Food and Drink

Another sign on the door says that a new restaurant will be replacing Charlie Chiang’s and will be “opening soon.”

The new restaurant will be called Amannisahan and will serve Uyghur cuisine, according to the sign. In an indication that a quick reopening may indeed be in the works, Amannisahan says it’s currently hiring restaurant managers and waiters.

Take that Bryan Caplan!  And that’s for Crystal City, VA, by the way here is the Jorma Kaukonen song.

For the pointer I thank Michael Makowsky.

The Maple Syrup Cartel

by on August 23, 2015 at 7:29 am in Economics, Food and Drink | Permalink

Quebec produces more than 70 percent of the world’s maple syrup and the Federation of Quebec Maple Syrup Producers is a cartel every bit as rapacious as OPEC or De Beers. The Federation is government backed and all producers must sell to them. From an excellent piece in the NYTimes:

maple-syrupAfter the spring harvest, farmers from around the province send their syrup to the federation.

…To keep prices high, the federation enforces strict quotas for the province’s 7,400 producers. Instead of flooding the market during years with bumper crops, all syrup produced beyond that amount is stored in the federation’s warehouse, which helps prop up prices by limiting supply. When seasons are lean, it releases the syrup, to maintain stable supply and pricing.

…When the federation suspects farmers are producing and selling outside the system, it posts guards on their properties. It seeks fines from producers and buyers who do not follow the rule. In the most extreme situations, it seizes production.

Addendum: The NYTimes video about rebel maple syrup producers is excellent.

Food has replaced music at the heart of the cultural conversation for so many, and I wonder if it’s because food and dining still offer true scarcity whereas music is so freely available everywhere that it’s become a poor signaling mechanism for status and taste. If you’ve eaten at Noma, you’ve had an experience a very tiny fraction of the world will be lucky enough to experience, whereas if you name any musical artist, I can likely find their music and be listening to it within a few mouse clicks. Legally, too, which removes even more of the caché that came with illicit downloading, the thrill of being a digital bootlegger.

Once, it felt like watching music videos on MTV was a form of rebellion in plain sight. Nowadays, the channel doesn’t play any music videos. Instead, we have dozens of food and cooking shows, even entire channels like The Food Network dedicated to the topic. Chefs have become elevated to the status of master craftsmen, with names that have risen above the status of their restaurants, and diners revere someone like Jiro of Jiro Dreams of Sushi fame the way a previous generation worshipped the guitar sound of a rock god like Jimi Hendrix.

The food scene today offers a seemingly never-ending supply of scarce experiences, ingredients, and dishes. Cronuts you have to wait in line for a few hours to get your hands on. Pop-up restaurants that serve only on a few nights a week for a few weeks, then disappear forever. Restaurants that you have to sacrifice a goat to just to get a reservation, and then they’ll actually take that goat you killed and prepare your entire dinner from it, nose to tail. A white truffle add-on that tacks $80 on to a single piece of cured hamachi, and oh, the truffle is only available for four weeks a year and came over on a gondola from Alba, Italy, and the hamachi is one of the last of three members of its species so you know, you should probably try it before…oops, sorry, the chef says someone just ordered the last of it. Yep, it’s that couple at the corner table, and that’s the last plate that she’s Instagramming right now.

That is from Eugene Wei, with more of interest at the link, via Graham Rowe.

That is today’s FT “Lunch with” piece, by John Thornhill, and of course she is an economist at Sussex.  I hope the article is not too gated for you.  Here is one bit:

As professor in the Economics of Innovation at Sussex University, Mazzucato is much in demand on the international lecture circuit for her iconoclastic views about how wealth is generated and the public sector’s vital role in promoting innovation. She is as forthright in her opinions as she is eloquent in expressing them.

She also has four children and I can testify she is what they call “a commanding presence.”  In Singapore not long ago I told her she should have her own TV show, and I would not be surprised if this someday came to pass.  Here is more:

Even Silicon Valley’s much-fabled tech entrepreneurs are not as smart as they like to think. Although Mazzucato lavishes praise on the entrepreneurial genius of the likes of Steve Jobs and Elon Musk, she says their brilliance tells only part of the story. Many of the key technologies used by Apple were first developed by public-sector agencies. Most of the key technologies that do the clever stuff inside your iPhone — including its geo-positioning system, the Siri voice-recognition service and multi-touch screen — were the offspring of state-funded research. “Government has invested in basic research, it has invested in applied research, it has invested in concrete companies [such as Tesla] all the way downstream, doing what venture capital should be doing if it was really playing the role it says it plays,” she says. “It is an incredibly active, mission-oriented role.”

In my view she overstates what are essentially some worthwhile points.  For more you can read her book The Entrepreneurial State.  Here is her home page.  Here is her Wikipedia page.  Here is her TED talk.  She is here on Twitter.

From the interview, I enjoyed this line:

I walk in as an economist and I walk out as a life coach…

She ordered the soup and the duck.

No, it is not knowledge of the city’s best dish, nor is it access to all the Yelp reviews, or even an understanding of how the spices in that cuisine work together.

I have a simple nomination.  If you could only know one thing about a city, you would like to know what time the best and most popular restaurants fill up.

If you know that time, you can walk around a restaurant-rich area.  Wait for the best places to start filling up, and then make your move and muscle your way through the door.  Voila, the wisdom of crowds!

If you come too early, you cannot glean information from watching the customer flow because there isn’t any.  If you come too late, the best places are already full, or they have lines which are too long.  But if you are there at just the right time, and attentive to the movement of the crowds, what really can go wrong?

In Singapore the best time to start stalking the hawker centres is about 10:30 a.m., certainly no later than 11.  Otherwise the lines at the best stalls are simply too long.  Just show up at the right time, and assume the Singaporeans know what they are doing.  It works.  In Paris you must be looking for a good lunch restaurant before 12:30.

It is a common theme in food economics that knowledge of people, or knowledge of social mechanisms, is often more valuable than knowledge of food.  Knowing whom to ask and also how to ask is also often more valuable than a detailed knowledge of a cuisine per se.

Belgrade notes

by on August 9, 2015 at 1:20 am in Food and Drink, History, Travel | Permalink

Belgrade

Upon arrival, the taxi driver was a lumbering hulk with a huge back, but his cab radio spewed out Engelbert Humperdinck songs.

Communism as an economic system is gone, and the government is democratic, but still the place seems to have the character types and status markers of a communist society.

Neither Americanization nor Europeanization seems to have progressed very far here; with respect to the latter category, I think of Belgrade as the anti-Barcelona.  Nothing here is very attractive, yet in a quite charming way.  The place conjures up, still, some of the better sides of 1920s Europe and also 1980s communism.  That said, infrastructure and services are quite acceptable.  Prices are reasonable.

The food is good but not so varied or original and it seems like a waste of time to look for true peaks.  There are no noteworthy or signature sights.  Museums still refer to “the former Republic of Yugoslavia” and the Serbs seem to be searching for a new identity.  There is lots of talk about the past.  The country is stuck in the middle income trap.

I recommend this place for all those who feel they are sick of Europe, but actually are not, but who would be, unless they came here.  That includes me.

Split, Croatia bleg

by on July 30, 2015 at 2:02 am in Food and Drink, Travel, Travels | Permalink

What to do?  What to see and where to eat?  Our stay there will be brief, but thanks in advance for your assistance…

Does Fair Trade help poor workers? Probably not says Don Boudreaux in this excellent, short video from the Everyday Economics series at Marginal Revolution University.

As is well known, however, Don is a rabid, free-market economist with ideological blinders who has been captured by corporate interests. So let’s ignore what Don says and consider what William MacAskill, author of Doing Good Better (reviewed earlier this week) has to say. No one can fault MacAskill’s charitable bona-fides:

MacAskill’s own pledge is to donate everything he earns above about $35,000 per year, adjusted using standard economic measures for inflation and cost of living, to the organizations that he believes will do the most good. Since his bar is roughly at the UK median income—such that half the population earns more each year, and half the population earns less—he’s certainly not condemning himself to a life of hardship; rather, he is pre-committing to staying roughly in the middle of the national income distribution even as his earnings go up over time.

That said, his pledge means giving away 60 percent of his expected lifetime earnings.

When I ask him the inevitable questions about whether this isn’t rather a lot to sacrifice for one person, MacAskill shrugs modestly and smiles broadly. “Imagine you’re walking down the street and see a building on fire,” he says. “You run in, kick the door down—smoke billowing—you run in and save a young child. That would be a pretty amazing day in your life: That’s a day that would stay with you forever. Who wouldn’t want to have that experience? But the most effective charities can save a life for $4,000, so many of us are lucky enough that we can save a life every year through our donations. When you’re able to achieve so much at such low cost to yourself…why wouldn’t you do that? The only reason not to is that you’re stuck in the status quo, where giving away so much of your income seems a little bit odd.”

So what are MacAskill’s views on Fair Trade? Why they are the same as Don’s!

…when you buy fair-trade, you usually aren’t giving money to the poorest people in the world. Fairtrade standards are difficult to meet, which means that those in the poorest countries typically can’t afford to get Fairtrade certification. For example, the majority of fair-trade coffee production comes from comparatively rich countries like Mexico and Costa Rica, which are ten times richer than the very poorest countries like Ethiopia.

….In buying Fairtrade products, you’re at best giving very small amounts of money to people in comparatively well-off countries. You’d do considerably more good by buying cheaper goods and donating the money you save to one of the most cost-effective charities…

The Happy Meal Fallacy

by on July 20, 2015 at 7:25 am in Economics, Food and Drink, Law | Permalink

Some restaurants offer burgers without fries and a drink. These restaurants cater to low-income people who enjoy fries and drinks but can’t always afford them. To rectify this sad situation a presidential candidate proposes The Happy Meal Act. Under the Act, burgers must be sold with fries and a drink. “Burgers by themselves are not a complete, nutritious meal,” the politician argues, concluding with the uplifting campaign slogan, “Everyone deserves a Happy Meal!”

happy-mealBut will the Happy Meal Act make people happy? If burgers must come with fries and a drink, restaurants will increase the price of a “burger.” Even though everyone likes fries and a drink they may not like the added benefits by as much as the increase in the price of the meal. Indeed, this must the case since consumers could have bought the meal before the Act but chose not to. Requiring firms to sell benefits that customers value less than their cost makes both firms and customers worse off.

The Happy Meal Fallacy is fairly obvious when it comes to happy meals but now let’s consider the debate over the gig economy and the hiring of employees versus contractors. Employees are entitled to benefits that contractors are not. Thus the standard conclusion is that classifying workers as contractors “is great for employers but potentially terrible for workers.” Wrong. Employees get their wages with fries and a drink while contractors get wages only. Would a law requiring firms to provide all workers with fries and a drink help workers?

If firms are required to provide benefits to contractors they will lower the contractor wage. But how do we know the extra benefits aren’t worth the reduction in wages? If the extra benefits were worth more to workers than they cost firms, firms would have eagerly provided these benefits as a way of increasing profits. Firms can profit whenever buyers are willing to pay more for a product than its cost. Benefits are a product that workers buy from firms.

Workers buy benefits from firms by offering to work at a lower wage. Firms are happy to sell benefits when workers will accept a wage reduction that covers the cost of the benefit. Thus, if workers value a benefit by more than its cost, there is a mutually profitable deal to be made. The firm will provide the benefit and wages will fall by more than the cost but by less than the value of the benefit. Both firms and workers will be better off. It’s implausible that firms and workers will overlook mutually profitable exchanges. Thus requiring firms to provide benefits with every job means requiring firms to sell benefits that workers value less than their cost and that makes both firms and workers worse off–just like requiring restaurants to sell burgers with fries and a drink makes firms and customers worse off.

If the cost of the benefits far exceed their value to workers, the firm will close. But even if the firm doesn’t close, firms and workers will both be worse off. The exact division of the burden will vary depending on particulars but the workers who value wages the highest and benefits the least will be the most burdened. Often these will be the lowest income workers.

The Happy Meal Fallacy can lead to very unhappy firms and workers.

Addendum: The theory of compensating differences in wages with benefits was pioneered by Adam Smith. See Matt Kahn for a short overview and Sherwin Rosen for a full treatment of the theory. Jonathan Gruber and Craig Olson offer empirical evidence. The MRU video, The Tradeoff Between Fun and Wages presents another application.

It is common for left-wing progressives to complain that conservatives serve up unflattering accounts of the unemployed and poor, such as by calling them “moochers” and the like.

But many versions of the standard Keynesian account, once we deconstruct them a bit, don’t paint such a flattering picture of the unemployed either.  In one Keynesian scenario, many of the unemployed have lacked jobs for years because they have sticky nominal wage demands.  Under one scenario, they could find jobs for $x an hour but won’t take the work.  If government policy could reflate the economy enough, those jobs in nominal terms would offer more and the unemployed would be in essence fooled into taking the offer.  The job would be paying the same in real terms, so the ex ante stubbornness is a big mistake, at least under this account of the matter.

Such a mistake is made throughout years of material suffering and psychological deprivation, including serious problems for one’s children.  Yet a mere nominal trick, by boosting pride just a bit, will move them back into a job.

It is of course a well-known stylized fact that, at least in America, unemployment rates for the poor and undereducated are much higher than for wealthier or better educated people.  So a general citation of “money illusion” won’t rescue the victims from the rather unflattering Keynesian portrait painted here.

Alternatively, the relevant mechanism may operate through the demand for labor, rather than the supply.  Perhaps low-skilled workers cannot be employed at lower wages because their resentment at the low wage would be so high that they would impose unacceptable morale costs on the organizations employing them.  In other words, insult them with a sub-par wage offer and they turn destructive toward the entire organization.  Companies of course prefer to keep these workers at arms’ length under this hypothesis.

If Charles Murray had come up with that hypothesis, he would have been savagely attacked for it.  Yet there is growing evidence, for instance from the work of Alan Blinder, that it is a major cause of wage stickiness.

Left-wing Keynesians are reluctant to acknowledge their own implicit unflattering treatment of the poor, which I should add came (in part) from snobby and elite British economists, including Keynes.  Often microfoundations are considered an embarrassing topic, and the emphasis is on “well, we know that wages are sticky,” with a desire not to look too closely under the hood, or to consider how those stories jive with other deeply held views, many of which try to raise the relative status of the poor and unemployed.

Bryan Caplan is consistent and is also happy to satisfy the publicity condition.  He believes in nominal stickiness as a driver of unemployment (under many circumstances) and he holds a relatively skeptical view of the decision-making capabilities of many (by no means all) of the poor.

The most flattering macro theories toward the poor, undereducated, and unemployed are the complementarity, increasing returns, and RBC “the poor are maximizing given some bad constraints” approaches.  Insider-Outsider models make the unemployed victims of exclusion who don’t even get a chance, rather than potential troublemakers ready to sabotage an enterprise at a moment’s notice.  The same can be said for Scott Sumner’s “musical chairs” account.  As for schools of thought, the rational expectations theorists provide the most flattering picture of the poor, yet in the context of macroeconomics they are very frequently mocked for their unrealistic assumptions.  Search theory models of unemployment, which for instance I have tried to promote, also paint a not unfavorable picture of the jobless, but they too are not very popular in the New Old Keynesian economics.  If I were to generalize, and yes there are many exceptions, but still I would say that these more flattering pictures of the unemployed are more likely to be associated with or embraced by the political Right.

Consistency is hard to come by, and probably always will be.

Yunnan notes

by on July 18, 2015 at 12:48 am in Food and Drink, Travel, Travels | Permalink

yunnan

In the summer, up to half of a multi-course meal may consist of mushrooms, the best I have had.  Fried goat cheese is served, and the ham exceeds that of Spain in quality.  I had not thought that buckwheat flour pizza, dipped in fresh honey, would be a staple in Chinese food.  There is also flower soup of numerous kinds, corn dishes, pumpkin, and donkey.

Even the largest city in Yunnan — Kunming — has fresh air, a rarity in China.  The weather is perfect year round, and the faces have Burmese, Tibetan, Thai, and Mongolian features.  About one third of the population is explicitly classified as “ethnic minority,” and most of the others look like a blend with Han Chinese.

Dali, the second largest city, is nestled into a lake and mountains as a Swiss city might be.  You could explore the neighboring villages around the lake for months.  I recommend Xizhou, stay at Linden Centre.

The population is pro-American, not always the case in China, and the Flying Tigers, who flew bomber missions against Japan from Yunnan, are cited frequently, including in dinner toasts to visiting scholars.

Yunnan University has a significant program in cultural economics, and as my hosts I thank them for the invitation and for their extreme hospitality.

Yunnan is arguably the nicest province in China to visit, and one of the best trips in the world right now.  The quality of infrastructure and accommodations is good, but exoticism and surprise remain high, the perfect combination.  Go before it’s too late.

Yemen’s capital, Sanaa, may run out of economically viable water supplies by 2017 as available groundwater is unable to keep pace with the needs of a fast-growing population, experts warn.

Per capita water consumption is right now about two hundred cubic meters per year, compared to a scarcity threshold of 1700 cubic meters per year.

The cost of water has tripled in the last year, and the population of the city is expected to double within the next ten years.

There has been talk of moving the capital, as well as desalinating seawater on the coast and pumping it 2,000 metres uphill to Sanaa. But there are no concrete plans.

It may be too late for the removal of various water subsidies to make a difference, even assuming that were to happen.  In the meantime, there have been few positive developments and of course the war is a huge negative.

It would be tragic, and in modern times unprecedented, if and when a major city simply runs out of water, and that could happen in about two years’ time.  Here is further coverage.

Jaan, in Sinagpore

by on July 8, 2015 at 12:13 pm in Food and Drink, Travel | Permalink

Why should you seek out French food in Singapore?  Yet I did.  I would describe my meal as at the San Sebastian level for quality and presentation, and one of the best I’ve had in the last five years.  I also enjoyed the best view of any meal of comparable quality, looking out onto Marina Bay Sands and the Straits.

P1100344

In fact, Singapore rarely disappoints.  There is an all-vegetarian menu as well.

Green pea guacamole

by on July 1, 2015 at 7:25 pm in Food and Drink | Permalink

I’m seeing this idea slandered in my Twitter feed, so perhaps I should add to the rising critique of POTUS on this one:

The late chef Michael Roberts was the inventive Southern Californian who created a green pea guacamole. I was puzzled by the unusual yet pleasing quality of the green peas he used instead of avocado.  In this adaptation, I have combined avocado with peas for a refreshing, clean flavor.

That is from Diane Rossen Worthington, from WaPo 2012, with a full recipe at the link.  You can read much more about green pea guacamole here.

Apparently the institutionalization of small-scale food foraging is part of the new food chain for restaurant supply, and it has become an “intensely secret” and “ultracompetitive” world:

FreshDirect, the online grocery-delivery service, offers packs of foraged lambsquarters for $4.99 each. Chef David Waltuck, who’s bought ingredients from foragers at his New York restaurants since the ’70s, says the picking operations have gotten more sophisticated to keep up with the market. “Foragers sell to purveyors now,” he says. “It became more of a business. Back in the early days, there was nothing like that.”

With the explosion in popularity, though, the foragers themselves have had to become even more protective of their wares. “You’re looking at limited resources,” says Matt Parker, a West Coast–based purveyor of foraged ingredients who works with a small network of gatherers and sells to restaurants such as Spago and Gjelina. “Foragers live and die by the seasons and what’s available, so of course they are protective of their spots — that’s how they make a living.” Parker sustains a roster of “seven to nine guys, depending on how reliable they want to be,” but none will reveal their “honey grounds” to him. Waltuck adds, “They might take you out with them, but they’ll blindfold you.” Indeed, when another prominent New York chef offered to send me out with his preferred forager in Jersey’s Delaware Water Gap, he agreed to do so only if I’d wear a pillowcase over my head for the entire car ride. Eventually, the forager got cold feet and reneged on the deal altogether.

That is from Edna Ishayik, via MR reader Jeremy Yamada.