Month: March 2006

George Mason in NCAA and Economics

by  Tyler Cowen in

This new Slate.com piece is by Alex and Pete Boettke.  They give away all of GMU’s secrets, or at least a few.  Excerpt:

What’s remarkable is that GMU’s freewheeling basketball team and its
free-market academic teams owe their successes to very similar,
market-beating strategies. GMU has excelled on the court and in the classroom by daring to be different.

Read the sidebar for a discussion of faculty, including yours truly:

GMU remains an underdog in both basketball and economics. But Coach
Larranaga has a plan to succeed in the long term and so do GMU’s
professors. Click here to read about how GMU is seeking out different new kinds of undiscovered geniuses.

They are too modest only about themselves.

Caught my eye

by  Tyler Cowen in

1. The Selfish Gene, thirty years later, transcript and audio file.

2. Inside Man.  I’ve been burned by Spike Lee movies too many, oh so many times, but this one is excellent.  It is also a study in game theory and the value of meta-rationality.  While we are on the topic, how did I forget Live and Let Die – the only good Roger Moore James Bond film — on my list of notable movies set in Louisiana?

3. Charles Murray on his new book and plan for welfare reform.  An interesting idea, but can you say "time inconsistency" three times in a row fast?

4. James Surowiecki on why newspapers are not doomed.

5. Don’t expect too much from job retraining.

6. Steve Levitt’s Africa fact of the day, and yes it involves both sex and violence.

7. Stanislaw Lem passes away; could his Solaris be the best science fiction novel ever?  Don’t forget the Tarkovsky film version either.

Taxing Families

by  Alex Tabarrok in

Libertarians usually point to government as the source of high taxes.  But in many developing countries it’s the family that is most taxing.   In his amusing account of a "year in Casablanca," The Caliph’s House, Tahir Shah recounts what happens when his workers lost their homes and moved into his palatial estate.

I began to witness firsthand the ancient employment system of the East.  It’s sometimes known as "living off Abdul’s job."  As soon as someone gets work, everyone else gives up their jobs and leeches off the employed member of the family.  The longer you are employed, the more money you need, merely to support the hangers-on.  Anyone with a nice home and full-time job has a vast cast of characters living off them.

Before there were governments there were families that taxed (see Schoeck’s classic Envy: A Theory of Social Behavior for "taxation" in primitive societies).  Creating a market economy is about much more than eliminating regulation.

Addendum: Michael Greenspan has another nice illustration from Rhodesia.

Should we evaluate cultures by their peaks?

by  Tyler Cowen in

The most common benchmark uses “peaks” to compare one culture to another. Government funding is praised, for instance, for having supported Bach, Velàzquez, and Edmund Spenser. The same invocation of peaks has been used to compare “the moderns” to “the ancients.” We might ask what modern composer compares to Beethoven or what modern poem measures up to Homer’s Odyssey. Or we might ask "Which age has produced the best symphony?"

Why should the greatness of the best composer, or the best poet, be the relevant unit for judging a culture? What if one culture (modernity?) produces lesser creative titans, but produces many more of them? How are we to weigh the quality of the peak versus quantity of the total?

It is also an open question what is the right unit for judging a peak. Instead of looking at the highest peaks, we could judge an era by how good its "one hundred best composers" are, or by the aesthetic worth of its “best five thousand hours of music.” Or consider a peak of a different kind: “How many excellent musical genres does an age have?” By these standards, contemporary times fare better, vis-à-vis the era of Beethoven, than if we just compare the best composer from each period. We have many talented composers today, in many different musical fields, even though today’s best composer is not the equal of Beethoven.

Why the focus on a single artistic work and its greatness? Mozart’s Don Giovanni has musical beauty, terror, comedy, and a sense of the sublime, making it a favorite of opera connoisseurs. But what if consumers draw their comedy from one work, their terror from another, their beautiful music from yet another, and so on? Artistic peaks typically bundle qualities together. Yet arguably a world with unbundled qualities is superior, since it allows consumers to pick and choose how much of each quality they want, and from which source.

We cite “peaks” when making an aesthetic assessment because they are relatively easy to observe and talk about. Few individuals know much about eighteenth century culture except for its peaks. But the peaks standard remains incomplete. The notion of a peak does not correspond to how much aesthetic value is produced in an era or to how much that value is enjoyed.

That is from my Good and Plenty: The Creative Successes of American Arts Funding.  Comments are open…

Paul Krugman on immigration

by  Tyler Cowen in

On TimesSelect:

I’m instinctively, emotionally pro-immigration. But a review of
serious, nonpartisan research reveals some uncomfortable facts about
the economics of modern immigration, and immigration from Mexico in
particular. If people like me are going to respond effectively to
anti-immigrant demagogues, we have to acknowledge those facts.

First,
the net benefits to the U.S. economy from immigration, aside from the
large gains to the immigrants themselves, are small. Realistic
estimates suggest that immigration since 1980 has raised the total
income of native-born Americans by no more than a fraction of 1
percent.

Brad DeLong reproduces more text, along with cosmopolitan commentary.  I would also stress the benefits of a relatively free and prosperous Mexico on our southern border.  The path is not without further bumps, but Mexico has turned the corner.  Without high immigration, remittances (second biggest "export," I believe), and the spread of liberal democratic ideas, Mexico probably would have been much worse off.  In the long run this will prove hugely beneficial to the United States, and of course to the rest of Latin America as well.

Tyrone wants to ask the cosmopolitan the embarrassing question: "At some margin immigration slots are scarce.  Why are we wasting them on relatively wealthy Mexicans?"

National self-interest may provide a partial answer.

Good & Plenty, part one

by  Tyler Cowen in

Here is an excerpt from chapter one of my new book: Good & Plenty: The Creative Successes of American Arts Funding, due out in a week:

Moving to yet larger questions, we cannot have a coherent political philosophy without bridging the gap between economic and aesthetic perspectives.  For instance critics charge that liberalism cannot satisfy the higher aspirations of the human race.  They compare liberal government to an innkeeper who looks after his guests but otherwise has little to offer in the way of vision or a common loyalty.  On the international scene, the U.S. is often seen as a military and economic behemoth, but as lacking in concern for cultural values or beauty.  I wish to put this picture to rest, and to reclaim America’s rightful role in offering a liberal vision for beauty and creative human achievement. 

I will use arts policy to begin a new sketch of a liberal state.  The public sector can encourage a proliferation of diverse cultural outputs and in that regard offer a rich menu of life-enhancing options.  At the same time, we do not have to abandon the values of free speech and neutrality across (non-coercive) competing lifestyles.  All of this can be done in a manner consistent with prosperity and other economic objectives.  A state – in particular the American state — can be involved with matters aesthetic without losing its liberal character.  We also will see that, counterintuitively, a rich diversity of artistic achievement is compatible with the ideas of cultural centrality and the use of culture to bind a polity together.

Summary paragraph:

I write with one foot in the art lover camp and with another foot in the libertarian economist camp.  I try to make each position intelligible, and perhaps even sympathetic (if not convincing) to the other side.  I try to show how the other side might believe what it does, and how close the two views might be brought together.  Furthermore, I use the fact of persistent disagreement as a kind of datum, as a clue for discovering what the issues are really about. 

You will get some more specific passages soon.

Transparency vs. generality

by  Tyler Cowen in

The cause of classical liberalism as a really existing possibility for
political reform has been harmed by bundling free markets with a ban on
transfers. This package deal has influenced people who think justice
requires transfers to eschew free markets. If we had spent the last
forty years hammering away at liberal fundamentals like transparency
and generality instead of the natural right to not be taxed, our
society would now be closer to the free market, limited government
ideal.

That is from Will Wilkinson, commenting on Asymmetrical Information.  I am personally a bigger fan of transparency than generality, noting that the two often conflict.  What if only some people need helping?  The best policy response won’t be perfectly general, nor should we force it to be. 

Many fiscal conservatives argue that Medicare should be a welfare program and not for all old people.  If you wish to argue that it must be universal to be adequately funded, you are giving up on transparency but holding on to generality.   

Will’s paragraph makes me wonder whether value of transparency is, or ever can be, transparent.

Jane Galt’s health plan

by  Tyler Cowen in

Have the government pay for all health care expenditures above 15% of
adjusted gross income, and cover 100% of health care expenditures by
people living under 200% of the poverty line.

This preserves the market in most health care services–happy HSA
advocates! It is progressive, and provides universal coverage–happy
single-payer advocates! It directs coverage to those who really need
it–the very sick–without a middle class subsidy–happy Jane! And it
preserves market prices for almost everything from hospital beds to
surgical procedures, since a significant fraction of the market will be
paying their own way. That keeps the government from having to set
prices, which as Soviet Russia showed us, is generally a bad idea. Most
importantly (from my perspective) it preserves the market for
innovations in drugs and medical equipment.

Here is the full post.  My guess is that this needs to be defined across wealth rather than
income, if only to a) cover the retired elderly, and b) prevent people
from tanking their incomes when family members get sick.  It could
therefore resemble extreme means-testing for Medicare, one of my
favorite ideas.  Except it would treat young and old on the same plane.

One worry I’ve had about means-testing is the implicit tax hike on wealth creation.  How
steeply would this implicit tax rise, as health care consumes a growing percentage of gdp?  And when suppliers are charging the often-identifiable eligibles (what percent of the population lies below 200% of the poverty line, and how do they dress?), what kind of controls must we impose on the contracts?  Would any doctor or hospital down here in Cajun country have free prices?  If the government set prices too low, would these noble crawfish-boilers end up with greater access to care?

Addendum: Read her post on why HSAs and single-payer plans are unlikely to lower health care costs.  Second addendum: Read Arnold Kling as well.

Taxes by the Mile

by  Alex Tabarrok in

Fuel-efficient vehicles are cutting into gas tax revenues.  As a result, some states are  experimenting with per-mile tax systems.  In Oregon, an experimental system uses GPS to monitor how many miles a car drives.  Drivers are then charged an appropriate road tax when they fuel up.

In this case, leviathan’s hunger has some benefits.  The current system breaks miles down into rush hour and non-rush hour which allows for improved congestion pricing.  But more generally, there is no reason why the tax, insurance and road pricing systems cannot be fully-integrated.   Aaron Edlin and Pinar Karaca-Mandic point out
that tort law does not fully internalize accident costs.  A fuel tax
helps but since the externality is
per-mile not per-gallon a per-mile tax is more efficient.  Insurance by the mile is also more efficient than the current system which subsidizes heavy users.  Finally, GPS can be used to price by the road and not just by the time of day.  Indeed, as pricing by the mile/road becomes more common, the idea of private for-profit roads will no longer seem so radical.

My favorite things Louisiana

by  Tyler Cowen in

Ah, to be on the road again…  Most of my reporting from Louisiana will likely appear in another venue (links in due time); for now you must be content with these notes:

1. Favorite song: King Porter Stomp, by Jelly Roll Morton.  I didn’t think about this one much, though many Louis Armstrong songs are fair contenders.  To sort through music more generally would take hours.  In addition to jazz, Cajun music, zydeco, and "swamp pop," there is Jerry Lee Lewis, Leadbelly, Mahalia Jackson, Little Walter, Buddy Guy, Lucinda Williams, and yes Britney Spears.

2. Movie, set in: Southern Comfort remains underrated.  Interview with the Vampire was better than expected.  Water Boy has a few funny jokes.  There is also Streetcar Named Desire (not my thing), Big Easy, The Drowning Pool, The Apostle, and last but not least The Blob was filmed in Abbeville. 

3. Writer: I don’t much like Truman Capote, though I can see he was important at the time.  John Kennedy Toole is a good pick, don’t forget Kate Chopin, plus I will confess a weakness for the best of Anne Rice; Witching Hour and Lasher are my favorites.  Elmore Leonard rounds out a strong category, and I am likely forgetting some notables.

4. Artist: John James Audobon did some of his work in Louisiana, plus he was born in Haiti.  Does that count?  Clementine Hunter is one pick from the Naives.  Here is another picture by her.

5. Dish: Boudin blanc or peppered, boiled crayfish.  Overall I prefer the simple rural food to the New Orleans Creole style and its heavier roux-based sauces. 

6. Architecture: There are many wonders, try this typical and not even extraordinary house from the Garden District.

The bottom line: Riches await you here.

The 20 most important tools ever

by  Tyler Cowen in

Here is the Forbes list.  Only hand-wielded tools count, so the knife is number one and the abacus is number two.  Number twenty is the chisel, leave further suggestions in the comments.  It is not politically correct to wonder about "the whip," but how would it fare on a pure utilitarian calculus, realizing of course it gets animals to do the work?  Maybe "the stone" is not sufficiently handmade, but how else did they cut umbilical cords?

Thanks to Eric and Kathleen for the pointers.

MR as viewed through Bloglines

by  Tyler Cowen in

The ever-vigilant Chris Masse points me to how MR looks through Bloglines.  It doesn’t seem to give the reader access to comments.  Nor can the reader access posts which "lie beneath the fold."  If you know why this is, please tell us in the comments.  In the meantime, we alert you to the regular existence of comments, and posts beneath the fold, and encourage you to visit our real page or use another blog reader.