Alex Tabarrok

Copyright Protectionism

by on August 5, 2016 at 7:26 am in Economics, Law | Permalink

ChairThe argument that copyright encourages innovation is simply a pretense for protectionism. Some protection for intellectual property probably does encourage innovation, as the “Tabarrok Curve” illustrates, but the pretense becomes clear when we see copyright repeatedly extended for works already in existence. Walt Disney was long-dead when his copyright to Mickey Mouse was extended. Rumors to the contrary, Walt ain’t coming back no matter how much we incentivize him with a longer copyright.

The latest case in point is last week’s extension of copyright in the European Union for design:

Mid-century design classics, such as Charles Eames chairs, Eileen Gray tables and Arco lamps are set to rocket in price, following EU regulations which came into force this week that extend the copyright on furniture from 25 years to 70 years after the death of a designer.

…Companies can currently sell replica goods providing 25 years has passed from the date the designer died, but the EU ruling – speeded up by the British government – has extended that period to 70 years. Eames died in 1978, so the new protection extends the copyright of the many chairs, tables and clocks he designed until 2048. For items designed jointly with his wife, Ray, the copyright would extend for a further 10 years, as she died in 1988.

Dead people tend not to be very creative so I suspect that the retroactive extension of copyright will not spur much innovation from Eames. The point, of course, is not to spur creativity but to protect the rents of the handful of people whose past designs turned out to have lasting value.

Retroactive extensions of copyright throw the entire reasoning behind copyright into reverse. The incentive argument for copyright would have to run, We don’t have enough designs so we should increase the incentive to produce more. The actual argument for copyright runs–We have lots of popular designs and we need to keep selling them at a high price.

Moreover, if this nonsense were not enough, how is this for a kicker:

Companies which publish design books may have to get numerous licences to reproduce photos because designs have come under copyright.

Hat tip: The excellent Mark Thorson.

Tokyo, Japan’s capital city, has a growing population of over 13 million people but house prices have hardly increased in twenty years. Why? Tokyo has a laissez-faire approach to land use that allows lots of building subject to only a few general regulations set nationally. Robin Harding at the FT has a very important piece on the Tokyo system:

tokyoHere is a startling fact: in 2014 there were 142,417 housing starts in the city of Tokyo (population 13.3m, no empty land), more than the 83,657 housing permits issued in the state of California (population 38.7m), or the 137,010 houses started in the entire country of England (population 54.3m).

Tokyo’s steady construction is linked to a still more startling fact. In contrast to the enormous house price booms that have distorted western cities — setting young against old, redistributing wealth to the already wealthy, and denying others the chance to move to where the good jobs are — the cost of property in Japan’s capital has hardly budged.

This is not the result of a falling population. Japan has experienced the same “return to the city” wave as other nations.

How is this possible? First Japan has a history of strong property rights in land:

Subject to the zoning rules, the rights of landowners are strong. In fact, Japan’s constitution declares that “the right to own or to hold property is inviolable”. A private developer cannot make you sell land; a local government cannot stop you using it. If you want to build a mock-Gothic castle faced in pink seashells, that is your business.

But this alone cannot explain everything because there was a huge property price-boom in Japan circa 1986 to 1991. In fact, it was in dealing with the collapse of that boom that Japan cleaned up its system, reducing regulation and speeding the permit approval process.

tokyo-japan

…in the 1990s, the government relaxed development rules, culminating in the Urban Renaissance Law of 2002, which made it easier to rezone land. Office sites were repurposed for new housing. “To help the economy recover from the bubble, the country eased regulation on urban development,” says Ichikawa. “If it hadn’t been for the bubble, Tokyo would be in the same situation as London or San Francisco.”

Hallways and public areas were excluded from the calculated size of apartment buildings, letting them grow much higher within existing zoning, while a proposal now under debate would allow owners to rebuild bigger if they knock down blocks built to old earthquake standards.

Rising housing prices are not an inevitable consequence of growth and fixed land supply–high and rising housing prices are the result of policy choices to restrict land development.

The policy choices were made–they can be unmade.

A Skeptical View of the NSF

by on August 3, 2016 at 7:25 am in Economics | Permalink

Tyler and I have a piece in the latest Journal of Economic Perspectives, A Skeptical View of the NSF’s Role in Economic Research. Here is one bit:

In considering the case for grant-based funding of economics research by the National Science Foundation, we find that a number of pertinent questions are rarely asked, let alone clearly answered. Instead, economists often put forward relatively weak arguments that they would likely dismiss if applied to government subsidies not reserved for economists.

For example, one common approach to defending NSF grants for economists is to list the prestigious individuals with whom the program has been associated. In his paper in this journal, Moffitt notes: “The program has supported every Nobel Prize winner in Economics since 1998 and almost every John Bates Clark medal winner since 1961.” (NSF economics funding started in 1960). Indeed, the list of grant recipients from NSF Economics is a literal “Who’s Who” of the top economists over the last half-century. But we don’t find the prestige of NSF recipients to be a good substitute for an estimate of the public benefits of research. Imagine a group of chefs who defended a hypothetical “National Food Foundation” on the grounds that it had provided grants to Alice Waters, Thomas Keller, Grant Achatz, and every winner of a James Beard Award since 1990. If these names are not familiar, rest assured that their published research output and training of students is very impressive. While we would not consider this information irrelevant (better to fund good chefs than bad ones), as economists we would be unimpressed by this case for government funding of chefs. Talk of how these grants brought about innovations in the culinary arts—such as sous vide, molecular gastronomy, and the introduction of quinoa to the American diet—would also not swing the argument. Instead, as economists, we would focus on how food markets would have operated without such grants and what else might have been done with the money.

We are not against any role for the NSF, however, but instead suggest that funds would be better spent on replication, public-use datasets and “far-out”, high-risk research. We also suggest other funding mechanisms such as prizes.

Here is one bit on replication:

Instead of pointing to the prestigious economists whose research they have funded, perhaps the NSF might point to the prestigious research that has been convincingly replicated—or not replicated.

Read the whole thing.

By the way, this entire issue of the JEP is excellent with important reviews of the research on charter schools and four papers on motivated reasoning.

Demographics and Growth

by on August 2, 2016 at 7:22 am in Economics | Permalink

Why is growth so slow? Tim Lee has a good run down of eight theories including one suggested by myself, demographics:

Americans are having fewer babies than they did in the past, and this has had two related effects: The population as a whole is growing more slowly, and the average age of the population is rising.

There’s reason to think that both trends are bad for economic growth. Younger people are more likely to pursue new ideas, take risks, and start new businesses. So an aging population is likely to lead to a less dynamic economy.

Slower population growth can also be a source of economic stagnation in its own right. A rapidly growing population means rising demand for products of all kinds — new homes, restaurants, shopping malls, and so forth. So more businesses will be started in general, which means more opportunities for experimentation. Successful stores, restaurants, and other businesses can be expanded or franchised to other metropolitan areas, allowing good ideas to spread quickly.

In contrast, in a country with a more stagnant population, starting a new business requires replacing an existing business. Even if a young person has an innovative idea for a new company, the practical difficulties of getting the business started might be too great for putting the idea into practice. And so change can only happen by convincing existing business owners to change their behavior — an inherently slower and more difficult process.

A just-released NBER working paper by Nicole Maestas, Kathleen J. Mullen and David Powell provides some new evidence for this hypothesis by looking at the US states:

Population aging is widely assumed to have detrimental effects on economic growth yet there is little empirical evidence about the magnitude of its effects. This paper starts from the observation that many U.S. states have already experienced substantial growth in the size of their older population and much of this growth was predetermined by historical trends in fertility. We use predicted variation in the rate of population aging across U.S. states over the period 1980-2010 to estimate the economic impact of aging on state output per capita. We find that a 10% increase in the fraction of the population ages 60+ decreases the growth rate of GDP per capita by 5.5%. Two-thirds of the reduction is due to slower growth in the labor productivity of workers across the age distribution, while one-third arises from slower labor force growth. Our results imply annual GDP growth will slow by 1.2 percentage points this decade and 0.6 percentage points next decade due to population aging.

The first home pregnancy tests were controversial because it was believed that women could not be trusted to do the tests correctly or to use the results appropriately:

NYTimes: When a mail-order New York firm tried to sell Organon test kits to American consumers in 1971, it faced opposition from the United States Public Health Service. In 1973, a New Jersey drugstore bought kits made by the drug company Roche and offered fast and private tests to their customers, and though the technology was similar to that available in medical clinics, the state medical examiner questioned the legality of the service.

Why so much opposition? Some regulators worried that “frightened 13-year-olds” would be the main users of the test kits. But after the product did become available in the United States in 1977, it appealed instead to college-age and married women — many of whom desperately hoped for children.

Even so, the Texas Medical Association warned that women who used a home test might neglect prenatal care. An article in this newspaper in 1978 quoted a doctor who said customers “have a hard time following even relatively simple instructions,” and questioned their ability to accurately administer home tests. The next year, an article in The Indiana Evening Gazette in Pennsylvania made almost the same claim: Women use the products “in a state of emotional anxiety” that prevents them from following “the simplest instructions.”

The tale of the home pregnancy test is not unique. Breakthroughs that give patients control over their bodies are often resisted. Again and again, the same questions come up: Are patients smart enough? Can they handle bad news? And do they have the right to private information about their bodies?

I wrote about these issues in Our DNA, Our Selves which discussed the FDA’s unconstitutional over-regulation of DNA tests. The legal questions in that case are yet to be fully resolved but the technology is pushing towards the freedom to know our own bodies.

From Frank Dikötter’s short note at History Today:

In the People’s Republic of China, archives do not belong to the people, they belong to the Communist Party. They are often housed in a special building on the local party committee premises, which are generally set among lush and lovingly manicured grounds guarded by military personnel. Access would have been unthinkable until a decade or so ago, but over the past few years a quiet revolution has been taking place, as increasing quantities of documents older than 30 years have become available for consultation to professional historians armed with a letter of recommendation. The extent and quality of the material varies from place to place, but there is enough to transform our understanding of the Maoist era.

mao-communist

…What comes out of this massive and detailed dossier is a tale of horror in which Mao emerges as one of the greatest mass murderers in history, responsible for the deaths of at least 45 million people between 1958 and 1962. It is not merely the extent of the catastrophe that dwarfs earlier estimates, but also the manner in which many people died: between two and three million victims were tortured to death or summarily killed, often for the slightest infraction. When a boy stole a handful of grain in a Hunan village, local boss Xiong Dechang forced his father to bury him alive. The father died of grief a few days later. The case of Wang Ziyou was reported to the central leadership: one of his ears was chopped off, his legs were tied with iron wire, a ten kilogram stone was dropped on his back and then he was branded with a sizzling tool – punishment for digging up a potato.

…Fresh evidence is also being unearthed on the land reform that transformed the countryside in the early 1950s. In many villages there were no ‘landlords’ set against ‘poor peasants’ but, rather, closely knit communities that jealously protected their land from the prying eyes of outsiders – the state in particular. By implicating everybody in ‘accusation meetings’ – during which village leaders were humiliated, tortured and executed while their land and other assets were redistributed to party activists recruited from local thugs and paupers – the communists turned the power structure upside down. Liu Shaoqi, the party’s second-in-command, had a hard time reining in the violence, as a missive from the Hebei archives shows: ‘When it comes to the ways in which people are killed, some are buried alive, some are executed, some are cut to pieces, and among those who are strangled or mangled to death, some of the bodies are hung from trees or doors.’

Here’s Four Reasons Financial Intermediaries Fail the latest video from our Principles of Macroeconomics class at Marginal Revolution University.

As always, these videos go great with our superb textbook, Modern Principles of Economics, but they can be used with any textbook. In fact, if you teach economics and want to incorporate video into any of your classes then check out our syllabus service. Just drop our instructional designer, Mary Clare Peate, an email and she will suggest some videos that map directly to your syllabus.

Land use regulations raise prices, reduce mobility and increase income inequality in the United States. In many parts of the developing world, however, the situation is worse, much worse.

In an excellent piece Shanu Athiparambath writes:

Land is not scarce in Delhi, as I learned in one of those days, when a friend drove me around the city. There is enough land for everybody to live in a mansion. Delhi has nearly 20,000 parks and gardens. Large tracts of land remain idle or underutilized, either because the government owns it, or because property titles are weak. Politicians and senior bureaucrats live in mansions with vast, manicured lawns in the core of the city. Some of these political eminentoes farm on valuable urban land while firms and households move to the periphery or satellite cities where real estate prices are lower. So the average commute is long, roads are too congested, and Delhi is one of the most polluted cities in the world.

Zoning regulations inflict great harm. But it is difficult for Americans to imagine the cost of zoning in Indian cities. Delhi is one of the most crowded cities in the world, and there is great demand for floor space. But real estate developers are not allowed to build tall buildings. In Delhi, for apartment buildings, the regulated Floor Area Ratio (FAR) is usually 2. FAR, an urban planning concept, is the ratio of built-out floor space to the area of the plot.

This means, in Delhi, developers are not allowed to build more than 2,000 square feet of floor space on a 1,000 square feet plot. If a building stands on the whole plot, this would be a two-storey building.

To understand the harm this inflicts on the world’s second-most populous city, remember that in Midtown Manhattan, FAR can go up to 15. In Los Angeles, it can get as high as 13, and in Chicago, up to 12. In Hong Kong’s downtown, the highest FAR is 12, in Bahrain it is 17, and in Singapore it can get as high as 25. Not surprisingly, office space in Delhi’s downtown is among the most expensive in the world. It is impossible to profitably redevelop these crumbling buildings in Delhi’s downtown because they are under rent control.

You might expect the capital city to be especially restrictive, just as is Washington, DC, but in Mumbai, the densest major city in the world, the downtown FAR is an absurdly low 1.33.

Think about it like this: A FAR is like a tax on manufacturing land. Why would you impose prohibitive taxes in places where land is most desperately needed?

Metro Station Smoke

WTOP: A Metro worker blamed for falsifying records about the tunnel fans that failed during last year’s deadly smoke incident near L’Enfant Plaza has been granted his job back by an arbitration panel — and Metro’s largest union has just filed a lawsuit against Metro because the worker hasn’t been reinstated yet.

The union’s defense is that everyone was doing it so no one is to blame. The Union is probably right that the WMTA suffers from a culture of poor safety and responsibility but you can’t fix that culture without clear signals that the incentives have changed.

I had to take the Metro to DC earlier this week and due to track closings for safety improvements it was miserable, at least 45 minutes of delays for the roundtrip. Some 700,000 people ride the metro every day and if each is delayed by just 15 minutes total (7.5 minutes each way) then at $15 an hour that’s 2.6 million dollars worth of delay every day.

Results Free Review

by on July 20, 2016 at 7:28 am in Economics, Education | Permalink

If researchers test a hundred hypotheses, 5% will come up “statistically significant” even when the true effect in every case is zero. Unfortunately, the 5% of papers with statistically signficant results are more likely to be published, especially as these results may seem novel, surprising or unexpected–this is the problem of publication bias.

A potentially simple and yet powerful way to mitigate publication bias is for journals to commit to publish manuscripts without any knowledge of the actual findings. Authors might submit sophisticated research designs that serve as a registration of what they intend to do. Or they might submit already completed studies for which any mention of results is expunged from the submitted manuscript. Reviewers would carefully analyze the theory and research design of the article. If they found that the theoretical contribution was justifiably large and the design an appropriate test of the theoretical logic, then reviewers could recommend publication regardless of the final outcome of the research.

In a new paper (from which the above is quoted) the editors of a special issue of Comparative Political Studies report on an experiment using results-free review. Results-free review worked well. The referees spent a lot of time and effort thinking about theory and research design and the type of institutional and area-specific knowledge that would be necessary to make the results compelling. The quality of the submitted papers was high.

What the editors found, however, was that the demand for “significant” results was very strong and difficult to shake.

It seems especially difficult for referees and authors alike to accept that null findings might mean that a theory has been proved to be unhelpful for explaining some phenomenon, as opposed to being the result of mechanical problems with how the hypothesis was tested (low power, poor measures, etc.). Making this distinction, of course, is exactly the main benefit of results free peer review. Perhaps the single most compelling argument in favor of results-free peer review is that it allows for findings of non-relationships. Yet, our reviewers pushed back against making such calls. They appeared reluctant to endorse manuscripts in which null findings were possible, or if so, to interpret those null results as evidence against the existence of a hypothesized relationship. For some reviewers, this was a source of some consternation: Reviewing manuscripts without results made them aware of how they were making decisions based on the strength of findings, and also how much easier it was to feel “excited” by strong findings This question even led to debate among the special issue editors on what are the standards for publishing a null finding?

I’ve seen this aversion to null results. In my paper with Goldschlag on regulation and dynamism, we find that regulation does not much influence standard measures of dynamism. It’s been very hard for reviewers to accept this result and I don’t think it’s simply because some referees believe strongly that regulation reduces dynamism. I think referees would be more likely to accept the exact same paper if the results were either negative or positive. That’s unscientific–indeed, we should expect that most results are null results so this should give us, if anything, even more confidence in the paper!–but as the above indicates, it’s a very common reaction that null results indicate something is amiss.

Here, by the way, are the three papers reviewed before the results were tabulated. I suspect that some of these papers would not have been accepted at this journal under a standard refereeing system but that all of these papers are of above average quality.

The Effects of Authoritarian Iconography: An Experimental Test finds “no meaningful evidence that authoritarian iconography increases political compliance or support for the Emirati regime.”

Can Politicians Police Themselves? “Taking advantage of a randomized natural experiment embedded in Brazil’s State Audit Courts, we study how variation in the appointment mechanisms for choosing auditors affects political accountability. We show that auditors appointed under few constraints by elected officials punish lawbreaking politicians—particularly co-partisans—at lower rates than bureaucrats insulated from political influence. In addition, we find that even when executives are heavily constrained in their appointment of auditors by meritocratic and professional requirements, auditors still exhibit a pro-politician bias in decision making. Our results suggest that removing bias requires a level of insulation from politics rare among institutions of horizontal accountability.”

Banners, Barricades, and Bombs tests “competing theories about how we should expect the use of tactics with varying degrees of extremeness—including demonstrations, occupations, and bombings—to influence public opinion. We find that respondents are less likely to think the government should negotiate with organizations that use the tactic of bombing when compared with demonstrations or occupations. However, depending on the outcome variable and baseline category used in the analysis, we find mixed support for whether respondents think organizations that use bombings should receive less once negotiations begin. The results of this article are generally consistent with the theoretical and policy-based arguments centering around how governments should not negotiate with organizations that engage in violent activity commonly associated with terrorist organizations.”

Addendum: See also Robin Hanson’s earlier post on conclusion free review.

The FDA versus the Tooth

by on July 15, 2016 at 7:20 am in Economics, Law, Medicine | Permalink

The NYTimes has an incredible story on a simple, paint-on liquid that stops tooth decay and prevents further cavities:

Nobody looks forward to having a cavity drilled and filled by a dentist. Now there’s an alternative: an antimicrobial liquid that can be brushed on cavities to stop tooth decay — painlessly.

The liquid is called silver diamine fluoride, or S.D.F. It’s been used for decades in Japan, but it’s been available in the United States, under the brand name Advantage Arrest, for just about a year.

The Food and Drug Administration cleared silver diamine fluoride for use as a tooth desensitizer for adults 21 and older. But studies show it can halt the progression of cavities and prevent them, and dentists are increasingly using it off-label for those purposes.

Ari Armstrong has the right reaction:

So the Japanese have been using this drill-free treatment for “decades,” yet we in the United States have had to wait until last year to get it. And the only reason we can get it now to treat cavities is that it happens to be allowed as on “off-label” use for what the FDA officially approved it for.

The NYTimes continues:

Silver diamine fluoride is already used in hundreds of dental offices. Medicaid patients in Oregon are receiving the treatment, and at least 18 dental schools have started teaching the next generation of pediatric dentists how to use it.

…The main downside is aesthetic: Silver diamine fluoride blackens the brownish decay on a tooth. That may not matter on a back molar or a baby tooth that will fall out, but some patients are likely to be deterred by the prospect of a dark spot on a visible tooth.

…[But] “S.D.F. reduces the incidence of new caries and progression of current caries by about 80 percent,” said Dr. Niederman, who is updating an evidence review of silver diamine fluoride published in 2009.

Fillings, by contrast, do not cure an oral infection.

But as Armstrong writes the craziest part of the story is this:

American dentists first started using similar silver-based treatments in the early 1900s. The FDA is literally over a century behind the times.

It seems that the future of dental treatment has been here all along but a combination of dentists wanting to be surgeons, lost knowledge, and FDA cost and delay prevented it from being distributed. Incredible.

Kidney Gift Vouchers

by on July 13, 2016 at 9:20 am in Economics, Medicine | Permalink

I am not expecting a market in kidneys anytime soon but ever more sophisticated barter is slowly improving kidney allocation. Most recently, UCLA has started a program where a kidney donation may be swapped for a kidney gift certificate good for a kidney transplant at a time of the recipient’s choosing.

The program allows for living donors to donate a kidney in advance of when a friend or family member might require a kidney transplant.

…“It’s the brainchild of a grandfather who wanted to donate a kidney to his grandson nearing dialysis dependency, but the grandfather felt he would be too old to donate in a few years when his grandson would likely need a transplant.”

Nine other transplant centers across the U.S. have agreed to offer the gift certificate program, under the umbrella of the National Kidney Registry’s advanced donation program. Veale anticipates that more living donors will come forward to donate kidneys, which could trigger chains of transplants. Then, when a patient redeems his or her gift certificate, the last donor in the chain could donate a kidney to that recipient.

Improving allocation is important but the real constraint today is supply. This program may help with that on the margin, however, because altruistic donors could donate and keep a gift certificate as insurance in case any of their family members one day needed an transplant. More fundamentally, however, increasing supply will require some form of compensation or incentive such as no-give, no-take.

It’s well known that among college and university faculty, liberals outnumber conservatives. Sam Abrams at Heterodox Academy presents some typical data:

The liberal-conservative ratio among faculty was roughly 2 to 1 in 1995. By 2004 that figure jumped to almost 3 to 1. While seemingly insignificant, that represents a 50% decline in conservative identifiers on campuses. After 2004, the ratio changed even more dramatically and by 2010, was close to 5 to 1 nationally. This shows that political diversity declined rapidly in our nation’s centers for learning and social change.

What’s more surprising is how extreme the difference is in one part of the country: New England. For college and university faculty in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont – the liberal to conservative ratio is above 25 to 1!

In the figure below the liberal to conservative ratio is graphed for faculty in New England and in the rest of the country. The green line at the bottom graphs the ratio in the population at large. Universities everywhere are not as balanced as the general population but New England is like another country.

Abrams-Fig-3
Do conservative professors face discrimination? Defenders of the universities have argued, sometimes quite cogently (but compare), that professors tend to be more liberal than the general population not because of discrimination but because of factors like education, income, or social class. The universities can hardly be blamed if the people who want to become professors tend to be liberal! But large geographic differences in the ratio of liberals to conservatives suggests that this may not be the full story. Somehow I suspect that conservatives professors would be quite happy to live and work in New England should they be offered jobs in that part of the country.

Very few people imagined that self-driving cars would advance so quickly or be deployed so rapidly. As a result, robot cars are largely unregulated. There is no government testing regime or pre-certification for robot cars, for example. Indeed, most states don’t even require a human driver because no one imagined that there was an alternative. Many people, however, are beginning to question laissez-faire in light of the first fatality involving a partially-autonomous car that occurred in May and became public last week. That would be a mistake. The normal system of laissez-faire is working well for robot cars.

Laissez-faire for new technologies is the norm. In the automotive world, for example, new technologies have been deployed on cars for over a hundred years without pre-certification including seatbelts, air bags, crumple zones, abs braking systems, adaptive cruise control and lane departure and collision warning systems. Some of these technologies are now regulated but regulation came after these technologies were developed and became common. Airbags began to be deployed in the 1970s, for example when they were not as safe as they are today but airbags improved over time and by the 1990s were fairly common. It was only in 1998, long after they were an option and the design had stabilized, that the Federal government required airbags in all new cars.

Lane departure and collision warning systems, among other technologies, remain largely unregulated by the Federal government today. All technologies, however, are regulated by the ordinary rules of tort (part of the laissez-faire system). The tort system is imperfect but it works tolerably well especially when it focuses on contract and disclosure. Market regulation also occurs through the insurance companies. Will insurance companies given a discount for self-driving cars? Will they charge more? Forbid the use of self-driving cars? Let the system evolve an answer.

Had burdensome regulations been imposed on airbags in the 1970s the technology would have been delayed and the net result could well have been more injury and death. We have ignored important tradeoffs in drug regulation to our detriment. Let’s avoid these errors in the regulation of other technologies.

The fatality in May was a tragedy but so were the approximately 35,000 other traffic fatalities that occurred last year without a robot at the wheel. At present, these technologies appear to be increasing safety but even more importantly what I have called the glide path of the technology looks very good. Investment is flowing into this field and we don’t want to forestall improvements by raising costs now or imposing technological “fixes” which could well be obsolete in a few years.

Laissez-faire is working well for robot cars. Let’s avoid over-regulation today so that in a dozen years we can argue about whether all cars should be required to be robot cars.

My thoughts on Independence Day are more muted this year than they have been in the past. In the first half of my life I saw the Berlin Wall fall and I watched as democracy, trade, and greater freedom spread around the world. There was still plenty wrong, of course, especially for a libertarian, but the world was on an upswing and it seemed like the ideas that led to the economic, political and social destruction of the first half of the twentieth century were in decline. Now, following the second Great Depression, illiberalism is on the rise much as it rose following the first Great Depression. All could yet turn out well but there is no denying that the world is no longer on an upswing.

In Freedom in the World: 2016, Freedom House reports:

The world was battered by crises that fueled xenophobic sentiment in democratic countries, undermined the economies of states dependent on the sale of natural resources, and led authoritarian regimes to crack down harder on dissent….

  • The number of countries showing a decline in freedom for the year—72—was the largest since the 10-year slide began. Just 43 countries made gains.
  • Over the past 10 years, 105 countries have seen a net decline, and only 61 have experienced a net improvement.
  • Ratings for the Middle East and North Africa region were the worst in the world in 2015, followed closely by Eurasia.
  • Over the last decade, the most significant global reversals have been in freedom of expression and the rule of law.

Freedom in the World has now declined for the 10th year in a row.