The Story of William Lee and His Knitting Machine

The story of William Lee and his knitting machine pops up now and again. For example, the 2019 World Development Report from the World Bank has a mention near the start of Chapter 1: "In 1589, Queen Elizabeth I of England was alarmed when clergyman William Lee applied for a royal patent for a knitting machine: `Consider thou what the invention would do to my poor subjects,' she pointed out. `It would assuredly bring them to ruin by depriving them of employment.'”As someone who is inherently dubious about direct quotations from conversations held in 1589, I went to the footnote, which sent me to Richard Alexander McKinley, ed. 1958. The City of Leicester. Vol. 4 of A History of the County of Leicester.  But I was unable to find the quotation in the online version of this volume.

The William Lee story is also told as the start of Chapter 7 of the 2012 book Why Nations Fail, by Daron Acemoglu and James Robinson. But the citation there is to a website for Calverton Village, where Lee grew up back in the 16th century. The webpage includes sentences like, "Those of you who live in the 20th century are aware of the bare facts of my life."  As someone who is inherently suspicious of first-person internet essays written by people who lived in the 16th century, I continued to hunt for something closer to an original source.

I won't tell you the full story of my journeys through libraries and archives, but instead will just jump to the destination.  The underlying source seems to be in an 1831 book, History of the Framework Knitters, written by Gravenor Henson. The book was then republished in a 1970 edition. It's available through the magic of Google Books: the relevant story about William Lee's experience runs from pp. 38-52. 

Henson was an important British trade union leader in the early 19th century. As Stanley D. Chapman notes in his "Introduction" about Henson's purpose in writing the book: "His main theme was that hosiery, lace and all other industries should be regulated by the government so as to maintain a decent living standard for the workers and fair conditions of trade. British industries must be protected from direct foreign competition and, more particularly, from industrial espionage, migration of skilled workmen to other countries, and export of machinery." 

Henson is writing in 1831, and thus has seen the opening decades of the Industrial Revolution. But in his judgement, William Lee's invention of a machine for knitting stockings more than two centuries earlier was "the greatest triumph of mechanical genius then, or or many ages known." At a time when technology in the textile industry meant spinning wheels and hand looms, Lee invented a machine that could knit stockings. For an detailed description of its workings, a useful starting point is "William Lee and His Knitting Machine," by R. L. Hills,  in the Journal of The Textile Institute
(1989, 80:2, pp. 169-184). 

Those who want the entire passage from Henson's history can go to Google Books. Here, I'll focus how Henson tells five elements of the story: 

• The origin of the Lee's invention in a disappointed romance
• The source of the story
• The encounter with Queen Victoria
• The excessive monopolies of that time
• Taking the technology to France

Origins of the Invention in a Disappointed Romance

"The invention of the knitting machine, (since better known by the name of the stocking frame and the workmen as framework-knitters,)  owed its origin, as is universally agreed, to a singular circumstance the disappointed love of the inventor the Rev. William Lee, curate of Calverton, in the county of Nottingham. This gentleman, it is said, paid his addresses to a young woman in his neighbourhood, to whom, from some cause, his attentions were not agreeable; or, as with more probability it has been conjectured, she affected to treat him with negligence, to ascertain her power over his affections. Whenever he paid his visits, she always took care to be busily employed in knitting, and would pay no attention to his addresses; this conduct she pursued to such a harsh extent, and for so long a period, that the lover became disgusted, and he vowed to devote his future leisure, instead of dancing attendance on a capricious woman, who treated his attention with cold neglect, in devising an invention that should effectually supersede her favorite employment of knitting, So sedulous was Mr Lee in his new occupation, that he neglected every thing to accomplish this new object of his attentions; even his sacerdotal duties were neglected; In vain did his sweetheart endeavour to reclaim him; she found,too late, that she had carried her humour too far, all interests, all avocations, all affections were absorbed in his new pursuit, from which he imagined he should realize an immense fortune. His curacy was despised, and at length abandoned, as beneath the notice of a person who had formed in his imagination such gigantic prospects." 

As Henson tells the story, Lee came up with the idea for the framework knitter after hours upon hours of watching the fingers of his romantic interest.  As Henson describes in extensive, delightful, and (to me) impenetrable detail, it involved a complex array of  hooks, needles, grooves, combs, springs, trucks, lead sinkers, the slur cock, jacks, and other parts attached to a wooden board. 

The Source of the Story!

"The greater part of this information was obtained from Mr, Hardy, Twister's-alley, Bunhill-row, London, who was apprenticed in London, in 1711, and died, aged 90, in 1790--from Mr Woods, Godalming--and from an ancient stocking maker who died in Collin's Hospital, Nottingham, aged 92, and who was apprenticed in Nottingham in the reign of Queen Anne, and all of them gave a similar account. This is in some measure confirmed by the arms of the London Company of Framework-knitters which consist of a stocking frame without the woodwork, with a clergyman on one hand and a woman on the other as supporters."

Going to See the Queen

Having now discovered the method of knitting by machinery, his next effort was directed to obtain the golden harvest which had flattered his imagination. He removed his invention to London for the purpose presenting it to the Queen, in the fond hope of receiving her congratulations, and those of her whole court. ...  Such a discovery as the art of making so complicated a fabric as knitting by machinery was considered almost miraculous; Elizabeth was excited by curiosity (in company with Lord Hunsdon and his son) to inspect the frame incognito. Lee now imagined himself certain of a handsome remuneration, but his hopes proved delusive. It is said that nothing could exceed her disappointment, when she perceived that Mr. Lee was not making silk but woollen stockings, and that his machine was not capable, without great improvement, of making the articles in which she took so much pride of being the first wearer. ...

Though supported by the powerful intercession of Lord Hunsdon, and his son Sir Wm Cary, equally a favorite with Elizabeth, she refused to make either a grant of money or secure him a monopoly or patent. Her answer is said to have been to the following purport: -- My Lord, I have too much love to my poor people, who obtain their bread by the employment of knitting, to give my money to forward an invention which will tend to their ruin, by depriving them of employment, and thus make them beggars. Had Mr. Lee made a machine that would have made silk stockings, I should, I think, have been somewhat justified in granting him a patent for that monopoly, which would have affected only a small number of my subjects. but to enjoy the exclusive privilege of making stockings for the whole of my subjects is too important to grant to any individual."

The Excessive Monopolies of that Time

Apparently Lee ran into a different problem: Queen Elizabeth has been granting lots of monopolies to court favorites, and there was a widespread sense that it had gotten out of hand. Thus, the granting of unwarranted monopolies became a reason to deny Lee a monopoly as well. Henson writes:

The time which Mr. Lee had chosen to make an application to the government, though to his sanguine mind very propitious for remuneration. was in reality the reverse; the treasury of Elizabeth was extremely low, owing to the enormous expenses which she had incurred in preparations to meet the Spanish armada in the preceding year. Already had the Parliament begun to express their decided umbrage at the grant of the privileges of patents for monopolies; which, as they were then conducted, were justly considered national evils, and the most odious means of rewarding court favorites, by an excessively tyrannical mode of private taxation. Nearly all the nobles enjoyed a patent for the most useful and general articles of consumption, such as iron, lead, saltpetre, salt, oil, glasses, &c. &c., to the amount of more than one hundred articles, which were sold, imported, or exported by virtue of letters patent. These patent rights, were sold to persons who farmed the profits, and thus demanded what prices they thought prudent for their commodities. When the general list was read over in the House of Commons in 1601, a member, indignant at the the extortions, exclaimed, " Is bread amongst the number?" "Bread?" cried the house, with astonishment, "Yes I assure you," he sarcastically replied, "if we go on at this rate, we shall have a monopoly of bread before next Parliament." 

Going to France

William Lee persevered, encouraged by the thought that if he could build a knitting machine for silk stockings, he might yet receive a patent or other financial support from Queen Elizabeth. Henson reports that by 1596-97, after 7-8 years more work, he succeeded. Henson refers to this invention as "the most wonderful act of a single genius ever displayed, even in these mechanical ages." Henson reports that although there were some rumors that Lee received a patent, the "London and Godalming men, unitedly say that he had no patent." He was then enticed to relocate to France, but his political support in France disintegrated after the assassination of Henry the Great, and Lee died soon thereafter. Henson writes:

His [Lee's] apprentices and workmen were principally composed of his relatives, who thought it so high a honor to belong to the new craft, that they wore their working-needles, having ornamental silver shafts, suspended from a silver chain, at their breasts; and this mark of distinction was preserved so late as the reign of Queen Anne. After the death of Elizabeth, Mr. Lee, who was now past the meridian of life, became in some measure melancholic, for he found that her successor James, who retained Elizabeth's minister Cecil, followed the same course in refusing him remuneration. ...
About this time, the Marquis de Rosni, better known as the Duke of Sully, first minister and favorite of Henry IV. one of the ablest men Europe has produced in modern times, arrived in London, as ambassador, for the purpose of negotiating an alliance between France, England, Holland, Venice, and the northern powers, against Philip III., Emperor of Germany, King of Spain, Portugal, Naples, and Sicily. The policy of this truly great man, who had revived to an extent before unknown the manufactures of France, speedily induced him to take advantage of the neglect of Cecil. He applied to Mr. Lee, and made him very splendid offers, provided he would remove himself and his machinery to France. ...

Though he declined acceding to Sully's wishes, he gave him reason to hope that, provided his own government still neglected him, he might yet be induced to emigrate. - - Some years after this, having lost his great patron and apprentice Lord Hunsdon, he was,induced to close with the proposals of the Duke of Sully, and to remove with the whole of his men, excepting one who (returned to Nottingham), to Rouen, in Normandy. Having established his frames, and commenced his manufactory, he went to Paris, where he was introduced by the Duke to his Sovereign, Henry the Great, who gave him a gracious reception. This benevolent Monarch, who was then, and is now, the darling of the French nation, particularly of the working classes, was meditating the humbling of the ascendancy of the house of Austria, and was preparing for the opening of a campaign the most brilliant that had taken place in that age, when the desperate assassin, Francis Ravaillac, as he passed through the streets of Paris, during a momentary stop of his carriage, got upon its wheels, and at two blows deprived Henry of life, and poor William Lee of all his brilliant expectations. He was then in Paris, expecting, after the hurry of the departure of Henry, that his minister, Sully, would have leisure to arrange with him the establishing of his manufacture upon an extended scale. So dreadful a misfortune acted as a thunder bolt upon the unfortunate ingenious man, and when, on waiting upon Sully, he found that that great minister had resigned the whole of his appointments into the hands of Mary de Medicis, the Queen Regent, and that he was preparing in disgust to retire to his estate, leaving the government in the hands of Italians, his fortitude forsook him, and he gave way to the melancholy which had attacked him in London; he thought himself the most unfortunate of men; alone, unprotected, in a foreign country, after twenty-two years’ struggles;" he sickened at the thought, and sent for his brother James, from Rouen, but before he arrived, the inventor of the stocking frame died of a broken heart, in the midst of strangers. This happened in the year 1610.

The technology of Lee's knitting machine was at this point known, and gradually adapted and adopted. By the 1620s it has become established as a method of production.

Who knows what Queen Elizabeth actually said, more than 250 years before Henson published his history in 1831? But quoting her concerns about the workers, together with concern about her own silk stockings, is probably as well-justified as many other long-ago historical examples. At least if you (or I) tell the story in the future, there is a bit more context about monopoly powers of that time, and how technology that cannot flourish in one country may head to another.

Sources of US Greenhouse Gas Emissions

Each year the Environmental Protection Agency produces an Inventory of U.S. Greenhouse Gas Emissions and Sinks. The draft version of the report for 1990-2017 was published in February 2019. 

Here's a figure showing gross emissions of greenhouse gases in the US. Emissions that are not carbon dioxide have been converted to its "equivalent."

Several themes jump out from the figure. One is that the overwhelming share of emissions are plain old carbon dioxide, rather than methane or other gases. Another is that the total emissions have been dropping in the last few years, and are more-or-less back to 1990 levels, which one can interpret either through the lens of "could be worse" or "should be better," as you are so inclined.

Given the predominance of carbon dioxide emissions, let's dig into those a little deeper. Most of the carbon dioxide emissions come from burning fossil fuels. This table shows the breakdown into a few main sectors.

Total US emissions of greenhouse gases in 2017 were 6472 million metric tons of carbon dioxide-equivalent.  Thus, transportation and the electric power sector combined account for more than half of all emissions. It seems to me both appropriate to focus on reducing emissions in those sectors, but also to remember that, combined, they are only about half of the problem. Emissions from industrial, residential, and commercial activities are also pretty significant.

Moreover, methane emissions landfill, leakages in natural gas systems, and the digestive tracts of livestock make up the equivalent of 449 million metric tons of carbon dioxide emissions in 2017. Agricultural soil management released nitrogen oxides that are the equivalent of 266 million metric tons of carbon dioxide in 2017, roughly equivalent to fossil fuel-related carbon emissions from the residential or the commercial sector. Hydrofluorocarbons that are being used to to replace ozone-depleting substances account for another 152 million metric tons of CO2-equivalent emissions.

This EPA report is a tabulation of greenhouse gas emissions. It isn't about questions of how emissions of greenhouse gases might affect climate, or estimating economics costs from changes in climate, or about what methods of addressing greenhouse gas emissions are likely to be more or less cost-effective. For discussions of these points, I recommend a three-paper "Symposium on Climate Change" in the Fall 2018 issue of the Journal of Economic Perspectives. (Full disclosure: My actual paid job, as opposed to my blogging avocation, is Managing Editor of the JEP.) The papers are:

• "An Economist's Guide to Climate Change Science," by Solomon Hsiang and Robert E.Kopp
• "Quantifying Economic Damages from Climate Change." by Maximilian Auffhammer
• "The Cost of Reducing Greenhouse Gas Emissions,"  by Kenneth Gillingham and James H.Stock

US Imposes Tariffs, and the 2018 Trade Deficit Rises: Lessons?

Early in 2018, President Trump began instituting a series of tariffs on international trade. As he tweeted in March 2018: "When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!"

Last week, the US Department of Commerce announced the US trade figures for year-end 2018. After a year of President Trump's tariffs, the US trade deficit is larger in 2018 than it was in 2017. The bilateral US trade deficit with China is up, too. The government report notes:

For 2018, the goods and services deficit was $621.0 billion, up $68.8 billion from $552.3 billion in 2017. Exports were $2,500.0 billion in 2018, up $148.9 billion from 2017. Imports were $3,121.0 billion, up $217.7 billion from 2017. The 2018 increase in the goods and services deficit reflected an increase in the goods deficit of $83.8 billion, or 10.4 percent, to $891.3 billion and an increase in the services surplus of $15.0 billion, or 5.9 percent, to $270.2 billion. As a percentage of U.S. gross domestic product, the goods and services deficit was 3.0 percent in 2018, up from 2.8 percent in 2017. ... The deficit with China increased $43.6 billion to $419.2 billion in 2018. Exports decreased $9.6 billion to $120.3 billion and imports increased $34.0 billion to $539.5 billion.

Thus, a fairly common situation arises. A politicians claims that a certain Problem has a certain Solution. But when the politician is elected and the Solution is tried, the Problem is either the same or worse. It is rare for any politician in this situation to reconsider their Solution. Instead, the usual approaches are to argue that an even bigger and longer dose of the Solution is needed, or that the Solution was somehow sabotaged by poor implementation and political opposition.  

It will be interesting to see if President Trump acknowledges at some point that using tariffs to reduce the US trade deficit failed in 2018. My expectation is that any such acknowledgement would be followed by a claim that his tariff Solution was somehow undercut and thus only needs to be redoubled in the future. 

But for those with eyes to see, it should be apparent that trade deficits and surpluses rise and fall as a a result of large-scale macroeconomic factors, not because of fluctuation in "unfairness" that can be fine-tuned and adjusted with tariffs. I've tried to explain this point in more detail a few times: for example, see "Misconceptions about Trade Deficits" (March 30, 2018), "Some Facts about Current Global Account Balances" (August 7, 2018), and "US Not the Source of China's Growth; China Not the Source of America's Problems" (December 4, 2018). Here, I'll just focus on events of 2018. 

The US economy had solid economic growth in 2018, driven in part by the short-term effects of the tax cuts signed into law in December 2017. When an economy grows briskly,  consumption tends to rise, including its consumption of imported products. This pattern is standard. For example, the US trade deficit fell sharply during the Great Recession, because consumption of all kinds--including imports--fell as well. Meanwhile, China has been experiencing a slowdown in its rate of growth, so there has been less of a rise in consumption and imported products than would have been expected.

The health of the US economy has led the Federal Reserve to raise interest rates several times in the last few years. As a result, global investment funds have flowed back to the US economy, and the additional demand for US dollars in foreign exchange markets has pushed up the foreign exchange value of the US dollar. This makes US exports more expensive overseas, and also makes it cheaper for US consumers to buy imported products. 

It's also a completely standard dynamic that if the US imposes tariffs, other countries will respond with tariffs on US products. In my home state of Minnesota, for example, Trump's tariffs have tended to raise prices and help iron ore producers in the northern part of the state, but China's countertariffs on soybeans have hurt farmers in the central and southern part of the state. 

The idea that exports and imports are the outcome of of macro variables like levels and shifts between consumption and savings across different econmies, which are also affected by exchange rates, is completely standard intro-level economics. News stories on the Department of Commerce announcement made these points. 

The US and other  high-income countries have legitimate concerns about how China's government and firms treat intellectual property. That's a real Problem, and it's worth working to actual  Solutions--like having high-income countries form a united front against these Chinese practices through organizations like the the World Trade Organization and the World Intellectual Property Organization. If internationally-coordinated tariffs targeted on the main Chinese offenders emerged from that process, I suspect that even a lot of economists with free-trade leanings would see a case for such a step. But broad overall trade deficits are not the Problem to be chasing, and even if it was the right Problem,  the year 218 has shown that Trump's tariffs are not the Solution.

Benjamin Franklin and the Origins of Daylight Savings Time

Daylight savings time starts this weekend. Here's a post from two years ago on its intellectual origins.
___________

The idea that adjusting the time of day can result in energy savings traces back to a whimsical essay written by Benjamin Franklin back in 1784. Franklin claims in the essay that while living in Paris and attending parties every night, he is habitually going to bed "three or four hours after midnight," and rising at noon. However, he is astonished to find one morning that the sun is rising and casting light at 6:00 am. He claims as his own personal discovery that while the ancients knew when the sun rose--after all, the time is in the almanac!--they did not know that the sun "gave light as soon as he rose. This is what I claim as my discovery. If the ancients knew it, it might have been long since forgotten; for it certainly was unknown to the moderns, at least to the Parisians ..." Franklin suggests that if everyone rose with the sun and went to bed with the sun during the summertime, there would be a vast savings of candle wax. The saved candle-wax could then be used during the shorter days of winter.

For the economists among us, there is a charm in how Franklin jibes at the "lovers of economy," and writes in what seems to me a jesting fashion: "I was pleased to see this general concern for economy, for I love economy exceedingly." Here's Franklin's letter:

To THE AUTHORS of
The Journal of Paris
1784

MESSIEURS,

You often entertain us with accounts of new discoveries. Permit me to communicate to the public, through your paper, one that has lately been made by myself, and which I conceive may be of great utility.

I was the other evening in a grand company, where the new lamp of Messrs. Quinquet and Lange was introduced, and much admired for its splendour; but a general inquiry was made, whether the oil it consumed was not in proportion to the light it afforded, in which case there would be no saving in the use of it. No one present could satisfy us in that point, which all agreed ought to be known, it being a very desirable thing to lessen, if possible, the expense of lighting our apartments, when every other article of family expense was so much augmented.

I was pleased to see this general concern for economy, for I love economy exceedingly.

I went home, and to bed, three or four hours after midnight, with my head full of the subject. An accidental sudden noise waked me about six in the morning, when I was surprised to find my room filled with light; and I imagined at first, that a number of those lamps had been brought into it; but, rubbing my eyes, I perceived the light came in at the windows. I got up and looked out to see what might be the occasion of it, when I saw the sun just rising above the horizon, from whence he poured his rays plentifully into my chamber, my domestic having negligently omitted, the preceding evening, to close the shutters.

I looked at my watch, which goes very well, and found that it was but six o'clock; and still thinking it something extraordinary that the sun should rise so early, I looked into the almanac, where I found it to be the hour given for his rising on that day. I looked forward, too, and found he was to rise still earlier every day till towards the end of June; and that at no time in the year he retarded his rising so long as till eight o'clock. Your readers, who with me have never seen any signs of sunshine before noon, and seldom regard the astronomical part of the almanac, will be as much astonished as I was, when they hear of his rising so early; and especially when I assure them, that he gives light as soon as he rises. I am convinced of this. I am certain of my fact. One cannot be more certain of any fact. I saw it with my own eyes. And, having repeated this observation the three following mornings, I found always precisely the same result.

Yet it so happens, that when I speak of this discovery to others, I can easily perceive by their countenances, though they forbear expressing it in words, that they do not quite believe me. One, indeed, who is a learned natural philosopher, has assured me that I must certainly be mistaken as to the circumstance of the light coming into my room; for it being well known, as he says, that there could be no light abroad at that hour, it follows that none could enter from without; and that of consequence, my windows being accidentally left open, instead of letting in the light, had only served to let out the darkness; and he used many ingenious arguments to show me how I might, by that means, have been deceived. I owned that he puzzled me a little, but he did not satisfy me; and the subsequent observations I made, as above mentioned, confirmed me in my first opinion.

This event has given rise in my mind to several serious and important reflections. I considered that, if I had not been awakened so early in the morning, I should have slept six hours longer by the light of the sun, and in exchange have lived six hours the following night by candle-light; and, the latter being a much more expensive light than the former, my love of economy induced me to muster up what little arithmetic I was master of, and to make some calculations, which I shall give you, after observing that utility is, in my opinion the test of value in matters of invention, and that a discovery which can be applied to no use, or is not good for something, is good for nothing.

I took for the basis of my calculation the supposition that there are one hundred thousand families in Paris, and that these families consume in the night half a pound of bougies, or candles, per hour. I think this is a moderate allowance, taking one family with another; for though I believe some consume less, I know that many consume a great deal more. Then estimating seven hours per day as the medium quantity between the time of the sun's rising and ours, he rising during the six following months from six to eight hours before noon, and there being seven hours of course per night in which we burn candles, the account will stand thus;--

In the six months between the 20th of March and the 20th of September, there are
Nights 183
Hours of each night in which we burn candles 7
Multiplication gives for the total number of hours 1,281
These 1,281 hours multiplied by 100,000, the number of inhabitants, give 128,100,000
One hundred twenty-eight millions and one hundred thousand hours, spent at Paris by candle-light, which, at half a pound of wax and tallow per hour, gives the weight of 64,050,000
Sixty-four millions and fifty thousand of pounds, which, estimating the whole at-the medium price of thirty sols the pound, makes the sum of ninety-six millions and seventy-five thousand livres tournois 96,075,000

An immense sum! that the city of Paris might save every year, by the economy of using sunshine instead of candles. If it should be said, that people are apt to be obstinately attached to old customs, and that it will be difficult to induce them to rise before noon, consequently my discovery can be of little use; I answer, Nil desperandum. I believe all who have common sense, as soon as they have learnt from this paper that it is daylight when the sun rises, will contrive to rise with him; and, to compel the rest, I would propose the following regulations; First. Let a tax be laid of a louis per window, on every window that is provided with shutters to keep out the light of the sun.

Second. Let the same salutary operation of police be made use of, to prevent our burning candles, that inclined us last winter to be more economical in burning wood; that is, let guards be placed in the shops of the wax and tallow chandlers, and no family be permitted to be supplied with more than one pound of candles per week.

Third. Let guards also be posted to stop all the coaches, &c. that would pass the streets after sunset, except those of physicians, surgeons, and midwives.

Fourth. Every morning, as soon as the sun rises, let all the bells in every church be set ringing; and if that is not sufficient?, let cannon be fired in every street, to wake the sluggards effectually, and make them open their eyes to see their true interest.
All the difficulty will be in the first two or three days; after which the reformation will be as natural and easy as the present irregularity; for, ce n'est que le premier pas qui coûte. Oblige a man to rise at four in the morning, and it is more than probable he will go willingly to bed at eight in the evening; and, having had eight hours sleep, he will rise more willingly at four in the morning following. But this sum of ninety-six millions and seventy-five thousand livres is not the whole of what may be saved by my economical project. You may observe, that I have calculated upon only one half of the year, and much may be saved in the other, though the days are shorter. Besides, the immense stock of wax and tallow left unconsumed during the summer, will probably make candles much cheaper for the ensuing winter, and continue them cheaper as long as the proposed reformation shall be supported.

For the great benefit of this discovery, thus freely communicated and bestowed by me on the public, I demand neither place, pension, exclusive privilege, nor any other reward whatever. I expect only to have the honour of it. And yet I know there are little, envious minds, who will, as usual, deny me this and say, that my invention was known to the ancients, and perhaps they may bring passages out of the old books in proof of it. I will not dispute with these people, that the ancients knew not the sun would rise at certain hours; they possibly had, as we have, almanacs that predicted it; but it does not follow thence, that they knew he gave light as soon as he rose. This is what I claim as my discovery. If the ancients knew it, it might have been long since forgotten; for it certainly was unknown to the moderns, at least to the Parisians, which to prove, I need use but one plain simple argument. They are as well instructed judicious, and prudent a people as exist anywhere in the world all professing, like myself, to be lovers of economy; and,from the many heavy taxes required from them by the necessitities of the state, have surely an abundant reason to be economical. I say it is impossible that so sensible a people, under such circumstances, should have lived so long by the smoky, unwholesome, and enormously expensive light of candles, if they had really known, that they might have had as much pure light of the sun for nothing. I am, &c.

A SUBSCRIBER

P.S. The concept of Daylight Savings Time is sometimes attributed to George Hudson, a New Zealand etymologist, who proposed the concept in an 1895 meeting, as reported in the Transactions and Proceedings of the Royal Society of New Zealand 1868-1961, and  then followed up with a fuller discussion in an 1898 paper in the same publication outlet.  Franklin's earlier discussion was already known at the time; for example, a critical discussant in the 1895 meeting "said that the only practical part of Mr. Hudson's paper had long since been anticipated by Benjamin Franklin." However, Hudson certainly deserves credit for working out details in a more systematic way than Franklin's more whimsical letter.

P.P.S. For those not yet sated on this subject, here's a post on "The Economics of Daylight Savings Time" (March 31, 2016).

Economics of Daylight Savings Time

With the shift to Daylight Savings Time taking place this weekend, it seemed appropriate to rerun this post from a three years ago on the subject:

Where I live in Minnesota, the short days of December have less than 9 hours of daylight, with sunrise around 7:50 am and sunset around 4:40 pm. In contrast, the long days of June have about 15 1/2 hours of daylight, with sunrise around 5:30 am and sunset around 9:00 pm. But of course, those summer times for sunrise and sunset use Daylight Savings Time. If we didn't spring the clocks forward in March, the summertime in Minnesota would feature a 4:30 am sunrise and an 8:00 sundown.

If I was a stronger and more flexible person, there would be no need for Daylight Savings Time. I would just rise with the summertime sun at 4:30 and take advantage of those extra daytime hours. But I don't synchronize my day to the sunlight. Instead, like most people, I have daily schedules that involve getting up at roughly same time most days. For me, this is the strongest case for Daylight Savings Time: it shifts an hour of daylight that would otherwise occur when I'm asleep to a time of day at a time of year when I can enjoy it. For those who live closer to the equator, where the seasonal variation in length of day is less, I presume that Daylight Savings Time matters less. But for those of us in northern climates, long summer evenings are a nice counterbalance to those dismal winter days when you drive to work before sunrise and drive home from work after sunset.

However, discussions about the merits of Daylight Savings Time aren't usually focused on sweet summertime evenings. For example, the US Department of Transportation website lists three practical reasons for Daylight Savings time and the longer summer evenings: saves energy, reduces traffic deaths, and reduces crime. Austin C. Smith reviews the evidence on these claims before presenting his own research in "Spring Forward at Your Own Risk: Daylight Saving Time and Fatal Vehicle Crashes," which appears in the April 2016 issue of the American Economic Journal: Applied Economics 8:2, 65–91). (The AEJ: Applied isn't freely available on-line, but many readers will have access through library subscriptions. Full disclosure: This journal is published by the American Economic Association, which also publishes the Journal of Economic Perspectives where I work as Managing Editor.)

It's long been argued that  Daylight Savings Time provides modest but real energy savings, but Smith cites some recent evidence that leans the other way. A standard method in empirical economics in recent years is to look for "natural experiments," which are situations where Daylight Saving Time was or was not imposed in a way that offers a chance for some comparisons. Thus, Smith writes:

"Kellogg and Wolff (2008) use a natural experiment in Australia where DST was extended in some states to accommodate the Sydney Olympics. They find that while DST reduce energy demand in the evening, it increases demand in the morning with no significant net effect. Kotchen and Grant (2011) make use of a quasi-experiment in Indiana where some Southern Indiana counties did not practice DST until 2006. Their work suggests that DST could actually increase residential energy use, as increased heating and cooling use more than offset the savings from reduced lighting use."

(For those who would like specific citations for these papers:

• Kellogg, Ryan, and Hendrik Wolff. 2008. “Daylight time and energy: Evidence from an Australian experiment.” Journal of Environmental Economics and Management 56 (3): 207–20. 
• Kotchen, Matthew J., and Laura E. Grant. 2011. “Does daylight saving time save energy? Evidence from a natural experiment in Indiana.” Review of Economics and Statistics 93 (4): 1172–85.) 

Smith's main focus is on how Daylight Savings Time affects traffic fatalities.  Smith looks at the data on all US vehicle crashes that involve a fatality from 2002-2011. He uses two main comparisons: 1) he looks at days around the shift from Standard Time to DST each year, looking for a "discontinuity" or a jump in the rate of fatalities when the change happens; and 2) he compares dates that were covered by DST in some years but not in other years--because the exact date of the shift varies from year to year. He argues that sleep disruption in the spring transition to DST imposes significant costs:

"DST impacts practicing populations through two primary mechanisms. First, it creates a short-term disruption in sleeping patterns following the spring transition. Using the American Time Use Survey, Barnes and Wagner (2009) find that Americans sleep 40 minutes less on the night of the spring transition, but they do not sleep a significant amount more on the night of the fall transition despite the extra hour. Second, DST creates darker mornings and lighter evenings than would be observed under Standard Time. ... In both specifications I find a 5–6.5 percent increase in fatal crashes immediately following the spring transition. Conversely, I find no impact following the fall transition when no significant shock to sleep quantity occurs. ...This suggests that the spring transition into DST is responsible for over 30 deaths annually ...The total costs of DST due to sleep deprivation could be orders of magnitude larger when worker productivity is considered ..." 

In passing, Smith also mentions a recent studies about effects of Daylight Savings Time on crime. The December 2015 issue of the Review of Economics and Statistics includes "Under the Cover of Darkness: How Ambient Light Influences Criminal Activity," by Jennifer L. Doleac
and Nicholas J. Sanders (97: 5, pp. 1093-1103). They find that cases of robbery drop by 7% in the weeks right after Daylight Savings Time begins.

Smith's article is also full of "did-you-know" tidbits about Daylight Savings Time:

Did you know that about 1.5 billion people around the world practice some form of Daylight Savings Time? Of course, this means that about 5.5 billion people around the world, presumably those who live closer to the equator, don't use it.

Did you know that farmers tend to oppose Daylight Savings Time? "DST is often mistakenly believed to be an agricultural policy. In reality, farmers are generally against the practice of DST because it requires them to work for an extra hour in the morning, partially in darkness, to coordinate with the timing of markets ..."

Did you know that the specific idea for Daylight Savings Time dates back to 1895, when "the formal procedure was proposed by George Vernon Hudson, an entomologist who wanted more light in the evenings to pursue his passion of collecting insects ..."

I'm a sleep-lover, and I disruption to sleep patterns is something I feel in the center of my being. My personal experience with evening insects is pretty much limited to catching lightning bugs and slapping mosquitoes. But I'm with George Vernon Hudson in liking long summer evenings.

Economic Tidbits: BPEA -- Spring 2019

Since 1970, the Brookings Institution has been publishing the Brookings Papers on Economic Activity twice a year. The papers are invited and policy-relevant, and although they often contain a dose of statistical and theoretical analysis, some effort is made to keep the main themes readable to the patient generalist reader. It is fairly common that themes from BPEA articles become the conventional economic wisdom for a few years after publication.

For those who are interested,  here's a quick sketch of the six papers just released for the Spring 2019 issue.

"On falling neutral real rates, fiscal policy, and the risk of secular stagnation," by Lukasz Rachel and Lawrence H. Summers

"[N]eutral real interest rates would have declined by far more than what has been observed in the industrial world and would in all likelihood be significantly negative but for offsetting fiscal policies over the last generation. Their findings support the idea that mature industrial economies are prone to secular stagnation, underscoring the urgent need for governments to find new sustainable ways of promoting investment and long-term strategies to rekindle private demand."

"A forensic examination of China’s national accounts," by Wei Chen, Xilu Chen, Chang-Tai Hsieh, and Zheng (Michael) Song  

"[N]ew research from a team of economists investigating China’s GDP accounting framework and the data the national account is built on has found that the true growth rate of Chinese GDP has been overstated by almost 2 percentage points annually from 2008 to 2016. Incentives at the local level to report growth have skewed statistics and officials at the national level have failed to rectify this over-reporting."

"On the economics of a carbon tax for the United States," by Gilbert E. Metcalf

"The ever-rising accumulation of greenhouse gases in the Earth’s atmosphere—the most prominent of which is carbon dioxide—is costing the US. The damage from a one-degree Celsius increase in temperature is estimated to equal about 1.2 percent of GDP. Gilbert Metcalf argues that a carbon tax would help reduce US emissions and offers examples from the British Columbian carbon tax to show that a well-designed carbon tax can actually boost jobs and GDP, while reducing carbon emissions."


"Okun revisited: Who benefits most from a strong economy?" by Stephanie Aaronson, Mary C. Daly, William Wascher, and David W. Wilcox

"In 1973, economist Arthur Okun asked whether a `high-pressure economy' could contribute to the upward mobility of U.S. workers. Over forty years later, Brookings’ Stephanie Aaronson and the Federal Reserve’s Mary Daly, William Wascher, and David Wilcox revisit his central question to ask who the U.S. economy is benefiting today. In particular, how is it benefitting less advantaged and marginalized groups, such as African-Americans, Hispanics, and women?"

"Fiscal space and the aftermath of financial crises: How it matters and why," by Christina D. Romer and David H. Romer

"Based on data from 30 OECD countries since 1980, their research finds that the debt ratio does not matter simply because of its impact on current market access or because it is a proxy for market access, but also because of its impact on policymaker choices. Countries with lower debt-to-GDP ratios responded to financial distress with much more expansionary fiscal policy than countries that face a crisis with higher debt."

"A unified approach to measuring u∗," by Richard K. Crump, Stefano Eusepi, Marc Giannoni, and Aysegul Sahin

"The unemployment rate in the United States peaked at 10% in October 2009. Since then, it has declined gradually, reaching below 4% for the first time in almost twenty years— igniting a debate about how sustainable these low levels are and how monetary policy should respond. Much of this debate centers around determining the natural rate of unemployment, u*t, or the unemployment rate at which inflation is stable. Bridging two popular measurement approaches, new research ... found that the natural rate of unemployment in the United States stood at 4.1% as of the third quarter of 2018."

Why Economists Usually Oppose New Light Rail and Subways--and Other Thoughts on Urban Transportation

When it comes to urban mass transit, economists often find themselves arguing that,  the ratio of benefits to costs in most is far better for buses than for rail-based system--unless there is a densely populated urban core where nearly-full trains can run a very frequent intervals. Matthew Turner explains why in "Local Transportation Policy and Economic Opportunity," written for the Hamilton Project  at the Brookings Institution (January 31, 2019).

The main theme of the paper is to think about the current status of U.S. highways, public transit buses, and urban rail cars, and offer some policy suggestions. I'll mention a few of those thoughts in a moment, but here's what Turner has to say about the opinions of economists on light rail and subways (citations omitted):

Economists have long argued against subways and light rail except as a last resort. This argument follows from the high cost of building fixed-rail urban transport. The following example will illustrate this logic. In 2015 the city of Providence, Rhode Island, considered a short, light rail line. Construction of the track and purchase of the rail cars was forecast at about $100 million in all. The system was projected to carry about 2,600 riders per day. The city intended to finance the project with bonds that would pay 3.5 percent interest. 

For the sake of illustration, suppose the city only paid interest on the cost of the system, and never paid down the principal. In this case, interest on the bonds would be $3.5 million per year. Now suppose that the system achieved its projected ridership and carried 2,600 riders per day for each of the approximately 250 workdays each year. In that case the system would carry about 650,000 people per year. Dividing the annual bond payments by the number of annual riders works out to about $5.40 per rider in interest—and this is before paying to operate the train or maintain the system. If the operating and maintenance costs of this system were the same as for Rhode Island’s bus system, then those costs would be about $5 per rider. (The annual budget of Rhode Island’s bus network is about $100 million and it carries about 20 million passengers per year.) Thus, the proposed system would likely have cost about $10 per rider. With a fare of $2 or $3, most of this cost would have come out of general revenue.

These calculations make clear why economists so often argue against light rail and subway construction projects. They are so expensive that ridership can only begin to cover construction and maintenance costs if the systems operate at close to their physical capacity most of the time; that is, if there are enough riders to fill up the cars when they run on two- to three-minute headways for many hours per day. Since most proposed projects do not meet this standard, economists generally argue against them. Buses can usually move the projected numbers of riders at a fraction of the cost.

My metro area of Minneapolis/St. Paul has been slowly building some light rail lines. When I drive by them, I do a mental comparison to the costs of building dedicated lanes for buses, and shudder a bit. But as Turner points out, the general pattern of urban mass transit in recent decades has tended to be away from buses and in the direction of rail.

The number of urban buses and their average age hasn't changed much in the last couple of decades. But the figure on the left shows that the number of passenger trips on urban buses has been falling, and the figure on the right shows average trips per buss have been declining for the last few years and urban buses typically run at about 20% of capacity.

The story for urban rail looks different. The size of the urban rail fleet has been rising. The left-hand figure shows the rise in trips taken by passenger rail. The right-hand side shows that average trips per rail car has been rising, but also that urban rail transit on average runs at less than 20% of capacity.

There are different ways to look at these patterns. One is to just accept that urban mass transit will typically run at 20% of capacity, which means it will run at a financial loss, and provide subsidies as needed. Another approach, which works better with buses, is to review the routes every few years, and do some combination of cutting less-used routes, boosting more-used routes, and experimenting with some altered routes. Personally, I sometimes imagine an alternative future where the money that has gone into light rail systems instead went into better bus stops, including networks networks of small bus terminals where people can easily switch between buses, as well as to subsidizing more frequent bus service, but I fear that ship has sailed in many cities.

What about the urban roads? Turner focuses on US highways, not on all roads and bridges, but offers a couple of thoughts that caught my eye. One is that the quality of urban highways--basically, the number of potholes--seems to be improving over time.

The other thought is to emphasize an old lesson about urban traffic congestion, which is that most congestion is limited to specific time windows. When new road construction untangles a "hot spot" where intertwining lanes of traffic get tangled ever day, it can be useful in reducing congestion. But in general, building more lanes for auto traffic tends to bring more people to the highways during those time windows, with little effect on congestion. It doesn't pass a cost-benefit economic sense to (say) double the number of highway lanes, but then to make full use of those lanes only a few hours a day for five days out of the week. So the question becomes how to spread out the flow of traffic over more hours. Turner writes (citations omitted)::

At its maximum capacity, an interstate highway lane can carry about 2,200 vehicles per hour. Even if we restrict attention to the period from 5:00 am to midnight, this means that each interstate ighway lane can carry about 37,000 vehicles per day. By comparison, urban interstates near the end of our sample period reach AADT [average annual daily travel] levels of about 13,000. Even this high level is less than 40 percent of the daily maximum capacity of these lanes during waking hours. ...

As severe as highway traffic congestion may be, it is not strictly a problem of highway capacity: Daily rates of travel are well below the physical capacity of the interstate. Highway congestion is a problem of having sufficient capacity at peak times. Nearly all interstate highways have surplus, unused capacity at off-peak hours. Obviously, capacity at midnight is not a perfect substitute for capacity at 6:00 p.m. However, capacity at 7:00 p.m. is not so different from capacity at 6:00 p.m., and capacity at 8:00 p.m. is not so different from capacity at 7:00 p.m. Together with the fact that travel speed on a congested highway is highly sensitive to the number of drivers using the road, this means that policies to spread travel out over the day, even slightly, can have large effects on
congestion. Thus, policies to exploit slack, off-peak capacity deserve serious attention.

One possible answer for spreading out the traffic to off-peak times is a congestion charge (discussed here and here. for example). Another might be to encourage a number of employers to vary their regular hours, sliding them forward or back in the day. Another might be to enact rules that keep most big trucks off the urban roads during the most congested crunch time.