Month: January 2007

William F. Buckley is a smart guy

Buckley was the first person I ever read on politics.  Now he is writing:

A geographical division of Iraq is inevitable.  The major players are obvious.  It isn’t plain how America, as an outside party, could play an effective role, let alone one that was decisive, in that national redefinition.

I take it he means other than for the Kurds, whom we can continue to protect.  Jane Galt offers her mea culpa on Iraq, and questions who was really the smarty-pants.  I wrote in her comments:

While I too was "tricked" about WMDs, that was not my key mistake.  My key mistake was to think that if we could lead a regime change in a country as messed-up as Haiti without touching off a civil war, that we could do the same in Iraq.  These power transitions seemed to have worked OK numerous times in the past (though Haiti hasn’t gotten better it would have gotten worse), but of course it didn’t go very well this time.

Dan Drezner surveys his own mistakes.  Matt Yglesias gives perhaps the best ongoing coverage of the U.S. political situation.

Regardless of what Victor Davis Hanson tells us we should do, it seems obvious what we will do, namely a near-complete pull-out with a buffer reserved for the Kurds and some bases and perhaps the selective use of air power.  The next question is this: if the new Iraq really is a breeding ground for terrorists who will strike abroad, as many anti-war critics have suggested, under what conditions would we later re-up our military involvement, and for how long?  I don’t have a good answer, and perhaps I "don’t deserve to be listened to" on this, but I would like to hear what the superior predictors have to say.

Do institutional review boards stifle free speech?

Increasingly the answer looks like yes.  Zachary Schrag (he is my colleague at GMU but I don’t know him) says yes, here is his blog devoted to the topic.  Here is an article on his endeavors

Zachary writes:

The IRB regime rejects the free-speech approach of relying on tort law to deter bad behavior, and replaces it with the idea that all is forbidden unless it is specifically approved.

Zachary’s wife has excellent cultural taste, and a legal blog.

The economics of the atomic bomb

The atomic bombs were the product of an industrial effort which cost just under $2bn ($20 bn in 1996 dollars).  One billion dollars to destroy a city which would have been destroyed at minimal additional cost by one conventional raid represented an awful lot of ‘bucks per bang.’  Another way to look at it is that it cost $3bn to manufacture the 4,000 or so B-29s which were used exclusively in long-range operations against Japan, including as atomic bombers…Another index was that the total cost of the atomic bombs was the equivalent of making one-third more tanks or five times more heavy guns.

That is intriguing but it misses two points.  First, the cost of making subsequent atomic bombs is lower.  Second, atomic bombs have superior signaling power about the willingness to destroy.  That excerpt is from David Edgerton’s The Shock of the Old: Technology and Global History Since 1900.

The best piece on Colombia I have read

All these facts highlight the need to understand why some behaviors that, although found in other countries, are more common in Colombia. During the last several years, Colombian scholars have begun to explore why Colombian society imposes few, if any, controls on individual behavior…Indeed, every Colombian has a high degree of freedom to establish his or her own norms.  Because of this freedom, Colombians show great individual creativity and various degrees of social discipline.  The lack of social controls produces individuals with remarkable behaviors: anybody who respects the law and the rights of others does so because of individual convictions, as do those who break the laws.  Success in Colombia is individual, not social or collective.  Loyalty normally extends only to people close to oneself because without their help it is impossible to survive in the midst of a hostile environment.  "The net result is an abundance of anti-social behaviors: individual rationality predominates over collective rationality"…

Geography has been a main reason for differences between Colombia and other Latin American countries.  Since colonial times Colombia has been a collection of diverse regions with little communication and trade among them.  Physical barriers have been (and are) so great that many regions remained very isolated and self-sufficient.  Because of geography, until the early 20th century Colombia was the Latin American country with the lowest exports per capita and total international trade in the region.  Only the development of coffee in the 1920s changed this.  Furthermore, the growth of exports led to the development of an export-oriented infrastructure that established communications and transport facilities between the producing region and the ports, but did little to integrate the country.  Geography also made tax collection very expensive.  Not surprisingly, tax collection was frequently auctioned to the private sector and became a source of private wealth.  Until the mid 20th century, international trade taxes were the main central government tax source. A very poor central state was a corollary of the country’s regional diversity.  Because of its geography, Colombia had a great need to spend on infrastructure in order to integrate the country and to generate a national identity and a feeling of belonging, but it had few resources.  Further, other financial restrictions and the pressures of the urban populations concentrated government expenditures in a few cities, and the state never established a significant presence or controlled most of its territory.  It may be argued that these problems were similar to those of other Latin American countries.  The difference was that the population in Colombia was spread out in the country while in most other countries it was concentrated in one or two cities and some rural areas. Thus, the lack of control of the territory had greater implications in Colombia than in the rest of the region because it also implied lack of control over a large proportion of the population…

While in many Latin American countries the armed forces have been a source of national pride, the Colombian armed forces traditionally have been weak.  They have not been capable of overthrowing governments as has been common in other countries.  For example, the military coup of 1953 was more "an opinion coup" promoted by the traditional parties in response to societal clamors to end violence.  They have never controlled the territory and have not had a significant presence along the national border.

If you read only one piece on Colombia in your lifetime, it should be this one.

Markets in everything, Australian surfer dude edition

Tired of your current life?

This auction is for a New Life in the coastal town of Wollongong, Australia of a 24 year old male.

– Will introduce to all my friends & potential lovers (around 8 which I have been flirting with

– I have around 15 close friends and around 170 other friends – I have 2 nemeses

– Lifestyle is very social. It includes a lot of going out.

NB: Friends will treat you exactly as they have treated me. This includes friends who take me surfing, running, climbing and cook for me. All of these features will be transferred over to the winning applicant.

Life also includes the following features:

Will have access to a cruisy job in March delivering fruit.
You will write a satirical horiscope in the University of Wollongong Magazine.
You will have new parents to have Christmas with & birthday presents from friends.
A birthday party will also be organised for you.

This auction also includes the following
– A 4 week training course by the former me which includes the following:
– Many anecdotes and stories from a very interesting and intriguing past 24 years of my life
– 6 Jokes
– Training in becoming me (fashion, food, lifestyle, style of seduction, interests)
– Haircut like mine
– Piercings to the value of $180.
– Lessons in my personal history (The good stuff and the bad stuff)
– Skills Lessons (as mentioned above)

NB: After the 4 week training winning bidder will also receive 2 months of on-call support.

Here is the link, thanks to Hugh for the pointer.  There have been eighty bids and the price is over $40,000 Australian dollars.  The winner does not receive the passport, driver’s license, or inheritance rights of the seller.

The legacy of Fidel Castro

Cuban agriculture was transformed from the early 1960s with Soviet and East European agricultural machinery and supplies, resulting in a downgrading of animal traction.  But the collapse of the Soviet bloc in 1989 led the Cuban government to develop an animal traction programme.  The agricultural horse population recovered, but the main focus was on oxen.  They were bred and trained in large numbers, and the technical infrastructure needed to use them was built up.  The recovery in the number of oxen was spectacular.  They had fallen from 500,000 in 1960 to 163,000 in 1990 but increased to 380,000 in the late 1990s.  They replaced 40,000 tractors.

That is from David Edgerton’s The Shock of the Old: Technology and Global History Since 1900, an intermittently excellent book.

Would cocaine legalization help Colombia?

Alvaro Vargas Llosa says yes:

In a country that has made admirable progress on other fronts, the drug
war is preventing the government from finishing off the narco-terrorist
organizations.  Between 2002 and 2005, Uribe’s “democratic security”
policy successfully pushed those organizations, especially the Marxist
empire known as FARC, away from many cities.  There was a one-third drop
in the number of murders and a two-thirds drop in the number of
terrorist attacks.  The economy picked up handsomely.  But then a
stalemate ensued in the campaign against the terrorists that cannot be
attributed only to the country’s jungles.  The mafias that owe their
existence to the criminalization of cocaine continue to generate enough
funds to match every attempt by the government to beef up its military

Legalizing or decriminalizing cocaine would do much to improve America’s inner cities and it ought to be seriously considered, even if it means more doped-up middle-class white teenagers.  But legalization — whether in Colombia or the United States — is not obviously the way out for Colombia. 

The positive scenario is that legalization eliminates the profits from the drug trade and the Colombian nasties pack up shop and go away.  In a legal market, Merck would outcompete the drug barons.  Maybe they would grow more coffee.

I see two negative scenarios.  First, cocaine production has been a boon to the Colombian economy.  It is no accident that Colombia experienced no currency crisis, unlike most other Latin countries.  (For contrast, here are some arguments that cocaine has hurt the Colombian economy; I don’t believe it.)  The rural Colombian economy might well collapse, taking civil order with it.

Second, the Colombian civil war is 40 years old and it predates the importance of cocaine.  Narco-traffickers set up processing labs in Colombia because the government did not control the country in the first place.  Legalizing cocaine would devastate their incomes, and probably bring political assassinations and military conflicts into the capitol.  It is not clear Colombia can handle it.  Keep in mind these same groups once, when threatened with more extraditions, stormed the Supreme Court and almost got away with it.  Cocaine profits, however evil they may be, give the guerrilla groups some stake in the status quo. 

That said, cocaine legalization probably would have helped Colombia in the late 1970s, before the paramilitaries became so rich.  That doesn’t mean the same idea will work today.

The bottom line: There is no simple way out of the Colombian mess.  Slow evolution away from cocaine production, combined with increasing economic diversification, is probably the best hope.  Chemical substitutes, such as Ecstasy, mean that the cocaine market
will slowly dry up anyway.  This slower change, which can’t be pinned
on any government, is a better way out of the current mess than a
drastic and more sudden legalization.  In the meantime, Uribe’s policy of getting tough has paid some dividends, and there is no reason to think these gains cannot be extended.

Addendum: Anne Applebaum argues for opium legalization in the context of Afghanistan.  But note that opium production may account for as much as 2/3 of Afghani gdp.  It is unclear that Afghanistan would keep these markets in a purely legal setting, so how would the country survive the shock to its real income?  Or should we give them a monopoly and cartelize their industry to boost profits but limit consumption?

Micro-credit puzzles

There is a new approach to micro-credit:

…a very great deal has been written on the subject of microfinance.  But a lot of it makes relatively little sense, especially to economists like Joe Stiglitz [TC: I would not have worded it that way].  For one thing, interest rates on microcredit are enormous: 30% to 60% is common, and rates over 100% are not unheard-of.  And yet default rates remain very low: how is this possible? And how is it possible that demand for loans seems to be unrelated to the interest rate charged?  And why is it that borrowers seem to have little if any interest in medium-sized loans, even when they’re offered?

A forthcoming paper by Shahe Emran, Mahbub Morshed and Joseph Stiglitz not only asks those questions, but goes a long way to answering them, too. It turns out that the main factor behind all these puzzles is the place of women in society, and especially extreme illiquidity in the market for women’s labor…

While there exists a labor market for male labor, for women, the outside labor market is largely missing in most of the developing countries, especially in the rural areas.  Even where the market for female labor exists, the ‘selling price’ is, in general, much lower than the ‘buying price’, due to the transaction costs that might reflect social norms regarding women’s participation in the formal labor market (like Purdah) along with the usual search, information and monitoring costs.  The existence of a transaction cost band implies that many households fall within the band, and the female labor endowment becomes non-tradable for such a household (i.e., household specific missing market for female labor).  This implies that the shadow wage rate for the non-traded part of the household labor is determined by the complementary resources available to a household, like land.  For a poor household with little land, the shadow wage, in the absence of microcredit interventions, is very low, possibly close to zero.  The availability of microcredit enables this nontraded part of the labor to be productive.

Translated into English, a little bit of credit acts as a catalyst for women outside the labor market, turning them into economically productive individuals.  Once they become economically productive, they can pay back small loans.  But they’re not productive enough to pay back medium-sized loans.

To put it another way, how can the marginal product of capital be so high?  Perhaps the interest on a microloan isn’t a pure return on capital, it is also a return on labor.  Without a tiny bit of capital, the labor can’t be tapped.  (So the marginal product of capital isn’t really all that high in Indian slums, for instance.)  Supposedly that is why microcredit works, and why larger loans are much less popular.

This is ingenious, but the theory won’t hold up if it focuses on liberating the labor power of women.  There are plenty of micro-credit markets where most of the loans finance the productive efforts of already-employed men.  A more realistic explanation has to consider micro-credit as micro-insurance (what if the kid needs to go to the doctor?, liquid funds are needed now), and the high rate of implicit taxation which needy relatives impose on spare household liquidity.  Both of these factors will get the private return from borrowing to be high, without requiring a comparably high rate of economic growth.

Here is the link.  Here is my earlier column on micro-credit.

They thought they had me, but I had them! Maybe.

In a moment of weakness after my furnance broke down I bought a service contract.  Now every few months I get a "free cleaning" during which the furnace repair guy tells me about all the other products I need.

The salesman, sorry, I mean furnace repair guy, seems honest and genuinely concerned about my ambient body temperature.  Of course, I never listen to him or buy anything and this makes me very happy.  See, I figure that most people do purchase additional services from such a fine young man.  If so, then perhaps the real purpose of selling the insurance contract is not the insurance- it’s to get the salesman in your door several times a year.  And that means that the insurance qua insurance contract ought to be reasonably priced, maybe even under-priced, or at least not jacked up as high as it would be if it didn’t lead to further sales.

Thus, I have cleverly reasoned my way out of foolishness and towards brilliance –  such reasoning is to be distrusted.  Nevertheless, I wonder whether the argument does not generalize.


I arrived three hours early and went through six different and thorough searches at the airport; I do look like a drug dealer.  By my fourth day it had become clear how many wealthy Colombianas have had plastic sugery, of the disproportionate kind if you get my drift.  Colombia now has more people than Spain.  The American government freezes the funds of the families of Americans who have been kidnapped.  I found Bogotá safer than Madrid.

The Italian edition of Vanity Fair just listed Bogotá as one of the six up-and-coming tourist hotspots; Sibiu, Romania and the Kurile Islands (Russia) also made the list, enjoy.

When is democracy an equilibrium?

…democracy may only be stable when one group is dominant.  We provide a test of a key aspect of our model using data from "La Violencia", a political conflict in Colombia during the years 1946-1950 between the Liberal and Conservative parties.  Consistent with our results, and contrary to the conventional wisdom, we show that fighting between the parties was more intense in municipalities where the support of the parties was more evenly balanced.

Here is the paper, here is a non-gated version.

We don’t know our own conscious experience

Eric Schwitzgebel reports:

Philosophers since Descartes have been taken with the idea that we know our
own conscious experiences or "phenomenology" directly and with a high
level of certainty.  Although infallibilism in this regard has been under
heavy attack since the 1960’s, philosophers still generally assume that our knowledge
of our own phenomenology is quite good and that, for example, we are extremely
unlikely to be grossly mistaken about our own current phenomenology when we
concentrate extended attention on it.  I argue against this claim.

In "How
Well Do We Know Our Own Conscious Experience? The Case of Human Echolocation
Michael S. Gordon and I argue that although there is something it is like for a
human being to echolocate, we have very poor knowledge of the experience of
echolocation.  In "How
Well Do We Know Our Own Conscious Experience? The Case of Imagery
" I
suggest that our knowledge of even something as basic and prevalent as our
visual imagery is surprisingly poor.  In "Why Did
We Think We Dreamed in Black and White?
", I present the common 1950’s
opinion that we dream primarily in black and white as an example of a case in
which people have been grossly mistaken about their own subjective experiences.
("Do People Still Report Dreaming in Black and White? An Attempt to Replicate a Questionnaire from
" provides empirical evidence that popular opinion about the
presence of colors in our dreams has indeed changed since that period.)

Unreliability of Naive Introspection
" provides a brief general overview
of several domains in which introspection of conscious experience appears to be
unreliable.  A more ambitious general paper on this topic is in the works.

Training: Reflections on Titchener’s Lab Manual
" explores, through an
examination of the historical case of E.B. Titchener, the prospects of training
to improve the quality of introspective judgments.  "Difference
Tone Training: A Demonstration Adapted from Titchener’s Experimental Psychology
provides the reader the opportunity to train herself in a roughly Titchenerian

I am also working on a book manuscript with Russell T. Hurlburt, a
psychologist at UN Las Vegas and a leading proponent of experience sampling as a
means of generating accurate descriptions of moments of conscious
experience.  The book centers around an edited transcript of a series of
interviews Russ and I jointly conducted with a subject who was wearing a random
beeper and who was asked to take note of her experiences whenever the beeper
went off.  In the course of the interview, Russ and I concretely confront
the question of how much to believe the subject’s reports of randomly selected
moments of her experience.  If her reports are largely accurate, then the
transcripts also provide, in unprecedented detail, a portrait of moments of an
ordinary person’s phenomenology.

Read his home page and blog.  Here is Eric on conjugal love.

Addendum: Will Bryan Caplan take the bait and present his argument that such studies are a priori false because the studies themselves rely on data from consciousness?  Of course this counterargument is wrong.  We can make lots of mistakes, but still hold the capacity to measure some of those mistakes.