Month: February 2004

My favorite Haitian proverbs

Number one:

The constitution is paper, bayonets are steel.

Here is a list of some others. How about this?

The goat which has many owners will be left to die in the sun.

Or this:

Ignorance doesn’t kill you, but it does make you sweat a lot.

Another list offers what is surely a current thought of Aristide’s:

I give you a room and now you want my living room.

Here are some Haitian proverbs explained, some in scatological fashion.

George Bush could have used these two:

Pal franse pa di lespri pou sa.
To speak French doesn’t mean you are smart.


Li pale franse.
He speaks French. (A person likely is deceiving you)

In Praise of Borders

Borders Books and Music is tapping into one of the retail industry’s few remaining new frontiers – underserved urban neighborhoods – with stores in Detroit and Chicago…

Of the two projects, the Detroit store is probably the bigger gamble, if only because of the general absence of retail activity of any kind in the downtown area.

“Retail is lacking in downtown Detroit,” said Charles Maday, the chief executive of Exclusive Realty, a Detroit commercial brokerage firm. “All the retailers left. It’s the only major city that doesn’t have even a hardware store.”

A walk around the downtown area confirms that. It is impossible to buy even a T-shirt in downtown Detroit, let alone necessities like groceries or furniture.

Here is the full article. It is hard to believe there was a time when it was debated whether book superstores are a good thing.

The cynical will note that the project developer is receiving a tax break from the city.

Picasso at your local price club

Since last spring, the company has been selling fine art, including limited-edition lithographs by Pablo Picasso, Marc Chagall and Joan MirĂ³.

Greg Moors, an art dealer in San Francisco, began selling art at some of the company’s stores in brief experiments last spring, and for the last two months has been selling on the company’s Web site, The artwork is museum quality, matted and framed.

“There were so many double takes at the stores,” Mr. Moors said. “People stopped in front of these lithographs and said: ‘Wow! What is this?’ “

Mr. Moors sold 43 pieces of art during appearances at Costco stores – in the La Jolla area of San Diego, as well as Concord and Mountain View, Calif., and Issaquah, Wash. “I consistently did fairly well,” he said, “considering that people are coming in to buy hamburger and walking out with a $1,200 work of art.”

Get this:

Ms. Elsner said Costco applied the same pricing system to the art that it did to other goods, marking them up no more than 14 percent above what it pays Mr. Moors. He said his markup was “way below what retail galleries charge” but declined to be specific.

Tony Pernicone, an art appraiser who owns Avanti Fine Arts, a gallery in Larkspur, Calif., north of San Francisco, and previously directed the San Francisco Art Exchange and other art galleries, said: “At a legitimate gallery, generally the markup is 100 to 150 percent, depending on their overhead and the cost of the art. Obviously, you get galleries that try to go higher.” Costco’s price of $1,550 for a Chagall Bible Series lithograph was $500 to $1,000 less than a gallery would have charged, Mr. Pernicone said.

In other words, “non-dignified” intermediaries are entering the market and offering the goods at cheaper prices, thereby separating the artwork from the attached aura of the sale. Let’s root for the artwork, not the aura. Here is the story. Here is the web site, note they are temporarily out of stock. Here is the sort of work you can buy, albeit from another seller.

Teens really are less motivated

Teen brains show less activity in the regions associated with motivation, reveals a brain imaging study.

And adolescents may be more willing to engage in dangerous activities such as drink [sic] driving because this crucial part of their brain is under-developed, the US researchers suggest…Perhaps teens seek more extreme behaviours to achieve normal levels of stimulation in this brain region, he suggests.

Here is a longer discussion. I know I will receive hundreds, maybe even thousands, of angry emails from parents who cannot possibly believe this is true. But the reporting of science must progress, what can I say?

P.S. The skeptical may wish to note that the sample size is twelve teenagers and twelve adults for the study. But alas, no motivated teen wrote to tell me that.

Addendum: Randall Parker adds much more.

Read the numbers and weep

High-income Americans have lost much of their enthusiasm for free trade as they perceive their own jobs threatened by white-collar workers in China, India and other countries, according to data from a survey of views on trade.

The survey by the University of Maryland’s Program on International Policy Attitudes (PIPA) is one of the most comprehensive U.S. polls on trade issues. It found that support for free trade fell in most income groups from 1999 to 2004 but dropped most rapidly among high-income respondents — the group that has registered the strongest support for free trade. ”Free trade” means the removal of barriers such as tariffs that restrict international trade.

The poll shows that among Americans making more than $100,000 a year, support for actively promoting more free trade collapsed from 57% to less than half that, 28%. There were smaller drops, averaging less than 7 percentage points, in income brackets below $70,000, where support for free trade was already weaker.

The same poll found that the share of Americans making more than $100,000 who want the push toward free trade slowed or stopped altogether nearly doubled from 17% to 33%.

I believe that popular support for free trade has never been lower in my lifetime. Here is the full story, boo-hoo, here is the original research.

CD sales are up again

OK, Tower Records is bankrupt but demand for new CDs has been booming:

…a turnaround that began quietly last fall has become unmistakable with the success of Norah Jones’s new album, “Feels Like Home.” The CD, which recently sold more than a million copies in its first week in stores, helped extend a nearly consistent five-month string of industry growth, as measured by weekly sales compared with year-earlier periods.

There is more:

First-week sales of Ms. Jones’s new album were only part of the industry’s good news for seven-day period that ended Feb. 15. Through that period, the most recent for which data are available, album sales for the beginning of 2004 were up 13 percent from the comparable period of 2003, according to Nielsen SoundScan, which tracks music sales.

It was the biggest Valentine’s Day sales week since SoundScan began operating in 1991. And it was also the first week ever in which downloaded song sales topped two million.

Are illegal downloads really falling? I don’t trust any of the current numbers, but consider the following:

Even as download sales through Web stores like as iTunes are increasing, so is the number of people who illegally share music files, according to BigChampagne, which tracks file swapping. At the end of 2003, the most popular services for unauthorized file sharing had 5.6 million users, compared with 3.93 million a year earlier, a spokesman for BigChampagne, Eric Garland, said. Those users are now illegally trading about 250 million songs each week.

Here is the story.

My take: The baby boomers, with high disposable income, and fear of the law, are ascendant in the world of music. They are more likely to support a higher average quality of music, but less likely to support the next astonishing breakthrough. For that you need the younger kids in the market. Go Nirvana.

Is the earth seeding space with life?

Perhaps microbes are riding on specks of dust.

A grain less than a tenth of a millimetre across would still be capable of carrying microscopic life, says Napier. And the pressure of sunlight can quickly blow grains this small out of the solar system. The same force might one day propel spacecraft through the cosmos.

Such a grain could travel about six light years from Earth in 70,000 years – far enough to reach other stars. We could be surrounded by a huge ‘biodisk’ of frozen organisms floating on grains of rock, says Napier, all of which can wander in and out of our solar system quite easily. “The solar system is as leaky as a sieve,” he says.

Earth should spread its seed widest when we pass through a giant molecular cloud, a mass of dusty material from which stars are born. This has happened about five times since life appeared on Earth.

Each time, Napier estimates about three billion trillion microbes passed from Earth into the cloud. The chances of some of these finding their way to an Earth-like planet are quite high, he says. A similar process could even explain how the Earth wound up hosting life in the first place, he adds.

Panspermia is one of my favorite words.

Steve Levitt on sports

The Financial Times surveys the research of Steve Levitt on sports. Here is one succint passage:

In Europe, Levitt is feted as one of the authors of the “penalty-kick paper”. Probably only a trio of economists would have watched videos of 459 penalties taken in the French and Italian football leagues. The authors were testing a complex point of game theory. What they found was that the best place to put a penalty was the middle of the goal, largely because goalkeepers always dive. Yet few penalty-takers actually choose the middle. “I think one reason people don’t is that it’s just incredibly humiliating to a kicker if he kicks in the middle and doesn’t score,” guesses Levitt.

How about Levitt on Michael Lewis’s Moneyball?

There has been much hype recently about baseball clubs finding statistics to identify good players. Levitt read Michael Lewis’s book Moneyball about the supposed innovators, the Oakland As, and is unimpressed. “If you look at all the stats they say are so important, the As are totally average! There’s very little evidence Billy Beane [the club’s general manager] is doing something right.”

My recollection is that Lewis claims the small-market A’s put together a good team more cheaply, not that they win every pennant. In fairness to Levitt, a scrupulous researcher, perhaps this quotation is pulled out of context.

Thanks to J. Charles Bradbury for the pointer, check out his blog.

Buy Hoosier, Raise Taxes

In Indiana, Governor Joe Kernan canceled a $15.2 million dollar contract with a subsidiary of a Bombay headquartered company. The next lowest bid was $8.2 million dollars higher. Even if we accept (incorrectly!) the notion that trade restrictions create jobs the governor’s action will at best create some 50 jobs at an additional cost to Indiana taxpayers of $162,000 per job. Consider, both Indiana taxpayers and workers would be better off if the state government hired the Indians and gave 50 randomly chosen workers $100,000 to spend at their leisure.

See Stuart Anderson’s review of state legislation against outsourcing for more examples of Mercantilism in action.

The economics of carnival culture

Have you ever been to Trinidad? The steel bands (“pans”) start practicing sometime before Christmas, and the pan competitions peak at the time of Carnival, which we call Mardi Gras. Serious pan music is otherwise hard to find on the island, although we do see many smaller performances for tourists throughout the year.

We find a similar pattern in Brazil. The production of samba culture has an especially pronounced seasonal business cycle, again centered around carnival.

Carnival culture appears to have started for religious and cultural reasons, yet it persists more in some places rather than others. Why bunch your cultural production so tightly into one part of the year?

Carnival culture may prove efficient when a large number of the customers are tourists, who journey from other countries, or other regions, to an urban center. A high fixed cost of the journey implies it is better to bunch cultural production at one time of the year, to lower transport costs.

The significant presence of amateurs in production also encourages carnival culture. It is widely understood in Trinidad that many workers will take off extra time to practice the pans. The relevant time of year is an accepted social convention, plus everyone takes off at the same time, so the pan orchestras can practice together. After carnival, everyone is expected to go back to work at the regular pace.

The use of national competitions to market performers also increases the efficiency of carnival culture. When everyone competes at the same time, on a set of common stages, it is easier to declare a “winner,” and indeed carnival cultures usually emphasize such competitions and hand out national or regional prizes. The prospect of being a winner is then used to drum up local corporate support. If a company backs a carnival winner, it receives significant favorable publicity.

So enjoy your Mardi Gras today!

By the way, classical music has survived as a truly popular music only in Trinidad and Tobago, largely because it is played on the steel pans at Carnival competitions.

Outsourcing: an extreme scenario

Imagine a future where India has billions of people, they are all as productive as American workers, and they all will work for a penny a year (forget the possible contradiction between the last two assumptions).

Or imagine a nanotechnology machine that can produce the world’s output, and then some, for a nickel. If you wish, take this one step further. The machine produces robots, which compete with human labor, and cost only a penny a year to maintain.

The economics of outsourcing resemble the economics of technical change. Advanced robots would put many people out of work, just as computers have eliminated many jobs. Yet few people complain about this scenario, it is somehow emotionally more resonant to complain about “foreigners taking jobs” than to complain about “machines taking jobs.” Of course the empirical reality is that technology takes away (and also creates) many more jobs than do foreigners.

Now I am not going to give you the line “in the long run robots would create more jobs than they destroy.” For most plausible parameter values that is in fact true. But let us say that robots, or foreigners, could produce all of our current output for a mere nickel. Total wages, of course, could not exceed a nickel in such a scenario. Since this is below subsistence, no one would work for money (some wealthy capitalists might still work for fun).

If you are truly worried about outsourcing, you must have in mind something in this direction, albeit with less extreme parameter values. But as a perverse kind of reality check, consider the extreme case, how bad would it be?

National income would be enormous, the catch is that virtually all of it would go to capital. But capital is very very cheap. You need only save a nickel to command the equivalent of today’s global output. How many poor Americans today cannot save a nickel?

If you fear radical outsourcing you also should favor privatization of social security, with investment of the funds in the stock market. (Personally I am skeptical of the idea, but I don’t fear radical outsourcing either.) This would make us all very very wealthy.

Furthermore you should buy stocks immediately. If you are not devoting your portfolio to stocks, as rapidly as possible, and you fear radical outsourcing, you probably hold inconsistent views.

And of course you shouldn’t criticize the fiscal policies of the Bush administration, or call for a tax increase, if you think the stock market will skyrocket in this fashion.

Now I don’t ever expect to see parameter values so extreme. But neither do I expect that outsourcing will lead to a net destruction of jobs. The worrywarts wish to have it both ways. Outsourcing will be so significant as to take away American jobs, but not so significant to bring large benefits through the ownership of capital.

Link added: For this post I am indebted to conversations with Robin Hanson, and his paper on a robot economy.