Month: May 2006

What is new and essential in political philosophy?

That is for the last 25 to 30 years; here is the collective wisdom of CrookedTimber commentators.  The picks are good ones, but I’ll predict the lasting work for (if not in) political philosophy will come from some other direction entirely.  How about neuroscience, experiments, or evolutionary psychology?

I’ll run a similar query soon about economics, with open comments of course.  Get your thoughts ready.  If you leave a comment today, restrict yourself to political philosophy.

The KGBs Use of Knowledge in Society

In Knowledge and the Wealth of Nations, David Warsh notes in passing a bizarrely ironic use of markets by the Soviet KGB.  It is 1984:

The Cold War is entering its climatic phase.  There are war fears at the highest levels of government.  In London, KGB agents have been directed to track the spot price offered by blood banks by officials worried that a sharp rise would be a signal that the West was preparing to mount a surprise attack.

Conservative Rock Songs?

National Review’s John Miller is crazy to think that there are any conservative rock songs, an oxymoron if ever there was one.  Nevertheless here is his list of the top fifty with commentary.  Below is the top ten.  I would have put Rush’s Trees and Red Barchetta  closer to the top of the list.  2112 was my first introduction to Ayn Rand.  Rock on.

  1. "Won’t Get Fooled Again," by The Who.
  2. "Taxman," by The Beatles.
  3. "Sympathy for the Devil," by The Rolling Stones.
  4. "Sweet Home Alabama," by Lynyrd Skynyrd.
  5. "Wouldn’t It Be Nice," by The Beach Boys.
  6. "Gloria," by U2.
  7. "Revolution," by The Beatles.
  8. "Bodies," by The Sex Pistols.
  9. "Don’t Tread on Me," by Metallica.
  10. "20th Century Man," by The Kinks.

Hat tip: J-Walk Blog.

The blockbuster bestseller is dying

The average number of weeks that a new No. 1
bestseller stayed top of the hardback fiction section of the New York
Times Bestseller List has fallen from 5.5 in the 1990s, 14 in the 1970s
and 22 in the 1960s to barely a fortnight last year — according to the
study of the half-century from 1956-2005.

In the 1960s, fewer than three novels reached No. 1 in an average year; last year, 23 did.

Here is the link, the pointer was from Alex. To repeat my standard mantra, the evidence shows we are moving away from a winner-take-all society, not toward it.

Did the Soviets run a chess cartel?

Steve Levitt told us that sumo wrestlers cheat.  Are you surprised that Soviet grandmasters did the same?  They were expected to take certain deliberate draws against other, or sometimes even throw a game, so as to ensure that a given tournament would be won by a Soviet and not by a foreigner.  Bobby Fischer had alleged this for years, now economists Charles Moule and John Nye offer some evidence.

Here is my previous post on the work of John Nye.

Gustave Flaubert

"Of all possible debauches, travel is
unsurpassed by any I know. It’s the one invented after all the others
have ceased to excite."

Gustave Flaubert, letter to Ernest Chevalier (April 9, 1851)

Here is the permalink, from Terry Teachout’s blog.  Did I mention that I fly to Goa tomorrow, monsoons permitting?  I’ll have two days of pure vacation there, so your tips are welcome…comments of course are open…

Henry Paulson defends the dividend tax cut

Here is the closest I find to a formal economic argument from the man.  In this WSJ Op-Ed,  if my eyes catch the fine print correctly, Paulson argued that the Bush dividend tax cuts will add 5 to 20 percent value to the stock market.  (Here is my source, though I cannot find a permalink.  And here is my source’s critique of the idea, although on this screen my old eyes cannot read it.) 

I’ve never understood the Paulson argument for two reasons.  First, at least in theory paying dividends should lower the value of the firm, relative to capital gains, given the higher dividend tax rate at the time.  Dividends would appear to shift around the form in which wealth is held, pulling it from one pocket to another, rather than increasing wealth.  I am the first to admit the entire topic of why dividends are paid is poorly understood, but that uncertainty does not militate in favor of targeting dividends for early and primary tax cuts.  I would sooner cut or abolish the corporate income tax, for instance.

Second, for any given level of government spending, the wealth effects of the dividend tax cut (if those effects exist in the first place) are a transfer to equity holders and from….?  Well, that remains to be seen.  Stay tuned for your forthcoming tax increase…Some of you, that is…

Addendum: I should make the broader point that this pick is probably very good news.

The culture that is French, a continuing series

One of France’s most popular rappers will appear in court today charged
with offending public decency with a song in which he referred to
France as a "slut" and vowed to "piss" on Napoleon and Charles de
Gaulle. Monsieur R, whose real name is Richard Makela, could face three
years in prison or a €75,000 (£51,000) fine after an MP from the ruling
UMP party launched legal action against him over his album Politikment

Here is the full story.

My views on global warming

1. It is by now pointless to deny that global warming is man-made to a considerable degree.

2. It is a very real problem.  If you don’t believe me, go visit the deltas of East Bengal or Bangladesh and think about it again.  Sweden I am not worried about and Greenland may become valuable, but where do we put the losers and no this isn’t just a few small islands in the Pacific.

3. I can imagine Manhattan and other major cities taking protective action against rising water levels, much as the Dutch do today.  I recall reading that the Dutch spend about as a high a percentage of their gdp defending themselves from water as the U.S. does on national defense.  That is quite a burden, but it is better than forsaking economic growth.

4. Like Arnold Kling, I do not much trust climate models.  Perhaps I have spent too much time doing macro, and the experience carries over.  Nonetheless uncertainty about final effects gives us more to worry about, not less.  It is the worst-case scenarios for global warming which worry me, not the middling scenarios.  Variance is our enemy in this matter.

5. I don’t have a good plan for what to do.  Imagine passing and extending Kyoto and turning 2/3 of the U.S. energy supply into nuclear, wind, and solar power.  Heroic achievements, to be sure.  But if China and India continue to industrialize, global warming will likely continue and perhaps accelerate, as I understand current knowledge.

6. I have yet to see a real plan which recognizes three points: a) without continued economic growth the world will probably fall apart, b) the problem is real and significant, c) any good preventive solution would require an enormous amount of concerted action across both time and across nations.

7. How much does the framing of the problem contribute to our political views on the matter?  How much would we spend, or how intensively would we organize global action, if a typhoon were headed right for Bangladesh?  An earthquake?  A war?  A much slower set of changes, not fully our fault?  An out-of-control American nuclear weapon?  Should it matter?

8. If we could relocate all the losers-to-be into freer and richer countries, should we consider this a satisfactory solution?  Or are we still massive and unjustified aggressors if they are crying to us: "Don’t let it happen, don’t let it happen!"?

Bordeaux ramblings

Bordeaux is one of the loveliest and most architecturally consistent 18th century towns in Europe.  There is otherwise little to see here.  The restaurants you find are amazingly good, but there are fewer than one might expect.  Only the immigrants keep their shops open on Sunday.  The town feels oddlly empty on all days.  The professors give the graduate assistants knives and expect them to peel the white asparagus for dinner.  That is how it should be.  Michel Houllebecq’s Possibility of an Island is available here (but not yet in the U.S.) in English; he is France’s most vital current author.  The wines are wasted on me but the raw oysters are not.  I saw Sofia Coppola’s Marie Antoinettte in the local multiplex.  You would not expect a mix of Kirsten Dunst, indie rock, and the Versailles Palace to be a winner, but this is a beautiful and quite fantastic film; a must-see on the big screen.  Imagine a combination of Clueless, Peter Greenaway, and Lost in Translation.  The city of Bordeaux would be wonderful and charming as France’s ninth largest city.  But it is the fifth largest, which makes me wonder where all this is headed.

And now for something completely different, here is Bryan Caplan’s class autobiography.  Mine would involve lots of sports, a mother who brought me to chess tournaments, a father who didn’t believe in college, and a grandmother who loved Victor Hugo and Shakespeare.

The addict speaks (Ec 10 is over)

Lately, I have been spending some of my time writing this blog, which
started as a by-product of teaching ec 10, the principles class at
Harvard. I am still trying to figure out if this is a good use of my
time or not. On the one hand, this feels like providing a public good.
(Perhaps at a low cost: some of the time I spend on it has come from
watching reruns of Law and Order.) On the other hand, at times writing
this blog feels like being hooked on crack.

The real question is whether the addict realized this before his readers realized it about him.  By the way, here are the addict’s tips on time management.  (I disagree on travel, which I consider to be the best way of learning things.)  Here is the addict linking to advice on getting through graduate school.

Has the addict figured out the biggest benefit of blogging, or is he just being coy?

We welcome the addict to a more lasting presence in the blogosphere.

Addendum: He also points our attention to economics videos.

Will California adopt peak-load pricing for electricity?

One of Vernon Smith’s favorite ideas is on the table:

If the California Public Utilities Commission approves the business
pricing plan, 8,000 businesses that already have the meters would be
required to pay more during peak times starting in January…Even if businesses are forced to use the smart meters, home users seem likely to have a choice.

The utilities do, however, want the smart meters installed at every
home, and hope regulators will approve a rate increase in July to pay
for installation starting in the fall. PG&E said the project would
cost about $1.6 billion over several years, adding about 69 cents per
month to household bills.

The meters would transmit the data through either phone or power
lines to PG&E. Customers would be able to go online the next day
and monitor their energy consumption.

In many cases, energy experts say the pricing system used in
conjunction with the meters could lower household electricity bills by
helping them shift their use to times when power costs less. Those who
can’t adjust during high-rate hours would see higher bills.

What is the reaction?

…businesses call it an unfair burden.  The Silicon Valley Leadership Group and the Building Owners and
Managers Association say their member companies already try to conserve
power, and mandating the price system would only drive up costs.

Here is the full story.  This, of course, is the classic trade-off as identified by Brennan and Buchanan in their classic The Power to Tax.  Greater efficiency also means greater efficiency in revenue extraction.