Month: November 2004

My talk as reported by The Hindu

“His ideas might give most art lovers, especially the die-hard supporters of the culture cause in Bengal, more than a sleepless night. But Tyler Cowen, Professor of Economics at George Mason University in the United States, firmly believes that Beethoven, Mozart, Bach, Leonardo da Vinci and even Shakespeare were businessmen and is willing to prove it.

“They were all businessmen, they wrote for money. Art and commerce have always been linked. The countries that have been commercially well off have been leaders in the arts and we have to embrace that. There is nothing evil about marketing,” says Dr. Cowen, who was in Delhi to attend the Liberty and Society Seminar organised by the Centre for Civil Society this past week.

While equating Beethoven with a businessman might be hard to digest for those who believe that creativity can never be commercial, the professor’s thoughts on globalisation will also not fit into their book as ‘acceptable’.

First, he claims that globalisation does not lead to homogeneity of cultures but encourages heterogeneity and will help endangered forms of art, an argument which is neither “Right” nor “Left”.

“I don’t think that India has anything to worry about on the count of culture. It has a vibrant culture; it has a great food culture too. India is growing and the purchasing power of people is also increasing. There is more foreign culture that is coming into India, but India has always had the ability to integrate different influences from the Mughals to the British and make it distinctly Indian. The earlier styles were a fusion of culture from Persia, China, but always with an Indian touch,” he says.

With the market forces better developed in the modern world, it is easier for craftsmen as well as artists to reach their consumers that would help in preserving the traditions of the past — an angle that might escape most people. But one that Dr. Cowen points out in his book, “In Praise of Commercial Culture”. “There would be areas where diversity would have gone down, but there is enough evidence in the 65 countries that I have travelled that in most areas like literature, paintings and music it has increased. Globalisation has led to the system of notation to be used in Indian classical music, which will preserve music for longer. If the stuff is good, people will buy it, I bought about 20 CDs of Indian classical music myself. I know everyone is not like I am, but I am pretty optimistic about classical music,” he remarks.

A “hero” that most commercial Hindi movie directors would love, his theory resemble the ideas they have been have been selling for years. “I know people criticise Hindi movies saying that it is not like Satyajit Ray. But I think that they require as much talent as a Ray film. They have a dreamlike quality, similar to Shakespeare. It appeals to universal human emotions and everyone wants to fall in love,” he adds.”

Poll Positions III

It’s past midnight for me, but we have some reasonable data so far: Bush will likely win the popular vote because Kerry did worse in the Gore states and Bush will either tie or win the Electoral college with about 275-285 votes. Ohio might tighten as the morning wears on and absentee ballots/early votes are counted. The massive number of absentee/early ballots in New Mexico might flip the state to Kerry. So I’ll wait till tommorrow to see the final EC count, but I can safely say the following…

The following folks were right:

1. The final round of pre-election polls by major news organizations and the reputable polling organizations. If you average them, you got a Bush lead – not huge – but it was there. Individual polls were wrong, but the batch was right as a whole.

2. The Iowa Electronic Markets up till Monday. The Bush vote share was selling at $.51 – probably close to final number.

3. My sociology undergraduates (scroll down to the “Poll Positions II” post below) collectively predicted a clear Bush popular vote win. The students predicted about 49.7% for Bush. They might have done better if they had not overestimated the Nader vote.

The following folks were wrong:

1. Fabio Rojas. Following the incumbent rule, I believed that the undecideds would go for Kerry. I was wrong. Plain wrong. [Note: There is a slim chance that my electoral college prediction might come true.]

2. John Zogby – Early on election day, polling world demi-god Zogby predicted a Kerry blow out. Even if Kerry wins the electoral college, it might be because of slim Kerry win in Ohio and the New Mexico lead evaporating for Bush. Kerry could take the day, but not because he won the popular vote.

3. Exit polls. I tell people that I have a very low opinion of exit polls. They are often poorly executed and are easy to misread. Today is yet another peice of evidence against exit polls.

4. Iowa electronic market on tuesday. There was a short panic when Kerry contracts sold for more than Bush contracts. I guess some traders panicked when they heard about the exit polls. Shame on them!

That’s it for now. Now back to our normal blogging at Marginal Revolution…

Poll Positions II

More election day fun:

1. In exchange for some extra credit on their upcoming exam, I asked students in my two classes to guess what the popular vote breakdown will be today. As a good rational choicer, I only give the points for accurate predictions. I averaged their predictions: 49.7% Bush, 48.7% for Kerry and Nader gets 1.9%. Let’s see how the Indiana Extra Credit Market pans out tomorrow…

2. Dave from Colorado (see item #7 in yesterday’s post) got someone to write in Vernon Smith in Washington DC. Good going, Dave!! Anybody want to write in either Tyler or Alex?

Should you vote?

Jordan Ellenberg says yes and offers some mathematics in response to Steve Landsburg. He sees a voter in a swing state as having a very real chance of being decisive. Economists, of course, are known for their long-standing insistence that your vote has virtually no chance of swaying an election.

My take:

This entire debate goes down the wrong lines. Let us start with a simpler question. Should you always make decisions by considering your marginal product alone?

Let’s say you were asked to join a firing squad of ten expert marksmen, all shooting at an innocent man, and so good they never miss. Still, they want a louder execution with eleven bullets instead of ten. In return they will donate five dollars to your favorite charity. Should you join and shoot?

Most of us would say no, even though your bullet has no chance of changing the final outcome. Once you buy this conclusion, it is easy to see why people might vote. Most moral judgments reflect some mix of estimated marginal and average products, not just marginal products alone. In part morality means the ability to take a longer-run, universalizable, or more rules-based perspective. So you need not feel guilty if the economist tells you not to vote. Maybe you are not rational in one sense of the word, but surely having a disposition to be moral can be justified.

That being said, voting may still be a mistake.

The best argument for not voting is the following: in lieu of voting you should earn extra income and donate it to the very poor. Or perhaps take the day off and work at the soup kitchen. After all, why should voting be the most important collective good you can contribute to? And even if voting has a special importance, maybe you should work harder, earn more money, and use the funds and your time to get other people to vote. Spend a day driving people to the polls rather than voting, for instance. [Or donate to the poor in India and write a blog? Alex]

It does not suffice to talk about doing both voting and charity; substitution at the margin is always possible. You might think that voting is relatively cheap, but so is helping Indian beggars.

Another argument against voting involves holding the meta-rational belief that you are unlikely to improve upon the collective wisdom of others. Your chance of figuring out how to help the poor probably exceeds your chance of picking the right candidate. Of course few people will admit this.

Overall I view voting as a selfish act, usually done for purposes of self-image. But this has some altruistic and some non-altruistic ramifications.

I fondly recall Gordon Tullock’s point: “The paradox is not why people vote, but why everyone doesn’t vote for himself.”

New economic history project

This sounds wonderful:

EH.Net Encyclopedia of Economic and Business History is designed to provide students and laymen with high quality reference articles in the field. Articles for the Online Encyclopedia are written by experts, screened by a group of authorities, and carefully edited.

Here is the prestigious advisory board.

Thanks to Brad DeLong for the pointer.

Poll Positions

The biggest show in town is about to start – the 2004 Presidential election. A few thoughts before voters go to the polls:

1. As Dan Drezner likes to say, nobody really knows what will happen tomorrow. National polls show a tight race and they swing more than the Count Basie Orchestra. The state polls fare no better. Even if you average the state polls, either candidate has a slim to non-existent lead in key states like Ohio and Florida. When the outcome may depend on what happens in a small number of regions, unpredictable factors come into play – like ballot design, weather, road traffic and political rumors.

2. However, as a social scientist who uses surveys, I really should make a guess. My safe prediction: Kerry will score between 48.5% to 49.3% while Bush scores 48.0% to 48.8%. The rest goes to Nader, Badnarik and other 3rd parties. Why? Undecided voters often – but not always – break for challengers. Right now, Real Clear Politics has Kerry scoring about 47%, which is based on averaging polls from major news organizations and reputable independent polling firms like Zogby, Pew and Rasmussen. Estimate about 2/3 of the undecided 4% going for Kerry and you get my predictions like mine.

3. Going out on a limb: I predict an electoral college tie. Bush gets his old states, Iowa, Wisconsin and New Mexico but loses Florida and New Hampshire to Kerry. Consider unusual leads for Bush in Iowa and Wisconsin and it’s not such a crazy prediction. You heard it here first!!

4. As the resident Iowa Electronic Market junkie at MR, I’ve been watching the contract prices everyday. For a long time, the market has been slightly bullish on Bush vote share and very bullish on Bush getting the most votes… until tonight. The last time I checked in, “Kerry wins” is going for about $.509 while “Bush wins” is going for $.487. The vote share market is still mildly pro-Bush. With the Redskins win and the Iowa market moving a little toward Kerry, we just might be starting four years with John and Teresa.

5. Skeptical about the electronic market? So is Farhad Manjoo, a writer for In a nicely written four part series (click here), Manjoo describes his foray into the Iowa electronic market. At first he thinks it’s run mainly by republican traders but he soon realizes that when you bet your own money you are more likely to focus on the underlying forces behind elections, rather than noise. Did George H.W. Bush really blow the election by looking at his wrist watch during his first debate with Clinton? Probably not, but the economy was the likely culprit. Fanjoo isn’t a convert to electronic markets, but he seems to appreciate a basic feature of markets. I think this is the key point – markets aren’t perfect, but people will probably try harder when there is something at stake.

6. Please check out Mystery Pollster, a wonderful blog about the intricacies of polling. He answers all your questions about likely voter models, cell phone users and much else. Informative, professional and clearly written. Highly recommended.

7. Vote switching scheme: I got an email from a certain Dave in Colorado. He asked if I could help him vote trade. He’ll vote for Kerry in Colorado if the other person writes in a neo-classical economist for president. The choices are: Milton Friedman, Vernon Smith, Ed Prescott, Douglass C. North, Gary Becker, James Buchanan, or Ronald Coase. Interested parties should contact bonsaidave1776 ++ at ++ aol dot com.

That’s all for now!

Excuse Me, Bob, We Don’t Bowl Alone

Political scientist Robert Putnam made news a few years ago with Bowling Alone, where Putnam claimed that American community has been in decline. Putnam’s book draws its title from the following passage:

Whether or not bowling beats balloting in the eyes of most Americans, bowling teams illustrate yet another vanishing form of social capital… league bowling, by requiring regular participation with a diverse set of acquaintances, represented a form of sustained social capital that is not matched by the occasional pickup game.

Tim Hallett, a colleague of mine, his dissertation advisor Gary Alan Fine and graduate student Mike Sauder decided to see if people really bowled alone. They recently published a summary of their findings in the magazine Society. Fine, Hallett and Sauder write: “As occasional bowlers – although not in leagues – we asked a simple question: Do Americans really bowl alone, and what, if anything, does it mean?”

To answer that question, they went bowling and observed over 800 bowlers at six Chicago area bowling alleys. What did they find? Less than 1% of the people seen bowling actually bowled alone. In interviews, only 13% said they had bowled alone during the past year. What about those loners? Were the solo bowlers introverted and anti-social? To the contrary, 12 out of 22 interviewees who admitted to bowling alone did so to practice so they could do well in bowling leagues. In other words, bowling alone correlates with being in a bowling league.

To be fair, Putnam himself admitted bowling might be social. But he seems to have underestimated the social side of modern bowling. A lot of bowling alleys throw parties and turn their lanes into disco style social clubs. It is also common for all kinds of clubs and groups to socialize at bowling alleys. So maybe bowling leagues are on the decline, but Americans don’t bowl alone.

Lead, IQ and the Wealth of Nations

Ever notice that the politically correct attack any discussion of IQ as unscientific and racist, until the discussion turns to lead? Merely mention lead and the liberals will readily quote studies (for once correctly) showing that even low levels of lead can reduce the IQ of children by 4 to 7 points. For some reason, the objections of test bias, multiple intelligences, and racism disappear in this context.

Here is a New York Times article noting that most of sub-Saharan Africa continues to use leaded gasoline, despite findings from Africa and elsewhere that lead causes higher levels of strokes, heart attacks and other ailments as well as reducing children’s IQ.

Would it be racist to suggest that the recent trend to ban leaded gasoline in Africa could eventually lead to higher economic growth as well as better health?

Will every election be a tight one?

The well-known median voter theorem suggests that the two major party candidates should adopt arbitrarily close positions. The left- and right-wing parties each move just short of the center to pick up swing voters. It also suggests that elections should be extremely close. The former prediction is clearly falsified (there are real differences between Bush and Kerry), but the latter was not the last time around. Endogenous voter participation, of course, can account for both results. Elections will be very competitive but without policy convergence. If a candidate moves too close to the center, his base decides to stay at home.

Of course few past elections have been very very close, Goldwater and McGovern being two cases in point. Parties may have strategic reasons to run suicide candidates, or primaries may not reflect a rational decision-making process. Candidates also may misjudge which strategy maximizes the number of expected electoral college votes.

But will candidates and parties make these mistakes in the future? Don’t parties care about electability more than ever before? Doesn’t information technology (not to mention betting markets) give us an unparalleled measure of voter opinion? Shouldn’t we take the postulate of hyper-competitive political markets seriously?

The pessimist might suggest we are entering a future where most Presidential elections are arbitrarily close. In other words, the courts would choose the President every time, to the detriment of democratic legitimacy. Over time we might assign this task to an elected governmental body more decisive than the Electoral College, such as the Senate.

Alternatively, voters might have reasons to rebel against a tendency for very close elections. Some voters simply want someone to win (lose) by a clear margin. Other voters like to say they supported the victor. Perhaps Bush is campaigning in some Kerry states (e.g., New Jersey) simply to appear as a likely winner and thus capture these votes.

An article in the Hindu Times suggested that all the American undecideds will break one way or the other before the election, giving us a landslide for one candidate. If that is the case, some portion of the vote is inherently winner-take-all. Political choices will remain “lumpy” in certain regards and our future will remain (quasi-) democratic. This likely means that each candidate will be playing a gambling strategy across alternative non-median policy positions. Political competition can look as perfect as can be on the supply side, but the demand side can force politicians to take strategic chances. The median voter will still go home at night fed up. Not to mention the non-median voter, such as yours truly.