Month: December 2003

Are Professors Obsolete?

We economics professors like to point out – or at least I do – that downsizing is a good thing. Aren’t you glad that blacksmiths were downsized because of the automobile? But we don’t like it when this argument is turned on us. Steve Pearlstein writes:

Every year… there are thousands of college professors who twice or three times a week offer what is largely the same basic lecture course in a subject like molecular biology or Shakespeare comedies. A few of these professors offer the kind of brilliant lectures that fill auditoriums and provide the kind of educational experience that students remember all their lives. Many of the rest offer something that ranges from mediocre to awful….why don’t we identify these extraordinary lecturers, put their lectures on CDs, and sell them to universities that could supplement them with faculty-led tutorials or discussions?

Pearlstein points out that Mark Taylor, a Williams College philosophy professor, and Herb Allen, a Wall Street financier, tried to do just this at Williams College but not surprisingly the faculty resisted and vehemently voted the idea down.

The response from educators when presented with ideas like this is that students need face-to-face interaction with faculty, CDs can’t answer questions, material has to be kept updated etc. But none of this is really convincing. I teach Econ 101 well, but it’s not obvious, even to me, that students would not learn as much with a DVD of Kenneth Elzinga or Timothy Taylor or the late Paul Heyne, to name three great teachers of economics, supplemented with live tutorials and problem sessions. Needless to say, the latter scheme, would be cheaper.

I think that we faculty will manage to beat back these ideas for another ten to twenty years but eventually the benefits of the technological approach will become overwhelming. When this happens teaching will become more of a winner-take-all superstar market and wages for the rest of us will fall.

French strikers hard at work

Walking around Paris, I came across the following in The International Herald Tribune:

“The government wants to correct France’s image,” said Christophe Beaux, technical adviser for the Ministry of Economy, Finances and Industry. “Our image has been stained by cliches,” Beaux said. “The bad publicity generated by the 35-hour workweek, by workers going on strike, gives people the impression that French people do not like to work.”

Those cliches and bad publicity will just kill your reputation, won’t they?

Note, however, that the French proclivity for strikes should not be attributed to laziness. (Here is some more systematic data: Excel file, html, comparing the French to other countries. Of the G-7, only the Canadians strike more.) In fact many French strikes are hard work. French strikers are more likely than most striking nationals to march, blockade, destroy, or otherwise make their displeasure public. This tendency stems from the centralized nature of the French economy and governance. A few tractors or transport strikers can shut down large parts of the country and thus suffice to grab national attention. French strikers are working hard in their quest for rents.

Addendum: French diplomats are now at strike, this should make at least Andrew Sullivan happy.

Earthlike planets may be common in the universe

Read Futurepundit on this topic. This news increases the expected well-being out there in the universe, but probably lowers the expected welfare of mankind. Visiting aliens could be a boon or a disaster but I am risk-averse in this capacity. Neither my juvenile love for science fiction nor my general optimism make me wish to live to see alien visitation. While earth institutions are far from efficient, they could be much worse. Right now the dominant technological power, the United States, is relatively benevolent by the standards of world history. Technologically superior aliens would upset this balance and could leave too much power in the wrong hands.

This whole news about planets only raises the question anew: Where are they? One possibility is that civilizations simply do not last very long on a cosmic time scale. If intelligent life has evolved elsewhere in the universe, most of the time it has expired before having a chance to contact us. If the window of opportunity is sufficienly small, it would help explain why we do not receive signals from other civilizations.

The research also shows that the nature of Jupiter’s orbit may be responsible for intelligent life on earth:

The simulations show that the amount of water on terrestrial, or Earthlike, planets could be greatly influenced by outer gas giant planets like Jupiter.

“The more eccentric giant planet orbits result in drier terrestrial planets,” Raymond said. “Conversely, more circular giant planet orbits mean wetter terrestrial planets.”

In the case of our solar system, Jupiter’s orbit is slightly elliptical, which could explain why Earth is 80 percent covered by oceans rather than being bone dry or completely covered in water miles deep.

This points to another reason why the aliens have not come. The existence of intelligent life requires a very large number of favorable coincident factors, perhaps larger than we have realized to date. But read Brad DeLong on the Fermi paradox, which suggests a large number of intelligent civilizations out there in the universe, even once we account for all the improbabilities.

Do the French favor diversity?

Read Jacob Levy on the new French measure to ban private individuals from wearing conspicuous religious symbols in the classroom. This would include Islamic headscarves, Jewish yarmulkes, and “large” Christian crosses. Don’t even ask about the Sikhs, who are obliged to wear turbans as their hair grows long. Here is a brief excerpt from Jacob’s analysis:

The proposed law is really quite repressive. One item that hasn’t been much mentioned in the English-language press is that it also prohibits wearing any visible political symbol (buttons and badges and so on). One article I read about that proposal in Le Monde last week made quite clear how arbitrarily that will be enforced, with school administrators drawing their distinctions between what is and what isn’t political. An AIDS ribbon? An anarchist’s A button? A button in support of SOS-Racisme? One administrator said that that wouldn’t be prohibited, because anti-racism, isn’t a political value but a republican value. But the ban clearly isn’t restricted to a bright-line rule against partisan affiliations, either. It is going to leave tremendous discretion in the hands of principals to ban what they dislike and allow what they like.

Here is more:

It is, always, all about France and the French state, never about the conflicting obligations in conscience felt by committed religious believers.

Chirac’s announcement– which was not a surprise– referred to ‘the Islamic veil, under whatever name one gives it.’ This is a recurring rhetorical device of the laicitists. There are, as far as I know, no reported incidents of French Muslim schoolgirls attending school actually veiled. French Islam is not, as a rule, that conservative. What is at stake is headscarves, and the incessant use of “voile” instead of “foulard” is an attempt to elide the difference between committed believers and fundamentalists.

Worst of all, it is estimated that about 2/3 of the French public support this measure. The only bright side is that France’s reputation in the Arab world is likely to take a big hit.

Facts about dogs in Paris

1. Parisians own about 200,000 dogs.

2. Those dogs leave behind approximately ten tons of droppings every day.

3. In the average year, it is believed that six hundred people break a limb slipping on such droppings, or when trying to pick the droppings up.

4. A brigade of sixty green motorcycles drives around town, picking up droppings. Of course they reach only a small percentage of the total.

5. There is a sizeable fine (about five hundred dollars) for leaving droppings behind. In a recent year only four people had to pay the fine.

6. The core problem is the absence of a Parisian police force. The only police in Paris are the Police Nationale. They consider it beneath their dignity to enforce such laws.

7. The city of Paris cannot control its own bylaws for security, traffic, or sanitation.

8. Only towns with less than ten thousand inhabitants are allowed to have their own police forces. Larger police forces would be considered a threat to national power.

9. There is something to be said for federalism after all.

The facts are from the stimulating Sixty Million Frenchmen Can’t Be Wrong, by Jean-Benoit Nadeau and Julie Barlow. If you are looking for a book to explain how France works, here is a good place to start.

Cultural diversity in France

I am in Paris as the American representative to a UNESCO conference on cultural diversity. Approximately twenty scholars and public figures will be attending, but I expect to have the strongest sympathies for cultural free trade.

From my point of view the timing for this conference could not be better. The French like to charge that American mass culture has no respect for diversity or minority points of view. But recently a French panel recommended a ban on religious attire in French public schools. Headscarves, skullcaps, and “large” crosses would not be allowed. Apparently sufficiently small crosses would be OK, Stars of David would be OK too, again provided that they are not too conspicuous. Many people in France expect that this measure will pass into law, Chirac just endorsed it. French Muslims, of course, are irate. Note that many French Jewish schoolchildren have been afraid to wear religious attire to public school for some time, mostly for fear of being beat up. Randall Parker offers commentary and numerous links on all of these issues.

The French also failed this week to rewrite the veto powers written into the Nice agreement of 2000. More specifically, the French and Germans cannot push through any EU reforms they wish. Instead, the Polish and the Spanish, both allies of the U.S. I might add, keep enough voting rights to have veto power. This development, of course, favors the rights of the smaller countries, although there is now talk of a financial punishment for Poland and Spain. Now I am waiting to see what happens when one of the smaller EU countries fails to meet the three percent rule for deficits, just as the French and Germans have failed to do.

The return of piracy

Ninety-five per cent of the world’s cargo travels by sea. Without the merchant marine, the free market would collapse and take Wall Street’s dream of a global economy with it. Yet no one, apart from ship owners, their crews and insurers, appears to notice that pirates are assaulting ships at a rate unprecedented since the glorious days when pirates were ‘privateers’ protected by their national governments. The 18th and 19th-century sponsors of piracy included England, Holland, France, Spain and the United States. In comparison, the famed Barbary corsairs of North Africa were an irritant. Raiding rivals’ merchant vessels went out of fashion after the Napoleonic Wars, and piracy was outlawed in the 1856 Declaration of Paris (never signed by the US). Since the end of the Cold War, it has been making a comeback. Various estimates are given of its cost to international trade. The figure quoted most often is the Asia Foundation’s $16 billion per annum lost in cargo, ships and rising insurance premiums.

The International Maritime Bureau (IMB), which collects statistics on piracy for ship owners, reports that five years ago pirates attacked 106 ships. Last year they attacked 370. This year looks worse still. In the first nine months, there were 344 attacks, up from 271 for the same period in 2002. Twenty crewmen have been murdered so far this year, up from six a year ago. If violent crime increased more than 300 per cent in five years in New York or London, the public would demand urgent police action. At sea, where the only lives lost are those of poor seafarers from the Third World, no one cares.

Here is the full story. The U.S. government is not making this a priority, but the next major terrorist attack may well be seaborne.

Bad Science Poisons Our Children’s Brains

The Natural Resources Defense Council has got mercury on its mind. They write, “Mercury Poisons Our Children’s Brains” explaining:

Mercury is a potent neurotoxin that, like lead, especially threatens the brains and nervous systems of fetuses and young children. A number of neurological diseases and problems are linked to mercury exposure, including learning and attention disabilities — which are a growing problem — and mental retardation. Mercury also might be linked to the recent increase in autism, Parkinson’s disease and Alzheimer’s disease…one in every 12 women of childbearing age has mercury in her blood above the EPA “safe” level…Toxic mercury emissions from power plants put 300,000 newborns each year at risk for neurological impairment.”

Frightening isn’t it? Lets take a closer look before sending the NRDC a check. How was the EPA’s safe-level arrived at? There are three major studies of mercury and neurological impairment in children due to consumption of contaminated fish. One study found no effect, one was ambiguous, the last found some mild impairment (You would never notice the impairment on an individual level and can detect it only in a large sample. Not to be ignored if it exists, but we are not talking about Downs children). To be on the safe side, the EPA focused on the one study that found an effect. Within that one study there was some uncertainty about how much mercury caused a problem so the EPA took that study’s lower bound (the lower bound of the 95 confidence interval for the statisticians in the audience.) Finally, to really be on the safe side, they divided the lower bound by ten!

Now notice how the charlatans at the NRDC twist a number of true facts to make a big lie. It is true that mercury can cause neurological impairment and it is true that 8% of women have blood mercury greater than the EPA safe level but you would never learn from the NRDC that the EPA safe level is more than ten times smaller than levels that have ever been found to cause mild impairment and that even the existence of such impairment is open to question. Throw in a few warnings about how learning disabilities are a “growing problem” and, for all the readers who don’t have children, don’t forget to mention the “recent increase” in Parkinson’s and Alzheimers and you have a perfect example of advertising masquerading as science. (Ever notice how many public interest groups sound like used car salesmen? Sale! Sale! Sale! Buy now before its too late!)

The NRDC wants emission levels cut by 90% in three years, an approach that would cost billions of dollars. The Bush administration wants to cut levels by 30% over the same time period, which would have a marginal cost of virtually nothing because of other regulations scheduled to take effect in anycase, and by 70% over a somewhat longer time frame. Naturally, the NRDC thinks this is evil. This time, I agree with the administration.

I have cribbed from CEIs Joel Schwartz and AEIs Lutter and Irwin.

Going too far in Italy

The Italian Communist Party recently put a rider in a bill to ban all child labor in advertisements. The main goal was to disrupt the government but now it appears that the bill will pass. If so, babies will no longer be allowed in Italian television ads. One in three Italian TV ads uses a baby, although (because?) Italian women are having so few babies. 1.2 children are born per woman, well below the replacement rate, and one of the lowest rates in the world. Some companies are wondering how they will publicize diapers. The source is the Weekend Financial Times, this French Internet Cafe makes linking very difficult.

Dangerous Rice

Rice arrived in Spain in about the eighth century, from the Moors, and the Spanish word “arroz” comes from the Arabic. In medieval times, growing rice was extremely controversial, largely because the rice fields were a breeding ground for malaria. For this reason, the Spanish city of Valencia, to this day renowned for its rice and its paella, was called “land of rice, land of tears.” Various regulations restricted the growth of rice in order to limit malaria. Debates continued to rage throughout the eighteenth century, a distinction was commonly drawn between fields with stagnant water and irrigated fields, which were supposedly safer.

The clincher: Malaria has long been eradicated in Spain, but to this day “the allocation of land or enclosures for rice growing requires special authorization from the office of the Spanish Ministry of Agriculture in Valencia.”

Parisian puzzles

I am pleased to have several free days in Paris, but of course this only stimulates my curiosity. I have been wondering the following:

1. Why do so many high-rent districts in Paris have fancy-schmancy bookshops that appear to stock no more than five hundred books? How do they possibly pay their rent?

2. Why has French art plummeted in quality and popularity so drastically after the Second World War? I love Yves Klein as much as does the next guy, but France is no longer a world leader in painting.

It can’t be the wartime devastation or the Nazi persecution. German contemporary art, in comparison, has been robust, as evidenced by Baselitz, Kiefer, Richter, and others. Nor are government subsidies the root of the problem. A good case can be made that the subsidies have wasted money. But no one in France forces artists to stop selling to private customers. The subsidies are not so large as to make French artists richer than Baselitz and Richter, who sell to the private sector. So why doesn’t a dynamic private art sector coexist with the less entrepreneurial subsidy-supported sector?

Perhaps subsidies somehow corrupt the entire artistic network, but the logic of this argument remains to be spelt out. Furthermore many European countries subsidize their artists, but the fall of French art is much steeper than we find elsewhere.

3. Why are there so few Internet cafes in Paris, and why are so few open Sundays? Demographics may be part of the answer here, since the Parisian French population is aging. And while the French minitel (a kind of ecommerce through the phone network) remains, it has not prevented robust French internet growth over the last few years.

It would be neat if one aspect of French culture, or the French economy, helped explain all three of these facts. I do not, however, expect such simple answers.

Price Controls and the Medicare Bill

I agree with Tyler that the special interest subsidies in the new Medicare law are outrageous, albeit to be expected. What really depresses me, however, is not the subsidies (which are mostly transfers) but that we are now on an inevitable path towards price controls on pharmaceuticals. True, the law as written explicitly forbids this but political pressure will burst that dam of parchment. (Recall that the original Medicare act forbid the federal government from exercising control over the practice of medicine – try telling that to a doctor today.) Costs will soar as increased demand pushes up prices and more people are added to the program and when this happens the public will demand controls. With controls you can expect significant curtailment of R&D in new pharmaceuticals. I only hope that the drugs that will help me deal with my old age will already have been discovered.

The new Medicare bill

I am growing tired of attacking this bill, but here is another good link, from The Boston Globe, for my other writings on the topic scroll down through the last two weeks. The authors write:

In the name of greater free-market competition, the legislation offers massive new subsidies to the pharmaceutical and insurance industries. In the name of providing greater protection, it threatens Medicare’s guarantee of universal benefits. (Indeed, it even provides more than $6 billion to support Health Savings Accounts outside of Medicare, risking the fragmentation of the broader insurance risk pool.) And in the name of greater cost containment, it encourages the expansion of private plans that have, to date, not saved Medicare money, while creating new budgetary rules that could very well make Medicare less equitable and affordable down the road.

Here is yet some more from this depressing story:

To be sure, politics usually requires compromises. But what’s shameful about the present bill is just how deeply the compromises — or, more accurately, the concessions to knee-jerk beliefs and private interests — undercut the stated goal of the bill: drug coverage for seniors. By our back-of-the envelope calculations, the roughly $400 billion in new spending over the next 10 years (not to mention the $140 billion in new premiums paid by Medicare beneficiaries themselves) will buy only about half as much coverage as a sensibly designed bill could. This is not only because of the subsidies for private health plans and for Health Savings Accounts, but also because of the higher overhead costs of private plans (about five to six times higher than for traditional Medicare) and the 20-to-30-percent higher prices for drugs that seniors will have to pay because Medicare is forbidden from using its bargaining power to negotiate better deals.

Indeed, a significant proportion of Medicare beneficiaries will almost certainly be worse, not better, off under the bill. This includes several million low-income seniors who will lose the generous coverage they now enjoy under state Medicaid programs. It also includes millions who already have pretty good drug coverage through their former employers — coverage which will likely be dropped, despite the bill’s subsidies for employers that retain coverage.

I don’t accept the authors’ implication that our main health care policy goal should be to subsidize seniors, most of whom are relatively wealthy. But it should not be to subsidize pharmaceutical companies either. Read the whole story to learn just how much special interests shaped the final legislation.