Month: February 2006
I know little about how a port is run (try Matt Yglesias and Dan Drezner for contrasting perspectives), but my take is simple. If Arabs have a role in running our ports, we will, rightly or wrongly, be more worried about port security. Might we institute tougher inspection requirements for containers? If the deal is approved, I predict port safety will go up, and this would be in lieu of a rather stagnant status quo. Perhaps we should go further and send some equity shares in the Port of Baltimore to Osama bin Laden, no? The funny thing is, if you haven’t been reading MarginalRevolution for a while, you probably think I am joking.
How long will it take before China cracks up?
To most Western observers, China’s economic success obscures the predatory characteristics of its neo-Leninist state. But Beijing’s brand of authoritarian politics is spawning a dangerous mix of crony capitalism, rampant corruption, and widening inequality. Dreams that the country’s economic liberalization will someday lead to political reform remain distant. Indeed, if current trends continue, China’s political system is more likely to experience decay than democracy. It’s true that China’s recent economic achievements have given the party a new vibrancy. Yet the very policies that the party adopted to generate high economic growth are compounding the political and social ills that threaten its long-term survival…
The Chinese state remains deeply entrenched in the economy. According to official data for 2003, the state directly accounted for 38 percent of the country’s GDP and employed 85 million people (about one third of the urban workforce). For its part, the formal private sector in urban areas employed only 67 million people. A research report by the financial firm UBS argues that the private sector in China accounts for no more than 30 percent of the economy. These figures are startling even for Asia, where there is a tradition of heavy state involvement in the economy. State-owned enterprises in most Asian countries contribute about 5 percent of GDP. In India, traditionally considered a socialist economy, state-owned firms generate less than 7 percent of GDP.
Here is much more, and I will go on record in agreement. More specifically, how about a bone-crunching, bubble-bursting, no soft landing, Chinese auto crash-style depression within the next seven years? This is also my biggest worry for the U.S. economy, I might add.
If you are not convinced, raise your right hand and repeat after me: "China in the 20th century had two major revolutions, a civil war, a World War, The Great Leap Forward [sic], mass starvation, the Cultural Revolution, arguably the most tyrannical dictator ever and he didn’t even brush his teeth, and now they will go from rags to riches without even a business cycle burp." I don’t think you can do it with a straight face.
Had I mentioned that Yana and I are going to Shanghai in April? I’ll ask you all for tips when the time comes. I hear MarginalRevolution is banned there…
I once wrote:
Some time ago, [Mancur] Olson started work on the fruitful distinction between a stationary and a roving bandit. A stationary bandit has some incentive to invest in improvements, because he will reap some return from those improvements. A roving bandit will confiscate wealth with little regard for the future. Olson then used this distinction to help explain the evolution of dictatorship in the twentieth century, and going back some bit in time, the rise of Western capitalism.
I have never found this approach fully convincing. Is the stationary bandit really so much better than the roving bandit? Much of Olson’s argument assumes that the stationary bandit is akin to a profit-maximizer. In reality, stationary bandits, such as Stalin and Mao, may have been maximizing personal power or perhaps something even more idiosyncratic. Second, the stationary bandit might be keener to keep control over the population, given how much is at stake. He may oppose liberalization more vehemently, for fear that a wealthier and freer society will overthrow him.
If you look, in fact, at emergency room statistics, you’ll see that more people are admitted every year for non-dog bites than dog-bites–which is to say that when you see a Pit Bull, you should worry as much about being bitten by the person holding the leash than the dog on the other end.
This article is a good introduction. Beneath the fold you will find an excerpt with an interesting example of the power of photographs…
Scott Cunningham directs our attention to "The Piracy Paradox," a new law and economics paper on the economics of fashion. The authors argue that the fashion sector has more innovation because of its near-absence of copyright protection. Here is some brief background on the issue.
Fashion is a status good. You wear a new design if some other people do (it must be focal as an object of status), but not if too many other people do. You want some degree of exclusivity to your wardrobe. So let’s say a new design comes out. There will be some early adopters, but then a rapid series of rip-offs from other companies. Once the rip-offs come, companies invest in making further designs. Fashion is ephemeral and the rip-offs spur the next round of innovation. (BTW, here is an economic model of innovation in the fashion sector, and here are some common-sense critiques. Here is a piece on the ethics of fashion copying.)
Ex ante, the companies invest in production capacity. They don’t know if they will be copied or copiers, but the costs and benefits wash to keep normal rates of return. There is more to the argument but read the paper if you are interested. By the way, the authors claim that European fashion industries receive much more copyright protection, but do not seem to be more efficient.
Micro question: For this model to work, what underlying assumptions are needed about the costs of design relative to the dollar flow of fashion demand? A low ratio of fixed to marginal costs? A lingering cache from having been the first with a new style? Here is one unconvincing attempt to answer the question; do tackle this in the comments if you have further ideas.
The authors list a few other areas where copyright protection is weak or non-existent: food recipes, furniture design, tattoos (until recently), trendy hairstyles, and perfume scents. I would add to the list calligraphy, topiaries (I love that word), and chess games. The point is not that these can serve as models for the music or movie industries but rather to figure out how they differ and why the absence of IP protection has led to (apparently) acceptable results.
Here is the legal reasoning why fashion is not well-protected.
From Cory Doctorow at Boing Boing Blog:
A CBS undercover reporting team went into 38 police stations in Miami-Dade and
Broward Counties in Florida, asking for a set of forms they could use to
complain about inappropriate police behavior. In all but three of the stations,
the police refused to give them forms. Some of the cops threatened them (on
hidden camera, no less) — one of them even touched his gun.
officer: Where do you live? Where do you live? You have to tell me
where you live, what your name is, or anything like that.
tester: For a complaint? I mean, like, if I have —
officer: Are you on medications?
tester: Why would you ask me something like that?
officer: Because you’re not answering any of my questions.
tester: Am I on medications?
officer: I asked you. It’s a free country. I can ask you that.
tester: Okay, you’re right.
officer: So you’re not going to tell me who you are, you’re not going to tell
me what the problem is.You’re not going to identify yourself.
tester: All I asked you was, like, how do I contact —
officer: You said you have a complaint. You say my officers are acting in an
officer: So leave now. Leave now. Leave now.
I can’t bring myself to excerpt any part of this article on the ever-tasteful MR. You might think there are no surprises left in this category but even I found more than I had been expecting. And at least five of the sentences in the article made me laugh. Thanks to www.2blowhards.com for the pointer.
Knowledge may have its purposes, but guessing is always more fun than knowing.
That Auden bit is cited in the new and fun The World in a Phrase: A Brief History of the Aphorism, by James Geary. While we are on the topic, here are Auden’s aphorisms on reading. Here are his aphorisms on writing. Here are the aphorisms Auden selected and edited into book form.
Geary also offers three aphorisms by Chateaubriand:
An original writer is not one who imitates nobody, but one whom nobody can imitate.
As long as the heart preserves desire, the mind preserves illusion.
Love decreases when it ceases to increase.
I’m not convinced by Tyler’s arguments against polygamy. Let’s clear away some misconceptions.
First, it’s important to note that polygamy (specifically polygny) not monogamy is the norm in human society – some 75% of the known human societies have approved of polygny.
Second, we sometimes look around the world, note that polygny is approved of in societies such as Saudi Arabia that are not exactly women-friendly and conclude that polygny must be against the interests of women. The problem with this argument is that most societies with monogamous marriage have also not been women-friendly. Women can’t drive in polygnous Saudi Arabia but they couldn’t vote in monogamous United States until circa 1920, nor could they easily get a credit card in their own names or easily go to law school as late as the 1960s.
The basic economic argument that polygny increases the demand for women – under polygny Bill Gates can have two wives which by demonstrated preferences makes at least the second wife better off – suggests, but does not prove, that polygny can favor women. (Consider polyandry – would men complain if Angelina Jolie could have two husbands?)
Third, let’s consider Tyler’s argument that polgyny reduces investment in children. It is true that to the extent that polygny increases the number of any particular man’s children that his attention will be divided. But there are two counter effects. First, there is a selection effect. The men with more children will be the wealthier and healthier men – the better providers. If polygny increases the number of children that Bill Gates (oh what the hell my wife doesn’t always read the blog, or me!) has then average child quality over society as a whole will increase.
Moreover, if child quantity is the problem then that problem ought to be addressed directly. Does Tyler support a tax on children ala China?
Also, Tyler puts too much attention on the man. Polygny probably increases the fertility of the polygnous man but it also decreases the fertility of the polygnous woman (not by as much as it increases the fertility of the man because women are already much closer to the physical limit on children than are men but by an appreciable amount), thus the attention of mothers will increase.
Aside: Tertilt argues that polgyny decreases investment but on the basis of a model which combines polygny with many other factors such as brideprice being paid to the bride’s male relatives – this would not apply in the contemporary United States. (It also appears to me on a quick reading that the Tertilt argument may commit the Junker fallacy.)
Polygny could be very well suited to a modern society in which women work. Working women already contract out child care services – a second, stay at home wife, is not that different.
Polygny will be bad for poor men who lose out in the competition for
first wives to rich men who are on their second. This already happens,
by the way, because of serial polygamy – older men divorce their older
wives and marry younger ones leaving older women unmarried and some
younger men without young wives. Bad for the young men but not
necessarily bad for the young wives. For this reason it’s probably
true that polygny cannot be countenanced in a democracy. At least not
until the supply of young men is reduced enough so that every many can
have at least one wife even if some can have two.
On the whole, therefore, I see no strong arguments that banning polygamy (either polygny or polyandry) is socially optimal but due to the power of the patriarchy I don’t expect polygny to be approved of in the United States any time soon.
Comments are open.
1. A few of the best restaurants are Pierre Gagnaire, Taillevent, Le Cinq, and perhaps Guy Savoy. Most critics might put Gagnaire as number one.
2. Michelin "two-forkers" are quite good, but you must book to get in. In general you can’t get a seat in a decent Parisian restaurant unless you either book or show up at opening. If you are wandering around looking for good food at 8:30 p.m., or for that matter 1 p.m., you are unlikely to do well.
3. In The Louvre, spend an hour in the Poussin room and also obsess over Watteau’s Voyage to Cythera.
4. In Musee d’Orsay, gaze at Courbet’s Origin of the World (sorry, I can’t link to the image on a family blog but do Google it) and Puis de Chavannes, in addition to the usual delights.
5. Go see the medieval tapestries at Musee Cluny.
6. Spend a few hours walking the main roads of the Left Bank. Start at Invalides and take the major arteries through to the Islamic Center. Walk, walk, walk.
7. Watch The Triplets of Belleville and spend hours walking through the (rapidly gentrifying) working-class neighborhoods of the Right Bank. The Metro is splendid but it robs you from seeing the greatest walking city on earth (Buenos Aires is number two). Don’t take it. Walk, walk, walk.
8. Go into a good cheese shop and spend $40. Focus on the weirder cheeses. Buy the non-pasteurized delights. Sit down with a baguette and some fruit as well, finishing the meal with small squares of outrageously priced dark chocolate. Throw in a sausage for good measure. Keep the cheese leftovers in your room at night and eat them for breakfast the next day. And the day after that. See how many days they will keep, you will be surprised.
9. Rue de Bussi and thereabouts has a convenient collection of cheese, fruit and bread shops, and it is in an excellent part of the Left Bank.
10. Internet Cafes are hard to come by. You must rely on the dumpy area near Centre de Pompidou. I find Paris to be the hardest city to blog from.
11. See a "world music" concert from Algeria, Madagascar, or the Congo. Or try contemporary music at IRCAM.
12. Here is my previous post My Favorite Things French. Douse yourself in Godard films before going. Start with Breathless, Band of Strangers, and My Life to Live.
13. If you want to read recent French social science (if you can call it that), try Bruno Latour’s We Have Never Been Modern, Jean Baudrillard, Alain Badiou’s Metapolitics, and Gilles Deleuze’s Anti-Oedipus. Don’t get too upset if these books only make intermittent sense. At least they are alive. For a recent hit novel, try Houllebecq’s The Elementary Particles.
Comments are open, and I encourage all of you but especially John Nye and Barkley Rosser — both Paris experts — to make a few suggestions for my friend.