Month: April 2005

Views I hold without much evidence

1. China will someday just get up and attack Taiwan.  Recent progress aside, how many rational decisions have Chinese governments made in the last six hundred years?  And its inability to get over the idea of conquering Taiwan will stop China from democratizing anytime soon.  I am not in general a "China hawk," but I view Taiwan as, sadly, a goner.  I remain amazed by how many "liberal" Chinese simply think Taiwan is "theirs."

2. High-quality American high school students study too much and have too many extracurricular activities.  Yes, I am thinking zero-sum game.  It would be better for most of them to go out and get jobs bagging groceries.  They would learn more about the real world.

3. Shaquille O’Neal is the greatest NBA player ever, bar none.  (Well, OK, there is some evidence for this.)

4. The first two Star Wars installments (yes, that includes the one with Jar Jar Binks) were excellent, and will someday be recognized as such.  Maybe you view those films as engaged in excessive pandering.  I see them as a Bildungsroman (Anakin/Darth) which makes few concessions to popular taste and also presents public choice theory in sophisticated fashion.  Lucas simply doesn’t care if the films make no sense in stand-alone fashion, nor should he.  By the way, in the interests of personal safety, I’ve decided to limit my number of car trips before May 19.

5. High-quality barbecue (alas, not available here in Virginia) is better than most expensive French restaurants.  And I love most expensive French restaurants, especially when someone else is paying.

6. Aesthetic judgments are, in principle, objective rather than arbitrary.

New blog project: avian flu

I have started a new blog project, this time on avian flu.  Go visit  If you write a blog, and enjoy MR, please link to this new endeavor, if only as a courtesy.

Avian flu looms as a real danger, so I thought it important to set up a single-site resource for information on the topic.  Right now the blog is mostly informational, but over time there will be more emphasis on appropriate public policy responses to avian flu.  That is, if avian flu spreads.

Here is the mission statement of the new blog.

Don’t worry, MR will continue as you know it.  Avian flu is a group blog, and I will post there only at times.  Right now the very smart Silviu Dochia is a major poster.  Randall Parker of will post sometimes, and Alex promises an occasional post or two.  More bloggers may be assembled, depending how the issue develops.

I have longer-range plans to set up (but not write for) blogs on other single issue topics, sometimes on very short notice or lasting for very short periods of time.

It’s odd to start a blog that you hope nobody reads, but that is what this is.

Your comments and suggestions would be most welcome.  And if you would like to submit a guest post to the new blog, please contact Silviu through the website.

Does it cost more to take care of the young or the old?

…some economists are sanguine about the country’s ability to support
the elderly and at the same time provide for the young. Gary Burtless,
a senior fellow at the Brookings Institution, noted that the decline in
fertility rates since the 1960’s means that the burden of caring for
the young has decreased dramatically – freeing resources to channel to
the old.

The overall burden on the employed will grow, but not
to unprecedented levels. The ratio of people of working age to those
either under 20 or over 65 will decrease to 1.2 in 2050 from about 1.5
today. But this is still an easier load than in 1965, when the country
was awash with children, and the ratio of the working-age population to
each dependent was only 1.1.

True, the young are cheaper to
maintain than the old. In 1990, economists at Harvard and M.I.T.,
including David M. Cutler and Lawrence H. Summers of Harvard, estimated
that people over 64 consume 76 percent more than children.

Mr. Burtless estimated that in 2050 a worker will have to sacrifice
49.6 percent of his or her wages – through taxes or other means – to
maintain society’s dependents. That is nearly 6 percentage points more
than in 2000, but it is merely 0.8 percentage points more than 1965.
And the percentage could well be smaller if people work later in life
to pay for more of their keep.

The notion of incredible
competition between what the public spends on the aged and what it
spends on the young is driven by fear, Mr. Burtless said. "But so far
the fears have not been grounded," he said. "In fact, we seem to be
able to do both kinds of things. Increase spending on aged and protect
spending on the young."

This is the most hopeful notion I have heard in some time.  Here is the story.  Here is the home page of Gary Burtless.

Let us not forget about the utility dimension in addition to the fiscal.  Is it more fun to care for the very young or the very old?  The evidence is not so clear cut.  Many people do not enjoy their children as much as they claim; read more here.

Rich Man, Poor Man; Rich State, Poor State

Statistical Modeling, Causal Inference, and Social Science is one of my favorite new blogs.  It is primarily written by Andrew Gelman, a professor in the Departments of Statistics and Political Science at Columbia University.

A recent post looks at the difference between red and blue states and red and blue individuals.  We all know that in the recent election poorer states tended to vote Republican while richer states tended to vote Democrat.  On the basis of the famous maps many people jumped to the conclusion that poorer individuals were voting Republican (Nascar Republicans) while richer individuals were voting Democrat (trust fund Democrats).  But the inference is a fallacy, the ecological fallacy.  In fact, high-income individuals, as opposed to high-income states, vote Republican with greater likelihood than low-income individuals (the effect is not huge and it may be declining but it is significant).   

It’s even true that rich counties tend to vote Republican with greater likelihood than poorer counties.  Gelman links to this graph which nicely illustrates the ecological fallacy.  The three lines show that within each state higher-income counties are more likely to vote Republican but when you look between states the correlation between income and voting Republican is negative.  (Click to enlarge).




The Ricardo effect

The United Arab Emirates says it will use robots as jockeys for camel races from next season.

The move comes after widespread international criticism of the use of young children to ride camels during the long and often hazardous races.

Aid workers say there are up to 40,000 child jockeys working across the Gulf. Many are said to be have been kidnapped and trafficked from South Asia.

The issue of child camel jockeys has been an embarrassing one for the Emirates, says the BBC’s Gulf correspondent Julia Wheeler.

Read more here, and thanks to Dylan Alexander for the pointer.

Addendum: Geekpress offers a photo.  And here is yet another photo, with an excellent quotation, courtesy of a new and excellent blog on the Arab Emirates.

DeLong on Hazlitt

Brad DeLong criticizes Henry Hazlitt’s Economics in One Lesson.  First, "because at least half its pages hint that the works of John Maynard
Keynes are an abomination without ever grappling with the Keynesian

Hazlitt did not say much about Keynes in his famous introduction to economics but he certainly grappled with the Keynesian argument in his lesser-known
The Failure of the ‘New Economics’: An Analysis of the Keynesian Fallacies

Second, DeLong quotes Hazlitt:

There are men regarded today as brilliant economists, who deprecate
saving and recommend squandering on a national scale as the way of
economic salvation; and when anyone points to what the consequences of
these policies will be in the long run, they reply flippantly, as might
the prodigal son of a warning father: "In the long run we are all
dead." And such shallow wisecracks pass as devastating epigrams and the
ripest wisdom.

According to Brad this quote is "dishonest" and a "misrepresentation," but Keynes did deprecate saving and recommend squandering.  Famously:

To dig holes in the ground,” paid for out of savings, will increase,
not only employment, but the real national dividend of useful goods and
services. (General Theory, Ch. 16).

Brad seems to think that Hazlitt quoted Keynes out of context because "What Keynes actually wrote in his Tract on Monetary Reform" was:

Now ‘in the long run’ this [way of summarizing the
quantity theory of money] is probably true…. But this long run is a
misleading guide to current affairs. In the long run we are all dead.
Economists set themselves too easy, too useless a task if in
tempestuous seasons they can only tell us that when the storm is long
past the ocean is flat again.

But the misreading is Brad’s not Hazlitt’s.  Keynes is criticizing classical economics for focusing on the long run and this certainly includes the classical focus on savings as a key to economic growth.  Hazlitt, as Brad notes, is restating classical economics so when Hazlitt points out the long-run problems with using spending to increase short-run aggregate demand, Keynes does, in effect, reply "We are all dead in the long run."

For some, it seems, one lesson is not enough. 🙂

Do we have too many *ideas* to choose from?

Mark Steckbeck (his blog is very good) writes:

Barry Schwartz believes that Americans suffer from too many choices. (PDF file) The result is that we become overwhelmed with too many choices, become depressed, and consequently lead less fulfilling.

I’m certain that Schwartz did not mean that there are too many ideas from which to choose to believe in, but why not? It’s overwhelming listening to political ads during campaigns or editorials and stories on major topics in newspapers. As Ronald Coase said, the reasons for regulating markets for goods is no different than the reasons for regulating markets for ideas, execpt that there’s probably more reason to regulate the latter.

I wonder which ideas Schwartz recommends we eliminate from the set from which we choose.

Markets in *everything*

Cataracts cloud her eyes and arthritis stiffens her spine, but Maria Luisa Torres, 70, still walks the streets of the Merced selling her body, as do many elderly women in the downtown heighborhood…Among the thousands of prostitutes in North America’s largest city are hundreds of women in their sixties, seventies and eighties who continue to sell themselves to earn cash to buy food or medicine…

Some of the prostitutes are eighty-five years old.

Men know she is not young, but she chooses to think that "an antique can be more valuable than something new," she explained.  She strolled through Jardin Loreto, a nearby park, saying to passing men: "Amor, vamos?" or "My love, shall we go?"  After agreeing on a price — often $5 or less — she leads her customer to one of the many run-down hotel rooms nearby.  She has been doing this for decades, since she left the coconut fields in Western Mexico.  At first she had higher hopes and opened a little sandwich kiosk.  But "not even a fly would stop" at her stand, and she turned to the only sure money she could find.

Here is the full story.

What do we know about tipping?

1. Two studies show little relationship between quality of waiter service and size of tip.

2. Hotel bellboys can double the size of their tips, on average, by showing guests how the TV and air conditioning work.

3. Tipping is less prevalent in countries where unease about inequality is especially strong.

4. The more a culture values status and prestige, the more likely that culture will use tipping to reward service.

5. Tips are higher in sunny weather.

6. Servers can increase their tips by giving their names to customers, squatting next to tables, touching their customers, and giving their customers after-dinner mints. (query: how do lap dances fit into this equation?)

7. Drawing a smiley face on the check increases a waitress’s tips by 18 percent but decreases a waiter’s tips by 9 percent.

8. In one study, waitresses increased their tips by 17 percent by wearing flowers in their hair.  In general it pays to look distinctive albeit not freaky.

Here is the link.  Some of the information draws on studies by Michael Lynn of Cornell.  Here is his home page.  Here is his page on tipping.  Here is his advice on how to increase your tips; he asks that you tip him for it.  Here are his dogs.

My questions: Is tipping any harder to explain than why we don’t just leave the restaurant without paying?  Given that (almost) everybody tips, is the final incidence more or less neutral for the customers?  Do we tip, in part, to produce the illusion of control over how we are treated?