Month: November 2004
Dan Akst is that rarest of breeds, the man of letters who also knows something of business and economics. His first novel, St. Burl’s Obituary was called "outrageous", "superb", "masterful" and was short-listed for a Pen/Faulkner award. His second novel, The Webster Chronicle also earned great reviews. Publishers Weekly called Terry Mathers, the "memorable protoganist" of The Webster Chronicle, "wise, flawed, and all too deeply human."
Now ordinarily you wouldn’t expect anyone capable of writing a deeply human character to be at all good at economics. Dan, however, also writes an excellent economics column for the New York Times and periodically writes for also The Wall Street Journal, Slate, and NPR’s Marketplace. Dan’s economic journalism combines economics, politics and history with great writing. Here, for example, is one of Dan’s recent pieces from the Wilson Quarterly. Called Buyer’s Remorse it begins, "There are two things at which Americans have always excelled: One is
generating almost unimaginable material wealth, and the other is feeling bad
about it." I am also fond of an older piece of Dan’s on digital cash, called The Soul of a New Currency.
We are delighted to have Dan guest blogging with us beginning on Monday.
John Quiggin offers some time management tips over at CrookedTimber.org. I’ll second his call for a daily "word quota", but express horror at his notion that you should ever devote a morning to "8-10 jobs that ought to take 5 minutes each."
Here are my suggestions:
1. There is always time to do more, most people, even the productive, have a day that is at least forty percent slack.
2. Do the most important things first in the day and don’t let anybody stop you. Estimate "most important" using a zero discount rate. Don’t make exceptions. The hours from 7 to 12 are your time to build for the future before the world descends on you.
3. Some tasks (drawing up outlines?) expand or contract to fill the time you give them. Shove all these into times when you are pressed to do something else very soon.
4. Each day stop writing just a bit before you have said everything you want to. Better to approach your next writing day "hungry" than to feel "written out." Your biggest enemy is a day spent not writing, not a day spent writing too little.
5. Blogging builds up good work habits; the deadline is always "now."
I’ve recently been reading about the work of Felix Gonzales-Torres, an artist in the 1990’s who made a big splash in the art world. Like many artists, he really loathed the art world and the system of galleries, museums and universities but he ultimatey realized you have to deal with the world of art professionals if you want an income or recognition for your work.
So how do you make art that will sell but at the same time says f*** you to the art world? The solution: create works of art that literally will disappear but sell the right to reproduce the work. Two of his more well known works: piles of posters that gallery visitors can take with them or chunks of candy the viewers are encouraged to eat. I always wondered how you can make money with such art, until I learned that his gallery sold a certificate giving the "owner" the right to reproduce the work anytime they want.
The work is ingenious – the materials themselves were aesthetically interesting (such as anti-violence posters) and at the same time undermined the idea that there is a single "piece of art" like a drawing or painting. It’s also egalitarian – in remaking the work, the "owners" are supposed to give away the work for free. But here’s the biggest irony: by selling these certificates, the artist has switched from one form of ownership to another. Gonzales-Torres stopped selling physical objects and developed intellectual property rights for his work. He passed away in the 1990s from AIDS, but I wonder if he would have taken a cue from Linux and Java to develop some kind of subversive open source art.
For the next week (Monday-Friday), I will be guest-blogging over at WSJ.com, the on-line edition of The Wall Street Journal. The on-line Journal usually requires a subscription and password, but for this coming week it will be open to everyone. I will pass along the direct link once it is up and open, but you can find it by going through the Economy section, starting sometime early on Monday.
The blogging will be a set of exchanges with John Irons. John has a Ph.d. in economics from MIT and writes for the blog Argmax.com, one of the earliest and still most useful economics blogs. He now works at the Center for American Progress. I would describe his perspective as further to the left than mine, so you can expect to see some vigorous disagreement, but perhaps a few areas of unity as well.
We will, of course, continue to offer you content on MR as well, plus we will be welcoming a new guest-blogger.
1. My hosts retitled my lecture "Globalization Destroying the World Culture."
2. I arrived on time but the talk started over ninety minutes late. Even after the midpoint of the talk, more people were filing in.
3. I was put on a dais at least twelve feet high. A large purple, gold, and pink ribbon was pinned on me, perhaps to indicate I was the speaker.
4. Everyone listened with absolutely rapt attention, but it seemed only the communists understood much English.
5. Those same communists were greatly agitated about American world hegemony and the onset of "Hollywood lesbianism" in India.
6. Before speaking I was fed a delicious fish and shrimp curry in Bengali mustard sauce.
The Indian magazine The Week (Nov.7 issue) polled 1,274 people in ten cities, and found that Indira Gandhi remains a political idol.
69 percent of the people wish they could vote for her today.
54 percent believe that she would go to war with Pakistan over Kashmir.
47 percent approve of "The Emergency," her suspension of civil liberties; only 38 percent oppose it.
67 percent believe that the Nehru-Gandhi family should be in politics.
Indira’s two greatest achievements are seen as victory in the 1971 Indo-Pak war and nationalizing the banking system.
Here is my previous post entitled "Are Indian Voters Irrational?"
My question: Does Karl Rove understand Indian politics better than we think?
I’ve seen statistics that domestically produced films capture up to 95 percent of the Indian home market. While I’ve always doubted the veracity of the numbers, there is no doubt that most Indians prefer Indian movies. But might this change in the foreseeable future?
I see two reasons to be (relatively) pessimistic about Bollywood. First, theaters in the wealthier suburbs show a higher percentage of Hollywood movies. A look at the Delhi movie pages showed an English language presence of about one-third, although one of these movies (the fun Bride and Prejudice) was Indian in its cast and partly in style. Removing that movie would bring the total Hollywood presence down to about a quarter.
If India continues to develop, the Hollywood style might find greater favor with the new middle class. It is in the rural areas where Indian films capture the entire market, and of course development brings urbanization.
Second, movie traditions based upon music usually protect their home markets well against foreign competition. Musicals don’t travel well abroad, and the production of music has long been more decentralized than the production of film. But for how long will Indian film remain a dominant means of marketing Indian music? Won’t radio, cassette players, CDs, MP3s, and other innovations capture an increasing share of the music market in India? (Recall that in the U.S. movies often generated hit songs forty years ago, today they hardly ever do.) And if music becomes less central to Indian movies, will those movies then prove more vulnerable to Hollywood or perhaps other external suppliers?
If Hollywood becomes more important within India, will cultural diversity go up or down? Many Indians will have more choice but a national tradition would become weaker. And Bollywood is not the entirety of Indian cinema. Bollywood often outcompetes the more regional Indian issues, such as are filmed in Tamil. If you were a small-scale regional Indian moviemaker, would you rather compete with Hollywood or Bollywood?
Charles R. Jenkins, the Vietnam deserter who fled to North
Korea nearly 40 years ago but was recently returned to Japan with his Japanese
wife (who herself had been kidnapped by the North Koreans), was demoted,
dishonorably discharged and given a 30-day prison sentence. It’s seems a remarkably light punishment for
a deserter. On the other hand, Jenkins
has been living in a prison, without heat, hot water or electric lighting for
nearly forty years It’s hard to see how
we could punish him more than that. It’s unfortunate so many innocents continue to rot in the prison that is North Korea.
Daniel Ben-Ami has a nice essay at spiked-online about environmentalist thinking (click here). He notes that since the Enlightenment people have thought that human progress comes from mastery over nature and from being more productive, but many environmentalists think that human well being is harmed by being more productive. It’s an important point that leads to some real policy differences. If you think that we have too many green house gases, then you have two choices: stop manufacturing or learn to manufacture without as much pollution. Too many environmentalists opt for the first choice, which is bad because so much of the world’s poor look to gain from industry. Ben-Ami notes this as a disturbing trend among certain segments of the green movement – too many are calling for roll backs of technology, rather than searching for better and cleaner technology.
Colin Camerer, George Loewenstein, and Drezen Prelec have produced the longest and most substantive survey article on neuroeconomics to date. For those of you familiar with the basic methods, the punchlines start on p.30.
Neuroeconomists don’t just do brain imaging. Most generally they study how the human nervous system interacts with economic phenomena.
What is the bottom line to neuroeconomics? Does it offer new (and valid) predictions?
Wikipedia makes an ambitious claim:
…neuroeconomics may lead to significant changes in how we educate children, plan finances, manage employees, react to advertising and marketing, elect politicians, regulate government and industries, prove guilt beyond a reasonable doubt, select courtroom juries, monitor terrorist threats, and much more.
Neuroeconomics, in its current state, is most effective at helping adjudicate outstanding normative controversies. Do ads brainwash or inform us? When are savings decisions made on the basis of long-term planning? Which parts of the brain help us choose politicians? Do we allocate money the same way we allocate time? Think of neuroeconomics as a measuring device rather than a new body of theory. Look for better and more reality-tested answers to extant questions, not novel predictions, at least not yet.
Over time neuroeconomics will make our theories less universal and more context-dependent. This development will prove most important for normative economics and policy analysis, where realism is at a premium. If you’re still talking about how Friedman 1953 and how plants maximize received sunlight, neuroeconomics won’t make you very happy.
What I would want most: A testable neuroeconomic theory of why risk premia vary over time in securities markets. But that is very far away.
Here from an earlier post are Tyler’s ideas for a second term. Good ideas all. Keep your fingers crossed.
1. Eliminate all farm subsidies, tariffs, quotas and price supports.
2. Tell Western Europe it is paying for its own defense from now on.
3. Admit that the Medicare drug prescription bill was a mistake. Repeal it, and consider a revenue-neutral benefit that does not discriminate against prescription drugs. Introduce means-testing for Medicare to stop that program from bankrupting us. I would rather cut this benefit than repeal the tax cuts [tax shifts, correctly, though spending discipline could turn them into real tax cuts.] The long-run benefits of greater capital accumulation remain significant.
4. Negotiate bilateral free trade agreements as rapidly as possible. Start with Japan, the second largest economy in the world.
5. Strengthen America’s commitment to science. This will have implications for educational policy, immigration policy, and regulatory policy. Don’t restrict stem cell research. Hope that science comes up with affordable and politically sustainable solutions for global warming and clean energy independence. You might have libertarian objections to science subsidies, but the realistic alternative today is more government intervention.
6. Strengthen early warning systems against infectious diseases. Increase research into cures, vaccines, immunity, and the like. We don’t want the world to lose fifty million people to avian flu or some other malady.
7. Take in more immigrants, but demand higher levels of skills and education. At the very least, take in any revenue-positive immigrant.
8. Abolish the Department of Education.
9. Abolish the Department of Energy.
10. Repeal all corporate welfare.
11. Repeal the corporate income tax. Repeal the Alternative Minimum Tax. Admittedly these are “ifs,” depending on fiscal considerations.
12. Get on TV and tell the nation that a free economy is a critical source of our strength. Tell them you mean it, and then mean it. Economic growth is the greatest long-run gift we can give to the world.
I mean outsourcing from Bangalore, not outsourcing to Bangalore. Apparently production costs are rising out of control in a city that accounts for a third of India’s software exports. The major culprit is congestion; a seven-kilometer commute can now take ninety minutes. Population has grown by a third since 1995, and the new metro and airport are badly behind schedule. Bombay has had similar problems.
The remedy? Madras (Chennai) is rising in popularity as is Calcutta, despite its propensity to elect communist governments.
The bottom line: Indian infrastructure is chaos. This economy has only a limited ability to absord outsourcing ventures. For instance it is common for current enterprises to supply their own electricity and other public services.
I have drawn on conversations and the November 1 Business Week.