Month: September 2003
Google the Revolution!
By popular demand we have added a search box to the left sidebar. Should, for example, you want to find all posts by your favorite Revolutionary, just search for Tabarrok! Now that we are getting lots of hits and a fair number of links, Google has a pretty good archive of MR. But you can help by putting a link to www.MarginalRevolution.com on your homepage – this will further draw the attention of the great Google spider! Thanks. You can, of course, also find content by category and date in the Archives.
Stalin, Shakespeare, and Tarzan
Dmitri Shostakovich noted that Stalin was forced to ban Shakespeare, as he understood all too well the political implications of Macbeth, Hamlet, and King Lear.
We also learn:
Dmitri Shostakovich recalled that ‘Stalin loved films and he saw The Great Waltz, about Johann Strauss, many times, dozens of times…Stalin also liked Tarzan films, he saw all the episodes.”
Tarzan was popular with Soviet citizens as well, which led to a “cult of youth” in the image of the Tarzan hero. Soviet leaders apparently were comfortable with the political implications of The King of the Jungle, raised by beasts.
From the recent book The Dancer Defects: The Struggle for Cultural Supremacy during the Cold War, by David Caute.
Will Bush back away from steel tariffs?
President Bush has received two mid-term reports, critical of his decision to implement steel tariffs, here is a relevant International Trade Commission link. The tariffs are not only bad economics, but it seems, bad politics as well. Steel price increases appear to have cut out some jobs in the potential swing states of Pennsylvania, Ohio, and Michigan. And most of Bush’s economic advisors opposed the tariffs from the beginning. The Washington Post account (see the above link) suggests that the Bush Administration is likely to nix the tariffs:
“The only reason they won’t do it is if they’re unwilling to admit they made a mistake,” said a Republican strategist who works closely with the White House.
An alternative account from The New York Times (registration required) implies that the matter is less settled. Even the Post notes that giving up on the tariffs would be a significant loss of face for Karl Rove, their initial backer. Either way, this issue is likely to prove an embarrassment to the Bush reelection campaign.
NY Times Wrong on Iraqi Gun Ownership
In March, Neil MacFarquhar of the New York Times asserted that guns were easy and legal to obtain in Saddam Hussein’s Iraq. The NRA has long argued that guns are a bulwark against the police state so Slate’s Timothy Noah challenged the NRA to explain “how Iraq got to be, and remains, one of the world’s most repressive police states when just about everyone is packing heat.” Noah later rejected reader explanations of this apparent paradox, including the possibility that MacFarquhar was wrong, and “reluctantly” concluded that private gun ownership is not a bulwark against a police state.
Today, however, John Tierney of the New York Times reports that “Mr. Hussein, never one to tolerate competition, forbade private citizens to carry weapons, effectively outlawing the security industry.”
Clearly, the New York Times is wrong. But where does the truth lie?
New Chief Economist at the IMF
I hear very good reports about the new IMF Chief Economist, Raghuram Rajan, formerly at the University of Chicago. Here is an interview with him, from the Chicago Sun-Times. Also read this link, for more on Rajan and his book with Luigi Zingales, Saving Capitalism from the Capitalists.
Class size doesn’t matter much
A new OECD study suggests that smaller classes contribute little to learning, education blogger Joanne Jacobs offers her comments. The study, led by J. Douglas Willms looked at a dozen countries, and confirmed earlier results that class size was not a significant variable, see also this survey and this short note. My suspicion, in the American context, is that pushing for smaller classes will involve hiring inferior teachers, a classic example of unintended secondary consequences.
If we want to improve education, more effective factors include:
…improving relations between teachers and students, hiring literacy specialists, intervening earlier than Grade 2 when a child is having trouble learning to read, teaching educators better classroom management, encouraging parents to read to their children in the evenings, and offering early childhood education programs.
Jacobs suggests that small classes are most important for kindergarten and first grade, especially for disadvantaged students.
Will life extension increase risk aversion?
Scientist Tom Johnson says that humans someday might live to 350 years old. Aubrey De Grey argues that as our lifespans become longer, we might stop taking high-speed automobile trips. Why risk losing so much, and after all, what would the hurry be?
FuturePundit suggests that perhaps our level of risk-taking behavior is regulated by our biology and hormonal systems. So if driving a car doesn’t “feel too risky” now, living to 350 won’t change this, perhaps we were never making an intertemporal calculation in the first place. Furthermore, it is young males who take the most risks, and they have large numbers of years left to lose. So giving us more years might not change our behavior that much. FuturePundit then wonders how drugs and neuroscience engineering might change this conclusion. What if you could take drugs that would make you more averse to risky behavior? Might you then, sitting alone in your room, ponder your remaining 320 years and decide to clutch on to them?
John Lott and gun control
I stopped following the John Lott controversies a long time ago. If you don’t already know, he is the economist who wrote More Guns, Less Crime. Glenn Reynolds offers a comprehensive update on the latest back and forth, with links, including to John’s defense of his work.
Early Amazon civilization discovered
Researchers have now found hard evidence that the Amazon had a sophisticated and populous civilization, before the arrival of Columbus.
The finds lay to rest the notion that the region was pristine forest when the explorer landed in 1492…Although there was probably some untouched forest in the region, Heckenberger [the researcher] reckons that most was managed by the inhabitants and kept for cultural and symbolic, rather than economic, reasons. “It was probably very important to them just as Central Park is important to New Yorkers,” he says.
Here is the original link from Nature. Many individuals have been attached to “crankier” versions of this theory, suggesting that “prehistory” in the Americas was quite advanced, see here for a more skeptical take.
You can always resell it
Why not just give gifts of money? Prudence of Slate tells us that norms are changing, and that more people are finding cash gifts for weddings acceptable. The couple that posed the initial question put it as follows:
So they think it’s “tacky” to ask for money? Well, we think it’s worse to make people spend precious time getting gifts we don’t need or want.
Amen, says this economist, whose best wedding presents from this last May often were the gift certificates. I might add that co-blogger Alex and his wife gave us a very useful gift certificate for a framing shop.
One economic estimate suggested that Christmas gifts alone involve a “deadweight loss” of $4 billion. I’ve never been convinced by this number, gifts help people sort out how well their friends and loved ones understand them, and create new lines of communication, surely this is an offsetting benefit. And sometimes a surprise or show of affection, as embodied in a gift, is simply more fun. Nonetheless gifts are a form of signalling, and very often people invest too much effort in the signal, just to be higher in the pecking order. I hope Prudence is right about the change in norms.
Addendum: I read the following in the Weekend Financial Times: “In 1979, Karen Davis started a hickory-baked ham company in Marieta, Georgia, and on opening day her parents gave her a porcelain pig for good luck. Over the next two decades, she estimates that she got 400-500 pig gifts. “Pigs aren’t my thing,” she says, though she did warm to the piggy banks.” See the article for other examples of dubious gifts.
The trade deficit and the dollar
America has had persisting trade deficits, so some economists think the dollar is due for a big plunge. The magazine The Economist cites some commentators as suggesting a 40 percent decline against the Euro. Read the commentary of Brad DeLong, who resists making such a prediction himself. See Brad’s longer and more detailed discussion, where he raises the possibility that capital inflow into the U.S. will slow down and the dollar will plummet. He tells us that the whole process has gone on far longer than he would have expected, but again he stops short of offering his own prediction. He wonders when foreign investors will start worrying about the risk of a huge dollar depreciation.
I am more optimistic than the doomsayers (N.B.: I do not read Brad as belonging to this group, though perhaps he is flirting with the idea of joining), in part because I think that strong growth and productivity, which currently appear to be in the cards, can avoid or postpone a “day of reckoning” of this kind. America is simply a good place to invest, and will remain so for the foreseeable future. The dollar did decline by over 50 percent in the 1980s, against major currencies, but at that time high dollar values were more obviously a speculative bubble in the first place.
The cost of TV advertisements
What does advertising time cost for various TV shows? Read Daniel Davies who offers the relevant link. For the data at hand, Friends sells ad time at the highest rate. The Simpsons is more expensive than Monday Night Football.
Monkey see, monkey do?
Monkeys appear to have an innate sense of when they are being treated unfairly, read here. Capuchin monkeys will refuse beneficial exchanges, if they see another monkey getting a better deal. Sound familiar? Similar results are found in the literature on experimental economics for humans, as Robert Frank notes at the link.
Here is one summary from The Washington Times, the only paper I can find in today’s Virginia power blackout, they don’t yet have the link on-line:
When both monkeys were given a cucumber slice after handing over the token, they completed the trade 95 percent of the time.
But when one was given the tastier grape for the same amount of work, the rate of cooperation from the other monkey fell to 60 percent…The refusal to make the exchange increased as the experiment continued…The scientists concluded that capuchins apparently measure rewards in relative terms…the tropical forest-dwelling capuchins were chosen for the experiment because they often share food.
One commentator on the study, a Charles Janson of SUNY, suggests that the behavior of the monkeys might have been learned in captivity (again, cited in The Washington Times).
Storming the MarginalRevolution
We at MarginalRevolution are committed to providing regular fresh content on a daily basis. That being said, we live in Northern Virginia, a big storm is coming, and Governor Mark Warner says we might lose electrical power for a while. I don’t expect blogging problems, but on the off-chance that you don’t hear from us for a short while, keep faith, we will be back as soon as conditions permit.
Panic at the Iowa Electronic Market?
The Iowa Electronic Market is an online securities exchange where traders buy and sell contracts whose monetary value depends on political events. Most contracts pay $1 if the event happens (Bush re-elected) or pay by vote share (e.g., “Vote share Bush 2000” would pay $.49).
Early this week, the contract “California recall cancelled” was selling for about $.05 – very confident the recall would go through. Then the panel of the 9th circuit postponed and the market jumped to about $1.10. Today, “recall cancelled” is trading at about $.03!! Could this be an example of a stampede at the Iowa Market? Is a single trader driving this market? If you are a trader, drop me an email and tell me your thoughts on what happened this week.
