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Mrs. Rooted is an erstwhile national champion figure skater, so of course we are quite deep into these 22nd Winter Olympic Games. After watching just about everything NBC felt like broadcasting over the past week, she posed me a very good question: are most of these athletes from just a few countries?

Indeed, if it seems to you as though a handful of countries at the intersections of Rich and Northern have provided most of the competitors at these games, you wouldn’t be wrong. Using data from Wikipedia, I mapped the origins of this year’s Olympians:

cutting costs on the flag assembly line

So if you’re watching the games and wondering why it looks like everyone is from the same few countries over and over again…you’re right!All data from the Oracle; note that due to the limitation of the shapefile I was working with, the three athletes from Tai…er, Chinese Taipei and the one from Hong Kong were combined with China’s 66, and Serbia’s 8 were combined with Montenegro’s 2. As you can see, a relatively small handful of countries are producing vast numbers of Winter Olympians while most countries produce little or none. In fact this map may even understate the lopsidedness; the top five countries by size of team – the United States, Russia, Canada, Switzerland, and Germany, respectively – comprise 35% of the entire Olympic field, and the top ten – adding Norway, Austria, Italy, Japan, and Sweden, respectively – accounts for 56% of the entire field! To put it as nerdily as possible, it’s almost a classic power-law distribution, with 20% of the countries providing 75% of the athletes.


I was listening to The Economist’s podcast summarizing their special report on Germany and and when I got to the equivalent of this line:

It is the largest creditor country in the euro zone, and as chief paymaster it has the biggest clout in determining the single currency’s future.

And I guffawed. And it’s worth explaining why.

When a creditor loans money to a debtor, there is the potential for everyone to be better off – the debtor can make an investment they could otherwise not afford, and the creditor receives some interest in return. However, there is a large potential opportunity for the debtor to rip off the creditor and never pay back their money, thus getting free money. Therefore, creditors have traditionally tried to employ both the power of the state and extra-legal threats to ensure compliance. There is a long history of violence and threats of violence in this regard, from Mafia kneebreaking on the black-market side to the Venezuelan blockade on the macro-side. The reason the Iron Bank of Braavos* gets paid back is because they have proven their willingness in the past to depose and assassinate kings to collect.

But modern norms have changed that. Sure, you can still be imprisoned for debt in certain parts of the United States, but remember that the entire state of Georgia was originally envisioned as a debtor’s colony. And on an international scale, while you will suffer for sovereign default, you won’t be invaded and expropriated, and note that countries like Argentina have done surprisingly OK after even a spectacular sovereign default. Not that being shut out of most financial markets, both as an individual and a nation, is without consequences, but it’s a lot better than being behind bars or under the gun.

What’s the point? The key is the huge power of social and cultural norms, and how many can persist even as related ones change. For example, our increased unwillingness to use violence and imprisonment to punish debtors would seem to encourage double-dealing by borrowers and recalcitrance by lenders; yet our powerful social norm in favor of paying back debts and in viewing creditors as virtuous (“savers” “investors”) and debtors, especially debtors who fail or struggle to repay, as sinners (“deadbeats” “spendthrift” “profligate”) then debtors will largely continue to pay and creditors will largely continue to lend even though debtors, not creditors, are gaining in leverage and material power. They have your money! Germany isn’t invading Greece or Italy or Spain or Portugal or Ireland! But debtors don’t have anyone’s respect and that matters tremendouslyAnd economic models (and economic commentators) fail to account for it.

*You seriously thought I was going to go all day on this blog without a reference to “A Song of Ice and Fire?” Ha! Ha, I say, ha!

Tyler Cowen continues his German sympathy tour with this little number:

You meet an employed professional with a $300,000 house, $100,000 in the bank, a nice car, a few (illiquid) Renaissance paintings, and very nice shoes. His name is Fabio.

He is $60,000 in debt, which is about equal to his yearly income. An unanticipated ARM reset requires him to pay off that debt at a faster pace than expected, which means he must restrict his consumption.

He threatens to mistreat his longstanding girlfriend Angela, unless she works harder to maintain his previous level of consumption. Angela refuses to help much, citing a false economic theory in defense of her position.

Fabio’s brother relentlessly attacks Angela’s false theory. His cousin in Naples claims that Angela is obliged to help because she has benefited from being in the relationship.

Forget, for just a minute, whether this "feels" wrong or right, or accurately analogizes the current situation in Europe. Tyler Cowen is not the German "mensch on the street!" He is the Holbert C. Harris Chair of Economics at George Mason University! He is General Director of the Mercatus Center! He has a Ph.D. from Harvard! He has written informative, challenging, and well-received books! He is a popular blogger about economics and ethnic food, and writes a column for the New York Times!

All this is to say that Tyler Cowen is an expert – the kind of person you turn to when you’re not sure if your gut instincts or folk wisdom or "common sense" are sufficient to devise a solution to a complex or esoteric problem. The kind of person who doesn’t merely relate or rephrase those kinds of objections but corrects or rebuts them when they are not guiding one towards a solution! I could get Tom Friedman or David Brooks to tell me why the Germans feel a certain way. I want to turn towards Tyler Cowen to tell me what should be done.

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