Month: April 2006

Global Markets in Everything

Surrogate motherhood meets globalization.

When Reshma gives birth next month in this small
Indian town, the newborn will be immediately handed over to its
biological parents, non-resident Indians who live in London and who
have been unable to bear a child on their own. In return for renting
her womb, Reshma will be paid $2,800 – a significant sum by Indian

"These amounts are still nearly three times cheaper than what surrogacy in the UK would cost us," [the parents] say.

A little strange but I have a lot of respect for the surrogate mother and her husband:

"I have two cherubic children of my own," says
Reshma, who withheld her real name for fear of disapproval by
neighbors. "That couple has none. Imagine how much happiness this baby
will give them."

Reshma’s husband Vinod – not his real name – says
his paltry $50 montly pay as a painter would not be enough to educate
his two children. He says the extra money will allow him to invest in
his children’s education and to buy a new home.

Thanks to Pablo Halkyard for the pointer.

The future of ports and vessels

It is a fun game to write out only the last paragraphs of good books:

Where vessel size had once been limited by the locks in the Panama Canal, containerships had grown so large that twenty-first-century naval architects were constrained by the Straits of Malacca, the busy shipping lane between Malaysia and Indonesia.  If a containership ever reaches Malacca-Max, the maximum size for a vessel able to pass through the straits, it will be a quarter mile long and 190 feet wide, with its bottom some 65 feet below the waterline.  If it should sink, it will take nearly $1 billion of cargo with it.  Its capacity will be 18,000 TEUs, or 9,000 standard 40-foot containers, enough to fill a 68-mile line of trucks each time it arrives in port.  Where it will call is a serious question, because few ports anywhere are deep enough to accommodate it.  The answer may well be brand-new ports built in deep water offshore, with Malacca-Max ships linking offshore platforms and smaller vessels shuttling containers to land.  If they ever come about, these enormously costly ships and ports will create yet more economies of scale, making it still cheaper and easier to move goods around the globe.

That is from Marc Levinson’s The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.  Here is a link to Virginia Postrel’s post on the book.  Here is a photo of a Malacca-Max ship; sadly there is no elephant nearby.

Opposite Day: Axel on the FDA

Cousin Alex says the FDA is paternalistic.  Yah, it is paternalistic.  Paternalism is good. 

You know what would happen without vater FDA?  Herr Trudeau sells 1.5 million copies of Natural Cures "They" Don’t Want You to Know About, that’s what happens.  When left to their own thinking die volk swarms to an ex-con who has been banned from the airwaves by the FTC for marketing "Japanese" marine coral with claims that it can cure cancer, heart disease, high blood pressure, lupus, and other illness.  If it were up to me this guy would be jailed.  But the FTC can’t stop him from selling his book.  Silly first amendment.  Don’t you Americans know the truth is more important than free speech?

Libertarians say how can you trust people to make decisions about toothpaste but not about their own health?  Zat is an easy one.  No one buys toothpaste out of fear.  But sick people don’t think rationally they are emotional they hold out hope, even the kind of hope that "they" don’t want them to know about.  Father FDA must protect them.

Libertarians will respond that the tort law protects consumers from fraud.  Need I tell you who has the best book on the problems with tort law?

In defense of the university

I have never been much of a university-basher, and in my new book Good and Plenty I attempt to explain why:

The university also injects diversity into the broader societal discovery process. Faculty tenure is based on two principles: free inquiry and intellectual autonomy. Taken together, these principles also could be described by the less favorable sounding phrase "lack of accountability." A tenured faculty member simply is not very accountable to deans and department chairs. This absence of accountability, while it comes under heavy criticism, is part of the virtue of the university. The university works by generating and evaluating ideas according to novel and independent principles, relative to the rest of society. Direct commercial considerations drive most sources of ideas in society, including corporate research and development, commercial culture, advertising, and celebrity culture. The university is an alternative and complementary mechanism for producing and evaluating social ideas. In the university professors are, at least in theory, insulated from direct commercial pressures. Most academic rewards are determined by peer evaluation.

Tenure and non-accountability work especially well for a process that depends on intellectual or creative superstars. The average producer might use lack of accountability to shirk, or to pursue self-indulgent ideas of little value. But the superstars will use lack of accountability to pursue their own visions without outside hindrance. We like to think of "creative freedom" as good, and "lack of accountability" as bad, but in fact they are two sides of the same coin. If most of the value added comes from the superstars, the gains from their freedom may exceed the losses from the shirking of the average producer. Given that most artistic experiments are failures, effective discovery procedures often succeed by supporting the extremes, rather than trying to generate a good outcome in every attempt. 

Since we should evaluate institutions as a bundle, the excesses of the university, which include conservatism and overspecialization, should be seen as part of a broader picture. All methods of producing ideas involve biases. The question is whether these biases tend to offset or exaggerate the other biases — usually commercial — that are already present in the broader system. To the extent the biases are offsetting, the benefits of the university are robust. Counterintuitively, one of the great virtues of commercial society is its ability to augment non-commercial sources of support, including the university. Academic institutions, whatever their particular failings, increase the diversity of the social discovery process, including in the creative arts.

Caught my eye

1. This guy makes me look like a piker.  Imagine an obsessive quest to rate and blog every taco stand in Los Angeles.  Thanks to for the pointer.

2. Barry Eichegreen surveys views of the U.S. trade deficit.  Full of substance, recommended.

3. Renowned Szechuan chef Peter Chang has just moved China Gourmet restaurant in Fairfax, Lee Highway.  Ask for the Chinese menu and don’t forget the Dan Dan noodles.

4. More on welfare economics: "wanting" is not always "liking."

5. Here is a new argument that there is no real estate bubble.  In fact it is argued some homes may be underpriced.  The key is to compare housing prices to rents on comparable homes, not rents on apartments.  But can’t a bubble in the asset market distort prices in the rental market?

6. Entomologist John Losey estimates "the economic value of insects," but hey good insects eating bad insects ought to net to zero, no?  A bit of marginalism would not go amiss either.

The best two sentences I read last Thursday

Of course, in dreaming of arriving on butterfly wings, Bonnard could
not have known that young artists in the year 2006 would operate in a
commonplace world of budget air travel, proliferating art fairs and
museums for contemporary art, where peripatetic pilgrims encounter
endless objects once and mostly never again. This, the artist and
writer Art Spiegelman pointed out to me recently, may be the biggest
change in art during the last half-century or so: that more and more
artists make works they never expect will be lived with, looked at day
in, day out by the same person; that much art is made for fairs or
museums, designed to grab a distracted passerby’s attention without
needing to be experienced twice.

Here is the story, which is about the new Bonnard exhibit in Paris.

Wolf on the Global Economy

Brad Setser points to Martin Wolf’s extensive powerpoint slides on the global economy.

  • The first set covers financial flows to emerging economies and the crises of the past few years.
  • The second
    covers emerging market (and central) financing of the US current
    account deficit and the global savings glut/ investment drought.
  • The third covers Martin Wolf’s policy recommendations – his suggests for changing the international financial system. 

How to fight corruption

Football referees in Nigeria can
take bribes from clubs but should not allow them to influence
their decisions on the pitch, a football official said on

Fanny Amun, acting Secretary-General of the Nigerian
Football Association, said bribery was common in the Nigerian

"We know match officials are offered money or anything to
influence matches and they can accept it," Amun told Reuters on

"Referees should only pretend to fall for the bait, but make
sure the result doesn’t favour those offering the bribe," Amun

Here is the full story, and thanks to David (not Tom) Williamson for the pointer.

How to cook blackened fish

Grind fresh white pepper and black pepper in equal parts, and add about three times as much red chili powder, alternatively red cayenne pepper.  Put in fresh thyme, basil, and oregano, each in parts roughly equal to the white or black pepper.  Pour melted butter over your uncooked fish.  Rub in the spices.  Cook the fish rapidly over high heat, as high as you can manage, in butter, hoping to create a crust by searing the spices.  It is yummy even if you fail to create the crust, squeeze on lemon at the end.