Month: November 2007

China fact of the day

…there are 100 gigawatts of "illegal" electric power plants in China,
meaning plants not approved by the central government. (The entire
nation of France uses 80 gigawatts of power. China uses 650 gigawatts.)

China sentence of the day is also a citation from Arnold Kling:

China’s central government has difficulty getting its constituencies to
change, and it is "outsourcing" some forms of regulation and governance
to the U.S. and international organizations.

China essay of the day is here.

Kottke interview of Cory Doctorow

Joel Turnipseed blogging at Kottke asks, why give away books for free?  Cory responds:

…we live in a century in which copying is only going to get easier. It’s the 21st
century, there’s not going to be a year in which it’s harder to copy than this
year; there’s not going to be a day in which it’s harder to copy than this day….And so, if
your business model and your aesthetic effect in your literature and your work
is intended not to be copied, you’re fundamentally not making art for the 21st
century. It might be quaint, it might be interesting, but it’s not particularly
contemporary to produce art that demands these constraints from a bygone era….

So that’s the artistic reason. Finally, there’s the ethical reason. And the
ethical reason is that the alternative is that we chide, criminalize, sue, damn
our readers for doing what readers have always done, which is sharing books they
love–only now they’re doing it electronically. You know, there’s no solution
that arises from telling people to stop using computers in the way that
computers were intended to be used. They’re copying machines. So telling the
audience for art, telling 70 million American file-sharers that they’re all
crooks, and none of them have the right to due process, none of them have the
right to privacy, we need to wire-tap all of them, we need to shut down their
network connections without notice in order to preserve the anti-copying
business model: that’s a deeply unethical position. It puts us in a world in
which we are criminalizing average people for participating in their

The economics have yet to be worked out but I think Cory has got the aesthetics and the ethics right.  Lots more of interest.

Violence: A Micro-sociological Theory

That’s the new book from Randall Collins. The main argument is that people are not as predisposed to violence as we might think.  Collins cites a wide array of evidence, from military behavior in the field to, most intriguingly, video studies of the micro-expressions of violent perpetrators.  People are more naturally tense and fearful, sometimes full of bluster but usually looking to avoid confrontation unless they have vastly superior numbers on their side.  The prospect of violence makes people feel weak and scared.  The greatest dangers of violence arises from atrocities against the weak under overwhelming conditions, ritualized violence enacted in front of supportive audiences, or clandestine terrorism or murder.

"Violence is not primordial, and civilization does not tame it; the opposite is much nearer the truth."  Similarly, most political violence does not follow from centuries-old grudge matches, but rather from recently fabricated, dynamically dangerous social ritual interactions.  Violence can appear on the scene rapidly but it can vanish as well, so there is hope for Iraq.

In reality most violent encounters end almost immediately, contrary to TV and the movies.  Someone runs away or a single punch ends the struggle.  The actual gunfight at O.K. Corral took less than thirty seconds, whereas the famous movie scene extends for ten minutes.

In combat it is just as dangerous to be a medic as a soldier, but medics experience far less combat fatigue.  Collins argues this is because killing is in so many ways contrary to human nature.

This book has soo many interesting parts, including the micro-dynamics of the Rape of Nanjing, how British soccer stadium designs were (but now less) conducive to violence, how demonstrations can turn into violent confrontations with the police (lines break down and micro-situations of overwhelming power arise), which children and schools are most conducive to bullying, why basketball has fewer fights than football or hockey (no padding), the dynamics of a mosh pit, and how hired assassins motivate themselves, among many other topics.

You economists all spend so much time studying voluntary interaction, surely you can devote one book’s worth of effort to the study of violence, and yes I mean violence at the micro level.

I don’t agree with everything in this book.  I think Collins too quickly downplays the importance of evolutionary biology (most fights are between young males), and it is not always clear if he has a systematic theory or instead a catalog of causes of violence.

Here is the book’s home page, including chapter one.  Here is a page on Collins.  Here is an interview with Collins.  He is now working on a theory of sexual interactions.

Quite simply, Collins is one of the most important writers and thinkers today.

I know many of you have a bit of book fatigue from MR, but that is because it has been such a splendid year for the written word.  Violence: A Micro-sociological Theory is one of the most important social science books of the last few years. I’ll go even further and say the same is true for any random one hundred pages you might select from the volume; it is also a wonderful for browsing.

It’s due out January 10, you can pre-order at the links.

Shopping hour restrictions

In Zurich almost everything is closed on Sundays, even my hotel restaurant.  There is one massive underground shopping mall clustered at the railway station, where for obvious reasons ("travelers") there is a Sunday shopping exemption.  I believe this is by far the largest mall in Zurich and of course it was open.  The ugliness of the mall, and the inconvenience of the low ceilings, illustrates just how much Sunday shopping is worth.  (That is why one of the world’s wealthiest cities, and a pretty one at that, has such a monstrosity for shopping.)  Small entrepreneurs cannot compete with this (chain-laden) mall on Sundays, so I wonder if the hours restriction even favors small business on net.  The legal restrictions on outworking the competition also help explain why immigrants to Switzerland don’t move up the economic ladder as well as many American immigrants do.

Free Swiss shopping, free it now.

George Bush knows how to keep a meeting short

I used to think that short meetings were best.  Clearly, I confused the private with the social optimum.

For bonus points compare the picture with Tyler’s discussion of meetings.  How many items can you spot?

Meetings are not always about the efficient exchange of information, or
discovering a new idea. Meetings can be about displays of power,
signaling that a coalition is in place, wearing down an opponent,
staging "theater" to make someone feel better, giving key players the
feeling of being insiders, transmitting information about status, or
simply marking time until something better happens. It’s one thing to
hate meetings. But before you can improve them, make sure you know what
meetings are all about.

Hat tip to J-Walk Blog for the picture.

Why don’t cell phone companies price per minute?

David Pogue (via Kottke) asks:

Why doesn’t someone start a cellphone company that bills you only for
what you use? That model works O.K. for the electricity, gas and water
companies — and people would beat a path to its door.

Of course many companies will charge you by the minute.  Overseas, per minute plans are more common yet.  The puzzle I think is why the standard American plan is per month, with perhaps a non-convex minutes cap, rather than per minute.

The most likely answer combines price discrimination with consumer misjudgment.  If the company puts a very high marginal per minute price right at the cap, some consumers will, in self-deceiving fashion, think they are getting a good deal but then chat themselves into near-bankruptcy.  For the other consumers, you are forcing them to buy minutes as part of a bundle.  It is well know this can be an efficient means of price discrimination across high-value and low-value demanders; see my earlier post on cable bundling for a full explanation of the economics.

Why doesn’t competition break down such schemes?  First, cell phone competition has become more intense only with number portability in the last few years; we can expect pricing schemes to continue to evolve.  Second, the cost structure of the company may have more to do with marketing than with the cost of supplying extra miniutes.  So "marginal cost pricing," or the nearest approximation thereof, may involve "per customer" charges (a fixed monthly fee) rather than "per minute" charges. 

Of course they’ll let you opt out of all of this if you pay a high enough per minute charge, thereby reimbursing them for the fixed cost they paid upfront to recruit you.  That all said, if you go to Western Union and buy one of those cards with minutes to Sierra Leone, it seems that true marginal cost pricing reigns, subject of course to some probability of a fraudulent or difficult-to-use card.

Markets in everything: pretend you’re rich edition

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Here is the link, and thanks to Jared Hansen for the pointer.

The Law of the Sea Treaty

Matt Yglesias is so, so right about Friday Night Lights, my new favorite TV series (you needn’t like football, high school, or Texas; I love only the third).  So I am surprised he is not more skeptical about the Law of the Sea Treaty.

For background, here is Wikipedia, here is a Heritage critique, and here is a Cato critique.  Here is an argument for the treaty.  Here is another summary of arguments, and more details here.  Note that many nations already have signed and ratified but the U.S. has not ratified.

In essence, the convention "guarantees" freedom of navigation (fine, noting that ocean navigation is currently free, but thanks mostly to the U.S. military, not the UN), defines territorial waters, and sets future guidelines for managing the sea’s mineral resources (not so fine).  The Convention "establishes an International Seabed Authority (ISA) to authorize seabed exploration and mining and collect and distribute the seabed mining royalty." 

Economic mining of the deep ocean is decades away.  But the ISA has veto rights over developing ocean resources and this hardly seems conducive to increasing the value of those resources.  Nor does the "some regulatory framework is better than none, if only to alleviate uncertainty" argument apply.  No entrepreneurs are sitting around waiting for the U.S. to ratify the convention so they can proceed with their deep sea mining platforms.  there is a potential commons problem but right now it is best to simply wait; no current "solution" will end up sticking or much reflect the actual problems that will arise.

When deep sea mining emerges as economically relevant, the Convention will have created a now-tiny but eventually clueless, bureaucratically crippled, and possibly even corrupt multilateral institution with veto rights over economic development.  Once the landscape of the issue becomes clear, we’ll have to rewrite plans and agreements anyway.  Why support this extra level of veto rights, namely the ISA?  ISA has dispute resolution powers and of course it is geared to levy taxes and redistribute the proceeds as it sees fit. 

I don’t hold the extreme view that the UN always fails.  It is possibly good when there is a general consensus for action (UNESCO World Heritage sites), or when a well-targeted military action has a defined purpose.  The UN is very bad at developing and enforcing open-ended commitments, and very bad at constructing well-run institutions. 

Ratifying the Convention might make us look more cooperative, but that is too vague a reason to justify it.  The Convention also would make it legally easier for the U.S. Navy to pass through foreign waters, although in a pinch this probably would not matter much. 

The real issue these days is stopping the Russians from claiming most of the Arctic, at least the sea lanes, and this is why the Bush administration now supports the treaty.  We’ll then have international support, or at least the pretext of such support, for telling the Russians they can’t colonize the Arctic.  That’s it, that’s the whole real reason for supporting the treaty and jumping into bed with the UN.  But hey, I can sympathize with stopping the Russians.

That reason may well outweigh the above-described costs of the treaty, which in any case lie in the future.  So maybe I end up agreeing with Matt.  But overall the Convention is not well thought out, and any support should be offered with the distinctly pinched nose occasioned by the most cynical (albeit sometimes justified) expressions of realpolitik.

Markets in everything

I call this one: "Price-discriminating monopolists appeal to the weak-willed" edition.  Let’s say you want to attract the religiously minded parts of the individual.  What might your prices look like?

When Larry Pinczower switches on his cellphone, the seal of a rabbinate
council appears. Unable to send text messages, take photographs or
connect to the Internet, his phone is a religiously approved adaptation
to modernity by the ultra-Orthodox sector of Israeli life.

More than 10,000 numbers for phone sex, dating services and the like
are blocked, and rabbinical overseers ensure that the lists are up to
date. Calls to other kosher phones are less than 2 cents a minute,
compared with 9.5 cents for normal phones. But on the Sabbath any call
costs $2.44 a minute, a steep religious penalty.

Or maybe there is no weakness of will, but rather the high prices signal the religious loyalty of the phone owner.  Here is the full and fascinating article, and thanks to Zev for the pointer.

Why is it not $10 a minute for a call on the Sabbath?  Might too high a price signal the person is excessively weak-willed?

Frightening abstracts

Many violent relationships are characterized by a high degree of
cyclicality: women who are the victims of domestic violence often leave
and return multiple times. To explain this we develop a model of time
inconsistent preferences in the context of domestic violence. This time
inconsistency generates a demand for commitment. We present supporting
evidence that women in violent relationships display time inconsistent
preferences by examining their demand for commitment devices. We find
that "no-drop" policies — which compel the prosecutor to continue with
prosecution even if the victim expresses a desire to drop the charges
— result in an increase in reporting. No-drop policies also result in
a decrease in the number of men murdered by intimates suggesting that
some women in violent relationships move away from an extreme type of
commitment device when a less costly one is offered.

Here is the paper.  Here are non-gated versions.  Or put it this way: when prosecutors cannnot drop the charges against the man, the women are more likely to report the man in the first place, and also less likely to kill the man.

Cheap Talk Incentive

Mayor Michael R. Bloomberg
said yesterday that he was considering a proposal to give some city
students free cellphones and to reward high performance with free
airtime, but emphasized that he had no intention of lifting the ban on
cellphones in the schools.

“It’s something we’ll take a look at,” the mayor said of the proposal
being pushed by Roland G. Fryer, a Harvard economist who joined the
Education Department this year as chief equality officer.

My favorite things Georgia

1. Favorite Ray Charles song: "What’d I Say"; it’s heresy to admit this, but overall his stuff leaves me cold.

2. Favorite Jasper Johns series: Lately I often call up the "Decoy" prints in my mind.  But the "Targets" series is my pick, followed by the American flag and "Numbers."

3. Big band arranger: Fletcher Henderson — does he deserve as much credit as Benny Goodman?

4. James Brown song: "Bewildered," and have you ever seen the videos of JB dancing on the T.A.M.I. show?

5. Favorite Otis Redding song: "Fa-Fa-Fa-Fa-Fa (Sad Song)."

6. Best Little Richard cover: "Long Tall Sally," Beatles. 

7. Favorite Gladys Knight song: Tough choice.

8. Fiction: Flannery O’Connor, Carson McCullers, Erskine Caldwell, and James Dickey are all candidates but none of them do it for me. 

9. Movie, set in: Duh.  Remember "Dueling Banjos"?

10. Favorite REM song: "Shaking Through," from Murmur, is a good pick.

11. Favorite Leo Kottke album: Six and Twelve String Guitar; this one changed my life.

12. Musician I’m not supposed to like: Tommy Roe; "Sweet Pea" and "Dizzy" still sound pretty good to me.

The bottom line: Awe.  It’s Jasper Johns plus music, music, and more music, and I didn’t even have to think hard about the music.  I’m sure I left plenty out.

Berry College

How would we plan our trips without Wikipedia?

The Berry campus, easily the largest land mass campus in the world,
consists of fields, forests, and Lavender Mountain, designated portions
of which are open to the public for hiking, cycling, horse back riding,
and other outdoor activities. Present throughout the campus is a large
population of deer, which are estimated to outnumber students seven to
one. Fishing on some of the campus’ lakes and streams is permitted with
proper permits. Berry also has a wealth of wild turkeys, seasonal ducks
and geese, skunks, and squirrels.


Berry is a college rich in heritage and campus customs are deeply
rooted. The most universal custom is that of greeting everyone on
campus with a smile, a wave, and a cheery “hello.” Freshmen usually
become familiar with this custom on their first day and realize that
much of the beauty of Berry is in this spirit of friendship which one
meets everywhere.

After War

The subtitle is The Political Economy of Exporting Democracy, and the author is Chris Coyne, a former student of mine and now professor at West Virginia University, also blogger at The Austrian Economists.  Excerpt:

What do the data indicate regarding the effectiveness of reconstruction as a means of achieving liberal democracy?  In short, the historical record indicates that efforts to export liberal democracy at gunpoint are more likely to fail than succeed.  Of the twenty-five reconstruction efforts, where five years have passed since the end of occupation, seven have achieved the stated benchmark, resulting in a 28 percent success rate.  The rate of success stays the same for those cases where ten years have passed.  For those efforts where at least fifteen years have passed, nine out of twenty-three have achieved the benchmark for success, resulting in a 39 percent success rate.  Finally, of the twenty-two reconstruction efforts where twenty years have passed since the exit of occupiers eight have reached the benchmark, resulting in a 36 percent success rate.

You can buy Chris’s book here.  I view the key analytical point as focusing on the power of on-the-ground expectations to make the reconstruction "game" either a cooperative or combative one.  This is a difficult variable to control, but Chris offers a very good look at the best and worst attempts that the United States has made to manipulate these variables and thus export democracy.  If you want to know why the Solow model doesn’t seem to hold for Bosnia, or a deeper more analytic sense of why Iraq has been a mess, this is the place to go.