Friday assorted links

by on April 29, 2016 at 11:53 am in Uncategorized | Permalink

Global fishing stocks are collapsing due to the tragedy of the commons and the resulting overfishing. Technology, however, suggests a possible solution:

Global Fishing Watch is the product of a technology partnership between SkyTruth, Oceana, and Google that is designed to show all of the trackable fishing activity in the ocean….

The tool uses a global feed of vessel locations extracted from Automatic Identification System (AIS) tracking data collected by satellite, revealing the movement of vessels over time. The system automatically classifies the observed patterns of movement as either “fishing” or “non-fishing” activity.

This version of the Global Fishing Watch started with 3.7 billion data points, more than a terabyte of data from two years of satellite collection, covering the movements of 111,374 vessels during 2012 and 2013. We ran a behavioral classification model that we developed across this data set to identify when and where fishing behavior occurred. The prototype visualization contains 300 million AIS data points covering over 25,000 unique vessels. For the initial fishing activity map, the data is limited to 35 million detections from 3,125 vessels that we were able to independently verify were fishing vessels. Global Fishing Watch then displays fishing effort in terms of the number of hours each vessel spent engaged in fishing behavior, and puts it all on a map that anyone with a web browser will be able to explore.

Can vessels turn AIS off?

Sure, but that is certain to draw attention, like wearing a trenchcoat and sunglasses on a hot summer day. Global Fishing Watch will enable us to flag suspicious behaviors like suddenly disappearing, or appearing as if from nowhere, or jumping 1,000 miles and appearing to fish in the middle of Asia. It will give us the opportunity to identify who may have something to hide, and who is operating openly and transparently. Secondly, more countries and intergovernmental agencies like Regional Fisheries Management Organizations (RFMOs) are requiring AIS use within their waters, so more fishing vessels will be legally compelled to use AIS in the coming years. Many already are. For example, as of May 2014, all European Union-flagged fishing vessels over 15 meters in length are required to use AIS. Perhaps most importantly, AIS was primarily designed as a safety mechanism to help avoid collisions at sea. Turning off your AIS just to avoid being tracked puts your vessel and crew at risk of being run down by a cargo ship in the middle of the night.

Mark this as another example of the end of asymmetric information.

Hat tip: GHABS.

If I were writing a piece advocating Universal Basic Income, I would not call it “Why Free Money Beats Bullshit Jobs.”

That is from Rutger Bregman, though please note he may not have chosen the title.  I believe such a title would not appeal to the people who have…bullshit jobs…and who are being asked to finance the free money.

This economist so transparently pandering to Trump also will not convince.  And here an actual Satanist is not so convinced by some recent claims about Ted Cruz.

From a new Pew Study:

In our latest national political survey, released in March, 59% of the public say immigrants strengthen the country, while 33% describe them as a burden. In 1994, opinions were nearly the reverse: 63% said immigrants were a burden and 31% said they strengthened the country.

You will note that they views of Republicans and Democrats diverge after 2006.  Millennials are especially favorably inclined.


Last month, De La Rue, the world’s largest currency maker, sent a letter to the central bank complaining that it was owed $71 million and would inform its shareholders if the money were not forthcoming. The letter was leaked to a Venezuelan news website and confirmed by Bloomberg News.

“It’s an unprecedented case in history that a country with such high inflation cannot get new bills,” said Jose Guerra, an opposition law maker and former director of economic research at the central bank. Late last year, the central bank ordered more than 10 billion bank notes, surpassing the 7.6 billion the U.S. Federal Reserve requested this year for an economy many times the size of Venezuela’s.

…While the cash was still arriving — at times, multiple planeloads a day — authorities set their sights on the year ahead. In late 2015, the central bank more than tripled its original order, offering tenders for some 10.2 billion bank notes, according to industry sources.

But currency companies were worried. According to company documents, De La Rue began experiencing delays in payment as early as June. Similarly, the bank was slow to pay Giesecke & Devrient and Oberthur Fiduciaire. So when the tender was offered, the government only received about 3.3 billion in bids, bank documents show.

That is from Andrew Rosati.  Here is a sad and poignant post on the suicide of Venezuela, by Joel D. Hirst.

Since the Greek situation is heating up again, and not in good ways, I thought I would link to a recent interview I did.  Here is one bit:

Asked about what has gone wrong with Greece’s bailouts, Professor Cowen commented that “the bailout programs were never going to work in the first place. The debt is too high and is more of a political weapon than anything which can be paid back. And the Greek economy requires very serious structural reform, more than the Greek people seem to wish to accept. That is two impossibilities in the situation right there, and then on top of that we have a dysfunctional EU, slow global growth across the board, and the refugee crisis. In that setting, can one expect anything other than failure?”

“It’s all a big bargaining game, and at the end of the day pulling the plug will have to be up to the Greeks. Everyone’s expectations are unrealistic, and everyone knows that, including the IMF and EU and many others too. But who will pull the plug? Tsipras almost did, and then backed away. In my view, sooner or later Greece will leave this arrangement because it simply isn’t workable. I don’t look forward to the resulting economic carnage.”

Asked why he thinks Europe has been unwilling to consider a debt-write off for Greece, Cowen said that “because Italy above all would be next in line, but of course Spain too and others as well.”

Here is the conclusion:

Lastly, when I asked Tyler Cowen what policies he would recommend for Greece so the country can re-boost its economy and put people back to work, [he] said this:

“Do you know the old punchline? “Well, I wouldn’t start from here.” Greece has been deindustrializing for a long time, there isn’t enough to take the place of manufacturing, and tourism just isn’t enough. The interest groups seem intractable. I’d like to see Greece have much more of a free market economy, but that’s begging the question, isn’t it? And there is the ongoing distraction and stress of having to renegotiate the agreements every few years. By the way, I can’t bench press 600 pounds.”

The full interview is here.

Thursday assorted links

by on April 28, 2016 at 12:13 pm in Uncategorized | Permalink

What drives you?

by on April 28, 2016 at 2:26 am in Economics, Philosophy | Permalink

In fact, over the years, Mr. Gross has consistently asked one question of prospective employees: What drives you?

The twist is that they must pick one of three answers: money, power or fame.

Strangely to him, no one has ever picked fame.

“It is the one thing I have always wanted,” he said. “When I was starting out at Pimco in 1972, I told my mother and father that I was going to become the most famous bond manager in the world.”

And this:

At night he will wake up as many as three times to check on global markets, he says.

And this:

“My whole evening is dependent on whether I beat them [Pimco, his former employer],” Mr. Gross said. “You see, I have to prove it all over again. Every day.”

The Landon Thomas Jr. NYT Dealbook post is interesting throughout.  And here is a 2008 profile of Gross.

Paul Frijters and Benno Torgler have a new six-page paper (pdf)on that topic, here is the abstract:

The current peer review system suffers from two key problems: promotion of an in-crowd whose methods, opinions and innovations it protects; and failure to represent the opinions and interests of non-peer clients. As a result, whole disciplines orient themselves toward navel-gazing research questions of little import to society or even science as a whole, and new methods and concepts must be unusually persuasive to break through. We thus suggest a more efficient and integrity-preserving system based on an open two-sided market in which buyers and sellers of peer review services would both be subject to a set of recursive quality indicators. We lay out key features we think would be important to reduce the opportunities for gaming and that improve the signals about the societal value of a contribution. Our suggestions include a level of reward offered by the author of a paper to get refereed and a level of desired quality of the referee. They include randomly selecting from a group of referees that express a willingness to accept the offered contract. They include the possibility that papers are put up by non-authors for peer-review for assessment on different criteria, such as societal relevance. And they finally include the possibility that referee reports themselves become refereed by other referees. What we envisage is that such an open market in which all elements are subject to peer review will over time lead to specialized reviewers in different criteria, and more useful signals about the nature and quality of any individual piece of work. Our incentivized market set-up would both professionalize the peer review process and make it completely transparent, an innovation long overdue.

Interesting, but the main problem with the idea is simply that no one cares.

For the pointer I thank Ben Southwood.

The BBC has an interesting report on ambulance services in Beijing.  Up until now, ambulance drivers could decide themselves how much to charge people for their services.  I’m assuming these weren’t listed or known beforehand either.  This seems ripe for abuse given that the patient will be desperately wanting to get to the hospital and in no state for bargaining.  According to the article, most Chinese on social media didn’t even know that ambulances charge at all.  That must come as a big shock then when they get hit up by the driver.

So what did authorities decide to do?  Decree that ambulances “be fitted with taxi-style meters in an effort to allay public concerns about overcharging.”  Hmm, this doesn’t seem to be the most incentive compatible policy either.  As one social media cynic (read: realist) pointed out, “Don’t rule out ambulances taking a detour when using the meter.”  At least when you’re in the backseat of a cab, you can watch where the driver is going.  In the back of an ambulance in an emergency situation, that’s not going to be very feasible!  Don’t get me wrong, I’m in no way advocating free ambulance services, but there has to be a better policy than this.

That is from Cherokee Gothic.

Lemonade sentences to ponder

by on April 27, 2016 at 1:46 pm in Economics, Music | Permalink

For those of you who just returned from a trip to Mt. Everest, Lemonade is Beyoncé’s latest album, and the lyrics are all about the pain she felt when her husband, music mogul Jay-Z, cheated on her. Or so it’s universally assumed.. many people have pointed out, Lemonade is available for streaming only on Tidal, which is Jay-Z’s company. So that means Beyoncé is helping Jay make a lot of money off his alleged infidelity—and shoring up his faltering streaming service at the same time.

That is from Kevin Drum.  What would Ronald Coase say?

Wednesday assorted links

by on April 27, 2016 at 12:25 pm in Uncategorized | Permalink

1. When were the great philosophers?

2. When it comes to the great stagnation, don’t blame the engineers.  A very good post with lots of detail; I say fear the services!

3. Are ravens as clever as chimps?  Paper here.

4. Traffic lights embedded in pavements, in case you cross the street while viewing your smartphone the culture that is Germany.

5. Frequency of Sex Shapes Automatic, but Not Explicit, Partner Evaluations.

6. Noah Smith is leaving academia for full-time at Bloomberg.

7. Why are reactionaries especially unpopular in the United States?

Sentences to ponder

by on April 27, 2016 at 4:45 am in Education, Political Science | Permalink

The Naval Academy has risen to 9th on the list of national liberal arts colleges, tied with Davidson and Claremont McKenna. Meanwhile, West Point ranks 22nd, just behind Grinnell, Colby and Colgate, and the Air Force Academy is 29th, tied with Scripps and Barnard.

That is from Nick Anderson.

Here is one summary of the recent brouhaha.  North Carolina made a mistake in signing the new law.  Not just a practical mistake, because of the backlash, but a mistake outright.  I’m not aware there was a problem needing to be solved, and yet new problems have been created.

There is nonetheless a relevant argument for the law which I believe resonates with many Americans:

Cruz’s argument centers on the idea that allowing transgender women to use the women’s restroom would lead to deviants dressing up as women and preying on young girls. His campaign released an ad accusing Trump of capitulating to the “PC police” and asking viewers whether a grown man pretending to be a woman should use a restroom with your daughter or wife.

Whether you agree or not, that argument helps us rephrase the dilemma as follows: should there be a legal definition of who is a transgender person and why?  And should transgender people wish that there were such a legal definition?

If there were such a definition, problem solved, at least in principle.  Transgender individuals could use the bathroom which their legal stipulation entitled them to, or would entitle them to, were a court case to arise.

Women’s colleges of course face a private sector version of this issue (here is one pending change).  Private companies have policies on bathroom use, and gender-specific sporting events must make rulings.

So what to do with the law?  I see at least three options.

#1: The first and most libertarian view is to refuse to offer a legal definition of transgender.

The transgender concept seems so…fluid.  This page from Wikipedia illustrates the underlying legal problems:

These include people whose identities are not exclusively masculine or feminine but may, for example, be androgynous, bigender, pangender or agender — often grouped under the alternative umbrella term genderqueer[5] — and third-gender people (alternatively, some references and some societies conceptualize transgender people as a third gender).[6][7] Although some references define transgender very broadly to include transvestites / cross-dressers,[8] they are usually excluded, as are transvestic fetishists (because they are considered to be expressing a paraphilia rather than a gender identification) and drag kings and drag queens (who are performers and cross-dress for the purpose of entertaining). Intersex people have genitalia or other physical sexual characteristics that do not conform to strict definitions of male or female, but intersex people are not necessarily transgender, since they do not all disagree with their assigned sex. Transgender and intersex issues often overlap, however, because they both challenge the notion of rigid definitions of sex and gender.

Facebook has introduced about fifty different terms related to gender identification.  It is not difficult to argue the current legal system won’t be “getting this one right,” whatever that might mean.  For a start, would you trust the legal system in North Carolina?  (From my understanding, it would indeed be a state matter.)  Probably some people who right now “slip by” would be caught on the wrong side of an unpleasant dragnet.  And what exactly is the final test to be run to determine the right answer to a contested issue concerning a transgender individual?  If there were ever a time for some creative ambiguity in the law, it seems this might be it.

In this view, yet another problem with the North Carolina bill is that it may end up forcing everyone’s hand on constructing a legal definition of transgender.

If we stick with no legal definition of transgender, let’s tackle the remaining problems directly.  For instance we could significantly increase the penalties for men who abuse women or young girls in or near women’s rooms, if indeed that is an ongoing problem.  You can tax either inputs or outputs and in this case it seems to make sense to place the higher tax on the outputs.

#2: Offer two parallel legal systems for gender.

In one of the parallel systems, you can apply formally for a change of gender status, although I suspect this could not end up handling more than two or three categories, hermaphrodites perhaps being the third.  In the second of the parallel systems, you can decide not to apply for formal legal designation of gender and instead live under creative ambiguity.  The practical import of that ambiguity often will depend on how clearly a person fits traditional social categories of gender in a simple and visible way.  In any case, a person can choose which legal system to live under.

The formal legal designation would matter for which prison you would be assigned to, which bathroom you could visit, and which chess tournaments you can play in, among a variety of other questions.  Here is a brief survey of legal approaches around the world, with some countries opting for versions of the parallel approach.

#3: Use the law to force everybody’s hand.

In this view, the current status quo is not very good for many transgender individuals, so something must be done.  Forcing a legal solution to these issues might raise social consciousness, even if some state rulings on transgender issues are objectionable in the meantime.  Let’s create something to fight over.  With a full legal definition of transgender in place, the logic of individual rights will turn its wheels, as it so often does in America, and eventually transgender individuals would fall under the protection of anti-discriminatory laws.  Perhaps this is better than the parallel legal systems approach, because under the latter too many individuals slide along in a state of creative ambiguity and transgender issues will remain underemphasized.  In this vision, the law — whatever its limitations — is likely to prove the friend of transgender individuals, so things should be sped along as rapidly as possible.

I do not have a good sense of which of these three approaches would be best in the United States.  In any case, it seems to me the question “how should the law deal with or define transgender individuals, if at all?” is more fruitful and fundamental than asking “how should North Carolina regulate bathroom admission policies?”  I would be interested to read a law and economics paper on these issues.

Addendum: Here is a paper on whether LGBT inclusion boosts economic growth in emerging economies, though I doubt if the effects are causal.

Second addendum: Henderson and Cordato make good points, and favor a version of option one.  That said, I don’t think all judgments can be left to markets, given prisons, the continuing existence of public bathrooms, etc.  Here are yet further comments.  Here is a good Jacqueline Rose piece from LRB.

Ten weeks after BoJ governor Haruhiko Kuroda startled both financial markets and parliamentarians with Nirp, the yen has appreciated by some 8 per cent against the dollar. The stock market has rebounded sharply this month, however the Topix bank index remains 11 per cent lower since the advent of Nirp.

Under such a policy, risk assets were supposed to rise, but instead demand for Japanese government bonds rallied, rewarding the risk averse. Meanwhile, even finance ministry officials concede that the deflationary mindset is more entrenched than ever. There is agreement that Nirp has backfired and such an unsustainable monetary policy cannot support growth, let alone help financial asset prices.

That is from Henny Sender at the FT.