”, the response should be “if the difference doesn’t matter then you should claim they said X because that is what they said. And if the difference does matter then shame on you for distorting what they said.”
Phil:
Yes, it seemed to me that Munger was aware that he was spinning a tale. I just thought it was funny that he referred to his version as a “simpler version” rather than an elaboration. In some ways he seems to be clear that it’s a parable, not a true story; in other ways he seems to think it’s actually true. For example, in the quote at the very beginning of this post, he interjects, “this is the most incredible thing”—that’s the kind of thing you’d only say if the story is true. If you’re aware that the story is likely to be made up, you’d say “not credible” or “Here’s why I don’t trust this story . . .”
It’s an interesting thing, actually. Consider a story with an unusual or unlikely element, or something that’s “too good to be true”:
– Conditional on the story being known to be true, you’d say, “this is the most incredible thing” or “truth is stranger than fiction” or something like that.
– Conditional on the story being known to be made up, you’d say something like, “this is implausible” or “this doesn’t really work in the context of the story.”
– Conditional on the story’s truth status being known, you’d say something like, “this makes the story less plausible to me.”
“this is literally incredible”
And I mean literally literally incredible.
“And one could certainly argue that Gore did not ‘create’ the Internet either”
You _could_ argue that, but you’d be wrong. It was Gore’s _legislation_ that created the _public_ internet. Sure, he wasn’t the only one who worked on that legislation, but the “information superhighway” metaphor was a takeoff on his father’s legislation that created the interstate highway system.
Ha, David, now you’re doing it! I was just complaining about people making fun of Gore for something he didn’t actually say, and you’re flipping it around and defending him by rephrasing his claim to make it true!
In other contexts I’ve seen Gore quoted as saying something like “I wrote the legislation that led to the creation of the Internet”, and that’s a true claim. To turn that into “I created the Internet” is hyperbole but I personally judge it to be acceptable puffery.
But whether praising him or mocking him, I don’t think we should be altering his quotes.
You’re right there, but Al Gore’s pet VP project led to the internet we know today. Dan Quayle’s pet VP project, building a business selling satellite remote sensing data, actually delayed the use of such data by raising the prices by over an order of magnitude. There’s an economic parable to be told right there.
Kaleberg:
We can all thank Dan Quayle for doing his part to stop an attempted coup d’etat last year.
“I don’t think we should be altering his quotes.”
I certainly didn’t alter any of Gore’s quotes. Those are all my words, and they state actual reality correctly. (As is widely recognized in the Comp. Sci. community.) Maybe someone else would have come up and done it if Gore et. al. hadn’t, but that’s an alternative reality. In real life, it really was Al Gore (et. al., of course) who got the job done. And, again, his claims are, within a very acceptable range of bragging, a true statement of the history of the internet. Without that legislation, you wouldn’t be here thinking he didn’t create it.
Whoops, I did it myself! Even when he resorted to puffery he didn’t say “I created the internet”, he said “I took the initiative in creating the internet.”
I know nothing about bananas and atheist nightmares but it is known exactly how many banana trees there are in this world (zero!) and where the (surprising) center of banana research is (Leuven, Belguim!). And, banana experts are very worried that the “Cavendish” banana, virtually the only one sold in the U.S., may be wiped out by the Panama Disease. And, for good measure, it is widely conjectured that Eve wore a banana leaf rather than a fig leaf.
The standards and practices of academic journals and the standards and practices of expert witness testimony are very, very different. It is *not* unusual for an academic to take a citation to article X in article Y and cite it himself as if it makes the point without having read it. The downside for doing so and being caught is… nothing. As an expert witness, you learn very early on that your opponents will actually read every citation you make, and use the most trivial errors to try and pull your entire testimony into question even where the mistake has little impact. That’s not the way academia works, except here…. Bravo, Andrew, (and doubleplusgood bravo to the anonymous blogger who started you down this path) for doing the work that lazy people have not been doing since at least 1975.
Jonathan:
OK, then here’s my best guess of what happened with that Kaur, Kremer, and Mullainathan paper:
1. The story of the whipped laborers (I refuse to continue to use the offensive ethnically-tinged synonym) is well known among economists. The authors were writing a paper where they could use the story, so they decided to do so.
2. They didn’t remember the details of the story—which makes sense, given that it likely never happened, so there are no details—so they reconstructed it from memory. Because, who cares, it’s just a folktale that they’re using to make a point in a lively fashion.
3. Somewhere in putting the paper together, they decided the story should be referenced. They did some googling and found Cheung (1983), or maybe they were already aware of that paper, so they dug it up and found that the story was on page 8 of the paper. Hence, the reference.
4. They didn’t ever look carefully at the story so they didn’t catch that they’d made up all the details. Perhaps they figured that the full story existed out there somewhere (with the titled English woman, the burly whipper, and all the rest). Their introduction of “oarsmen” makes it clear that they never thought about the story in any detail.
5. So far, so typical. People are always putting in references without actually reading the article they’re pointing to. This example just happens to look particularly bad because they went to the trouble of citing the page number—and they still didn’t read the article. It was just one page!
6. But the mystery remains: where did the quotation marks come from? How could you possibly put a story in quotation marks when you’re reconstructing it from memory and you didn’t actually type it in from the source? At first I conjectured that the quotation marks were added by an overzealous copy editor during the publication process, but then I found this preprint version, and it has the quotes too (see pages 44-45)! So now I’m thinking that one of the authors put in the story from memory, gave the Cheung (1983) reference, and then had the impression that you’re supposed to use quotation marks to avoid plagiarism? I don’t know, that’s the best story I can come up with that’s consistent with the data.
Andrew-
Here is what I think happened.
The papers in self-control come up with the common finding that since it is harder to resist last-minute temptations, people need to find “commitment devices” to save their future idiot selves (By the way, they are very rational when planning). It is such a cool story- everyone loves it, including MBAs whom I teach. However, the evidence for this is hard beyond “exploding piggy banks” and “CDs with early withdrawal penalities”. One story that often comes up is Odysseus tying himself to the mast and waxing sailors’ ears (I refuse to use the word Coolie) to save himself from sirens. Many many economists have cited this- including this https://academic.oup.com/qje/article-abstract/121/2/635/1884028 and this https://www.nature.com/articles/415269a.
I guess the authors did not want the same story- it was getting old and tired, and stumbled upon this gem. Just like the tempted individuals in their papers, they simply gave in to the temptation and ensuing liberty with the quotations..
One of the authors in the paper, by the way, is often talked about as a future Nobel Laureate…in the distinguished pedigree of the inventor of Nudging, Thaler.
Anon:
Sure, but that doesn’t explain the quotation marks! Or, are you saying they deliberately added the quotation marks to portray their story as an actual quote from Cheung (1983)? I find that hard to believe: it’s just too easy to check, and they don’t really gain anything from it. I still think the quotation marks must be some kind of mistake; I just can’t quite imagine what made them do it.
This may have already been stated — I haven’t read through all the comments — but my guess is that others prior to 2015 lazily / mistakenly / incompetently made up the quoted text and ascribed it to Cheung 1983. For example, here’s a 2012 “quote,” see page 97 of: https://dash.harvard.edu/bitstream/handle/1/9284829/Anand_gsas.harvard_0084L_10485.pdf?sequence=3&isAllowed=y
(Quickly looking that’s the earliest I found.) It’s a dissertation, the author of which was a student of Mullainathan, the 2015 author.
Instead of doing the proper thing of actually looking at Cheung 1983, the 2015 authors took the lazy route of looking at the above reference to Cheung 1983, and assuming its quotation was correct, and continuing to treat it as a quote.
That’s my guess of the origin of the “quote.”
Raghu:
The author of that 2012 Ph.D. dissertation that you link to is the same Supreet Kaur who is the first author of the 2015 paper by Kaur et al. that we’ve been discussing.
So I guess this just pushes the question back one step: Why did Kaur put the story in quotes, given that it’s not actually a quotation from the cited Cheung (1983) paper (indeed it includes lots of details that seem to be mentioned nowhere else)?
I guess that when the 2015 paper was written, the other two authors just trusted that the quote was real. That happens with coauthored work; we usually have to take a lot on trust.
Good catch, Andrew. I read “Anand, Supreet” as the author (citation, page 1 of the PDF) and didn’t think further about connecting names; yes, it is the same author.
I agree that this pushes the question back one step (to 2012).
It’s such a specific quote that I also wonder if it’s an exact quote from something else that the author mixed up with Cheung 1983 in attributing it. Googling doesn’t return anything, but that doesn’t mean much.
Just to clarify – the reference in the 2012 dissertation is in fact in an early version of the same paper that was eventually published in the JPE. (This is the norm in economics: our dissertations are just three papers stapled together, and often some of those papers are coauthored with other people.) Consistent with that, the chapter containing the quote is titled “Self-Control at Work (with Michael Kremer and Sendhil Mullainathan)”.
So the earliest source of the quote we have found so far is still the same paper, and nothing here clarifies which of the three authors put in the quotation marks around the fake quote.
Perhaps not surprisingly, the mentioned economist Cheung and his new institutional economics friends have developed coherent methodology that “does not rely on advanced mathematical techniques” and “focuses on economic explanation that is based on real world observation (an observation first approach)”, quote to wikipedia. This tendency made this Yangtze coolie story even worse because it could have served as a fundamental building block for many established “new institutional economics” theories.
Just in terms of pedagogy: when I tell this joke in class, it’s the economist who suggests taxing the workers to pay for the overseers and whips.
A story told to a seven-year-old is admittedly very weak evidence, but it is evidence.
Though I have no idea whether the story is actually true, it sounds more plausible to me than it does to a lot of commenters here. To learn more, you’d have to ask questions of people deeply familiar with social conditions in pre-Communist China. Since I’m not one of those people, there’s not much I can say about that.
But what if the story is true? What moral does it support? It would only make sense as the behavior of desperate workers trying to survive on near-starvation wages. I can certainly imagine a group of barge-haulers convinced there are some among them who fail to pull their weight. I can imagine they might not want to expel the slackers, because then the total manpower would drop too low. And so…hiring a whip-wielding overseer could possibly make a sort of sense.
One moral might be that cooperation will emerge only when there’s some mechanism to test whether people are in fact cooperating, and that such a mechanism is worth paying for. As far as it goes, that’s a moral I can get behind. Cooperation in this case would be beneficial because all the barge-pullers are better off if they’re all pulling their weight, but that sort of cooperation might be difficult to ensure. Hence, in this case, the whip.
Another moral might be that whenever people labor under bad conditions, it must be what they themselves really want. If anyone actually draws that “moral,” there’s probably not much I can say to them.
Hopefully, it’s obvious we should find methods of encouraging cooperation better than whips. Hopefully, it’s obvious we should find methods better than firing people when their health insurance or housing depend on their job. We shouldn’t take the behavior of desperate people with very few choices as any sort of universal model. If they did “want” an overseer with a whip, it was only because the available alternatives were even worse. (And even though I’m hardly an expert on the subject, I do know that the World War Two years were horrific for a lot of people in China. Good choices were in very short supply at the time.)
One last thought: Have any of the economists who used this story drawn an analogy between the “whip” and union dues?
Great article. On the point about whether a false story should make you question the point it is supposed to illustrate, yes, absolutely – but you have to be careful. Someone making up a story is likely to try to make it as good as possible, and I think you should expect that perfect stories are more likely to be untrue than messier, less clear cut ones which follow the same general outline. I met a man called Aesop who told me he’d seen a fox, a bear and a donkey doing something extraordinary that illustrates this point very well, though the details escape me right now.
I have heard rumors about how little reviewers carefully check mathematical proofs in econ papers… In fact, I’ve never once gotten a reviewer comment about a proof in any of my papers. So I’m not at all surprised to hear that nobody checked the veracity of a (possibly made-up) motivational anecdote. Of course, this is a problem…
Prof Gelman, this post reminded me of this classic paper (Murray 1971) that discusses how to come up with interesting theories in the social sciences:
“A theorist is considered great, not because his theories are true, but because they are interesting.”
https://journals.sagepub.com/doi/10.1177/004839317100100211
I’d wager, this focus on interesting over verifiable truth is the source of many problems in different social science fields.
Chetan:
I’m still wondering where the damn quotation marks came from. That’s still buggin me.
Its a direct quote from the introduction of Murray (1971).
No, I’m talking about the quotation marks in the paper by Kaur, Kremer, and Mullainathan.
It could be a sensible idea to hire an overseer, but I’m not sure that giving him a whip makes sense. It’s not that people won’t hire others to hurt them in order to make them better at their jobs. Professional athletes hire trainers who put them through the most appalling agony. But even the most sadistic old-school rowing coach wouldn’t use a whip. It just isn’t a very good way to get the best results from motivated physical labourers – and in this case, we know they’re motivated because they’re prepared to pool their earnings to pay for a whip-hand in order to get better at their job.
This is a story that only seems to make sense when it’s about an alien, perhaps even subhuman group. It would fall apart if we thought of these workers as being like us. Interesting that it was told to Mr Cheung by his Chinese mother, though of course the story he remembered is unlikely to have been the one she told.
Never occurred to me anyone would believe it was a TRUE story. It’s clearly a parable, at most.
But you are quite to point out this should have been made clear.
Michael:
I’ve found that intonation is very difficult to convey in typed speech. In conversation we can tell stories and give just the right spin (at least, to familiar audiences); it gets harder in emails/blog/twitter, and even more tricky in formal publications. This can be frustrating sometimes to me too!
I listen to econtalk religiously, and got the impression that it was true when Mike told it there, so it can be hard even with voices
https://www.econtalk.org/munger-on-the-nature-of-the-firm/#audio-highlights
@53:00 … judge for yourselves…
wait a second: @ 58:40
Interviewer: “It’s a true story, right?”
Munger: “Well, Steven claimed that it was, and I’m confident that it was.”
https://www.econtalk.org/munger-on-the-nature-of-the-firm/#audio-highlights
Gonna have to take the L on this one, Mike.
Ladies and gentlemen… we got em!
a late comment on an obscure blog…surely THIS will be the blow that finally chastens academic economists…no but seriously, i’m glad *someone* acknowledged it–though i wish it was munger who did so…
Dl:
I clicked on the link and went to 58:40, and I think you’re right but I’m not 100% sure. Here’s how it goes:
There’s just one thing. That bit where he says, “I’m confident that it was—uh”: it could be “I’m confident that it wasn’t.” There’s no way for me to tell from the audio.
That said, I think you’re right, as “I’m confident that it wasn’t” would not fit in with what Munger says right before and right after.
My guess that at the time of the interview, Munger thought the story was true, but then later he reflected upon the matter and reassessed the story as a parable. Perhaps he forgets that he ever insisted the story was true.
*Is* it a parable? Setting aside the question of whether it’s presented as a fact; suppose you started out, “Here’s a parable for you….” First, the word Andrew should’ve used was fable, not parable. Second, a fable is defined by its simplicity, its color/evocativeness, and its transferring of a complex issue to a much-simplified setting. This is not a simple story, if anything it’s got so many extra details (coolies, overseers, a specific river, a cultural context far removed from our own and arguably stereotypical) as to be distracting. It’s certainly colorful, I’ll give you that, but it gains engagement at the cost of the elegant simplicity of, say, “The fox told himself the grapes were sour to comfort himself for not getting any.”
The lesson here is both complex and questionable: Even people with a stake in outcomes are inherently untrustworthy. Or maybe: Workers complain about punitive oversight regimes, but if they were capable of seeing the big picture, they’d understand such regimes are in everyone’s interest. Or, given the very specific setting: Even working-class foreigners, when given a stake in their collective performance, are smart enough to know that working-class foreigners are inherently lazy. You might say that’s overinterpreting the details, but the whole point of having animals as characters in parables is to remove those kinds of distractions. This story doubles down on them!
Re: laborers hauling boats up the Yangtze and hiring monitor to whip them along.
It always helps to seek firsthand data.
We did a boat trip up the Yangtze from Wuhan to Chungqing shortly befrore Three Gorges Dam was completed (2003).
Many sections of the river go through near-vertical cliffs, in which are cut narrow slots, just wide enough for someone to walk and tall enough if they’re really bent over. These were where the “trackers” pulled boats up the river. We were told that a man would spend his life chiseling a slot, then his son would take over. There is no room for a guy with a whip, although apparently they did get whipped sometimes (but hardly paid for it).
https://factsanddetails.com/china/cat15/sub99/item460.html#chapter-4
Here’s are photos of trackers in easier areas, not the vertical cliffs:
https://www.art.com/products/p13870903-sa-i2770009/dmitri-kessel-2-rows-of-chinese-trackers-plodding-along-bank-of-yangtze-river-towing-a-junk-slowly-up-river.htm
https://commons.wikimedia.org/wiki/File:DCGraham_Yangtze_Trackers_Pulling_Houseboat.jpg
Of course, these slots are now under water, given the Three Gorges.
Ten years ago my wife and I biked down the Danube from Passau (Germany) to Budapest. It’s a very well-used bike route. For a lot of the time you’re on a bike path in the flood plain, or sometimes along the top of a levee. Indeed, the levees provide just about the only hills, otherwise you’re descending at a steady 0.4 meters per kilometer for just about the whole way. I recommend this ride to anyone. Indeed, we went back the next year with my parents (then in their seventies) and biked portion of the ride…from Linz to Vienna for those of you keeping score at home.
For a thousand years the Danube has been an important route for transporting freight, both up- and down-river. One of the things that makes it so great for a family bike trip is that every five to ten miles there’s a little town where the cargo haulers would stop for the night. These were all important market towns and many of them still have central squares where the buildings date back hundreds of years.
On that trip with my parents we stopped at a museum, possibly in the town of Spitz although I wouldn’t swear to it, that had photos and displays related to the history of cargo-hauling on the Danube. Over the centuries the boats got bigger and bigger, in part because the Danube started to be tamed by dams, but also blasting was used to remove rapids and to create towpaths through the few narrow spots where horse teams had been unable to work. By the late 1800s the teams would sometimes consist of as many as 40 horses.
All of which makes those Yangtze Trackers photos a little puzzling to me. Sure, I get it that human labor was extremely cheap, but it still seems like it couldn’t be cheaper than horses. You can feed horses grass and hay! And a single horse can provide about as much sustained power as ten people. Those twenty people pulling a junk slowly up the river could be replaced by two or perhaps three horses. The 400 (!) people towing a very large craft could be replaced by a 40-horse team like the ones used for big craft on the Danube.
Well, at least in principle. You need a towpath and along the Yangtze, through the gorges, there were places where it would have been very hard to make one. (That was an issue along the Danube too, but only in a few spots). But why not use horses where you can? Or oxen or whatever. I feel like you could come out ahead if you put the people to work building and maintaining towpaths and other infrastructure and using animals for the brute labor. But if that were the case I assume they would have done it. So, it’s a bit of a puzzle to me.
1) From Three Gorges Dam to Chiongqing via Yangtze is 600+km, and it is very rugged country, I think far more so than around most of Danube.
2) Via Google Maps, follow that path. There are big chunks of the route that don’t have any roads, much less serious ones near the river.
3) Then there are big tributaries that come in from sides.
4) I don’t have exact numbers, but I’d guess there were 100s of kms of slots cut in near-vertical walls, just big enough for trackers to walk bent over.
We were told they usually wore little except a knive … to cut somebody loose if they slipped off the track.
It’s been nearly 20 years, but I recall much of it looking like this:
https://www.escape.com.au/destinations/asia/china/yangtze-river-cruises-explore-chinas-oncedistant-corner/news-story/5d086fc1b52ee4186297ef5adf9b0f29
Anyway, the whole story was amazing to us, but when I rummaged around the Web, it was consistent.
Cutting a towpath through the Yangtze gorges does look close to impossible. But…I dunno, the Pyramids got built somehow. Amazing what a few thousand people can do.
Perhaps there’s some alternative universe in which an emperor assigned 10,000 people to build towpaths along the Yangtze 1100 years ago. Or 200. Hey, they had gunpowder, that would make it a lot easier!
But history happened the way it happened, and I agree there are good reasons things could happen along the Danube that couldn’t happen along the Yangtze.
This reminds me of “Asterix the Gladiator”, a comic book by Rene Goscinny, first published in serialized form in 1962 in France, that features a merchant galley run by a character called “Ekonomikrisis” (fr. Epidemaïs), with the rowers not being slaves, but rather partners in a company who failed to read the fine print in the company articles before signing up.
For the unbelievers in the theory of self control, here is another historical example: https://dilbert.com/strip/2010-01-23
This is a translation in English of my translation in French of Cheung’s paper… I’m too lazy to go back to the original, but it’s close to it. He was probably thinking in Chinese (see the original paper) ; it’s the best of it and the boatmen story is not the point, it was just a joke. In fact, Cheung’s paper was written against Alchian&Demsetz’s paper, witch was written against Coase’s paper, witch was written against Knight’s book and so on ; and Cheung wins at last (what was a nightmare to Barzel, who spent a huge effort to find an answer, answer that he has not found in facts, he just went back to Knight) :
“Can a firm emerge because people shirk, cheat, or are opportunistic – as recent theses imply? Maybe. But the problem is that this sort of behavior is ubiquitous, it will only change in intensity or form depending on the contract chosen or how the property being traded is measured and valued. The behavior of a factory worker, whose laziness necessitates the service of a supervisor, is due to the fact that the worker has delegated the right to use his labor. He would not avoid the effort, or do it differently at the very least, if he were compensated for each of his tiny contributions. (…) Alchian and Demsetz argue that the controller (i.e. ‘the firm’) comes into play because of avoidance behavior. My argument goes further, saying that this behavior has its origins in the fact that another information [a proxy] has replaced effort as a mode of evaluation; the concept of shirking is therefore an indirect way of expressing that the discovery of the prices of relative contributions has a cost. So in what Coase calls a firm, shirking takes a different place than market dishonesty. »
The reader, maybe would like an ‘economic explanation’ ; here it is and again I use a translator from French : the classical capitalist firm is a regime of evaluation (‘metering’) of teamwork (‘team production’) or of the product, which logically generates dodging (‘shirking’). The problem of the ‘free rider’ in the production team (the evasion of effort, ‘shirking’) therefore originates in the company itself: the delegation of the right to use labor power and measuring effort over time; it therefore cannot logically be the origin of the company, conceived as an information device on relative prices. The problem is not in the team but in the mode of remuneration for the work : it is the work force (or the ‘human capital’) which is remunerated (ex post), and not the work itself, which is out of the market (and which is therefore ‘abstract’; the work advanced to the employer is in the contract, and – therefore – not in the market; the market is the capital of the employer). Thus, for example, Cheung shows that, theoretically, control is not necessary in a piecework regime (this is a classical problem of ‘subsumption’). Alchian and Demsetz’s article therefore lacks a solid logical foundation and is therefore not a rigorous theory of property rights, for lack of being a coherent theory of business. In a later paper (‘The Theory of the Firm Revisited’, Journal of law, economics and organizations, 1988, p. 152), Demsetz acknowledged that the basic assumption of the model, the production team involving dodging , is not a theory of business: “The reason for firm-like production is to be found in the special productivity it offers in some circumstances. Alas, although Alchian and Demsetz make this clear, they fail to discuss the sources of this special productivity. Abating the cost of shirking helps explain the firm’s inner organization but provides no rationale for the firm’s existence.” He evacuates here the theory of the firm to preserve that of the right of property, but the argument is fragile. In this same text, Demsetz delivers a murderous critique of O. Williamson, a capitalist theorist of the classical capitalist firm, but a marginal theorist of market relations.
To dig further : In their famous 1972 paper, Alchian&Demsetz write about ‘team spirit’ (at page ?) « If one could enhance a common interest in non-shirking in the guise of a team loyalty or team spirit, the team would be more efficient. » ‘Loyalty’ and ‘monitoring’ is logically the same in the model « Corporations and business firms try to instill a spirit of loyalty. This should not be viewed simply as a device to increase profits by overworking or misleading the employees, nor as an adolescent urge for belonging. It promotes a closer approximation to the employees potentially available true rates of substitution between production and leisure and enables each team member to achieve a more preferred situation. » For A&D, the firm ‘has no power of fiat, no authority, no disciplinary action any different in the slightest degree from ordinary market contracting between any two people.’ If you consider ‘team spirit’ or ‘stress’, it is the same, devices to get informations from every members by each other about their preference to ‘work’ (the ‘input’), but not about their ‘performance’ (the output that is not observable). At pages 781-782 (note 7), they write : « What is meant by performance ? Input energy, initiative, work attitude, perspiration, rate of exhaustion ? Or output ? It is the latter that is sought — the effect or output. But performance is nicely ambiguous because it suggests both input and output. It is nicely ambiguous because as we shall see, sometimes by inspecting a team member’s input activity we can better judge his output effect, perhaps not with complete accuracy but better than by watching the output of the team. » So the ‘input’ (abstracted work) is a ‘proxy’ of the ‘output’, and ‘stress’ may be a way to push worker to reveal their preferences (shirk vs work).
In the 1983 paper, Cheung writes (at pp. 9-10) : ‘Had there been no costs of measuring and pricing performance there would be no firm, and the value of the social outputs would be maximal. But these costs do exist, and product market transactions decline as they are being partly superseded by factor-market contracts. The agency costs of a monitor, a director, or a manger — which are also transaction costs — rise as the costs of discovering prices fall. » The ‘firm’ is a proxy, as markets have costs ; but the device to reduce the costs of exchanges (the firm) is also a social (transaction) cost, viewed from a higher level. Here, stress exists because the employee do not have price-informations from the market, what they do is not priced, so they try to ‘fit’ or they may as well ‘shirk’ as — logically — stress can also be ‘a device to increase profits by overworking or misleading the employees’ (cf. A&D). For Cheung ’pricing by measurement of a proxy incurs extra costs of management and increased chance of decision errors and these costs rise as the price signals transmitted contain less information, thus requiring greater control of use rights delegated by input owners.’ (p. 19) As an entrepreneur, if you make decision errors, it’s better if the employee bear the cost ; stress may exist simply because the firm can’t do better than the market : markets do not fail, but markets have costs (firms fail and firms have – so – huge social costs). The employees and the entrepreneurs ‘share’ and accept the fact that ‘measuring and pricing performance’ have a cost, but to a certain limit. Stress is a ‘cost’ that also may rise as more people leave the product market for the factor market ; logically, the price signals have less qualities, are a decreasing ‘common property resource’ (‘prezzo comune’ see P. Verri quoted by Marx twice). So the primitive traditional or ‘vernacular’ market do not exists any more, but a market place still exists. The shift from one contractual form of market to another is completly silent, hidden in the day to day life. Some can see, most don’t.
To summaries : the problem is not that the employee works in a team, the problem is in the fact that he/she is not on the product market, this, since a never ending ‘primitive accumulation’ ; at a certain level – call it ‘capitalism’ maybe – the solution – the firm – turns into a problem, in a transaction cost (call this ‘Cheung’s law’). As employees are far away from the market, it’s possible to make money on this by generating more costs on the markets. The capitalist firm produces transaction (and social) costs.
See my (in French !) :
https://www.researchgate.net/publication/312197994_Cheung_vs_Alchian_and_Demsetz_in_French
https://www.researchgate.net/publication/315677488_From_Knight_and_Coase_to_Alchian_Demsetz_and_Cheung_in_French
I think your origin story isn’t quite right. The mother was retelling an Astrix joke.
https://twitter.com/LudditeHacker/status/1532386948047941632
Update on the Kaur, Kremer, and Mullainathan paper: they have now published an erratum: https://www.journals.uchicago.edu/doi/abs/10.1086/721271
The correction is on the narrow point of the attribution of the quote which “does not appear in Cheung’s original article”. They state that “the incorrect version of the quote also appears in Jensen et al. (1998)”. No word on the veracity or otherwise of the story itself.
They conclude “Consequently, this incorrect quote can be omitted from the paper without any impact on the substance of the paper.”
Anon:
Yeah, they had no comment on how a goofy question from a set of practice exam questions made it into their article, or why they included it in the first place, given that it had no impact on the substance of the paper. I remain amused/disturbed that none of the authors or reviewers or editors of the original article noticed how weird that story was!
Repin vs Cheung ?
https://en.wikipedia.org/wiki/Barge_Haulers_on_the_Volga
About the reeve :
https://en.wikipedia.org/wiki/Reeve_(England)
No industrial revolution without the reeve ?
Russians use to do it better :
https://en.wikipedia.org/wiki/Artel