Month: May 2008

Why did they build expensive medieval churches?

Bryan Caplan asks (the rest of the post is interesting on other matters):

Seeing a bunch of French cathedrals makes me even more skeptical of the claim (made by Larry Iannaccone
and others) that people weren’t more religious in earlier centuries. If
people weren’t far more religious in the Middle Ages, why did they pour
such a high fraction of their surplus wealth into century-long
religious architectural projects? You could say "It was primarily
rulers, not donors, who allocated the funds," but that just pushes the
question back a step. Were rulers vastly more religious than the
masses? That’s hard to believe. Were rulers trying to impress the
masses by building churches? Well, why would churches impress the
masses unless they were highly religious?

His answer:

Religious architecture and art were to medieval feudalism what advertising and commercialism are to modern capitalism:
A rather effective way to build support for the status quo using
aesthetics instead of argument. My claim, in short, is that Notre Dame
played the same role during the Middle Ages that fashion magazines play
today. Notre Dame was not an argument for feudalism, and Elle is not an argument for capitalism.  But both are powerful ways to make regular people buy into the system.

I would add that churches were a form of fiscal policy and the associated spending was a way to hand out goodies to political allies.  (This is especially important if the finished project takes decades or centuries to materialize.)  In a time of political decentralization it wasn’t easy to construct or maintain a long distance road.  So you had to put a lot of expense in one easy-to-guard place and in a politically correct way.  Churches were the obvious choice.  Churches may have been an efficient means to store wealth for other reasons as well.  If someone is going to plunder you on the run, they can wreck a church but they can’t dissemble and carry away its value very easily.

Robin Hanson might argue that beautiful churches also signaled the status of the elites who built them. 

Markets in everything, Yugoslavia edition

Already from the first days and weeks of the
conflict in 1992, individuals sought to obtain money by providing
information about the locations of prisoners and detainees. Some people
offered to arrange prisoner exchanges or releases in exchange for
payment. The practice continued into the postwar era, when individuals
from all three ethnic groups offered information about mass graves and
other burial sites for profit. About 12,000 victims of the conflict
remain unaccounted for.

Here is the article, the pointer is from Stephen Smith.

The war against cultural diversity

This war has spread to New Jersey:

There’s East Rutherford, then Carlstadt, then Moonachie, then — whoosh
faster than the car radio can play the latest hit single, you’re in
Little Ferry, the next borough over. That’s four boroughs in one song.
You pass through Moonachie during the refrain.

Moonachie is small: about 2,700 residents. That’s smaller than some New York apartment complexes. That’s just one-seventh of the seating capacity of the arena at Madison Square Garden.

That’s too small, says New Jersey Gov. Jon S. Corzine (D).

Corzine, who presided over mergers and acquisitions as chairman of Goldman Sachs, is telling hundreds of New Jersey’s smallest towns and boroughs that they are too small to exist. Multiple
layers of government are financially wasteful, he says, and the
littlest towns and boroughs need to merge with their bigger neighbors
to achieve economies of scale.

Corzine’s incentive — more like a hammer — is a threatened cutoff of state aid.

I would be disappointed if they did away with East Rutherford and Moonachie.  Here is the full story.

Who should be bounced from The Great Books series?

Before leaving for Japan, I’d been pawing through these volumes lately — you know, the U. Chicago fat tomes with two columns on each page?  The obvious question is which books belong and which do not; overall I’m surprised at how well the 1952 picks have held up and yes that is tribute to the University of Chicago or at least its influence.

I’m sad that Hume doesn’t get his own volume, including many of his shorter essays.  Plus I’d like to add Dickens’s Bleak House and at least the first two books of Proust.  And who to bounce?  I nominate Plotinus as the obvious choice, noting that he has only about 24,000 cites on, not even as many as Joseph Stiglitz.

In 1990 they dropped four books: Apollonius’ On Conic Sections, Laurence Sterne’s Tristram Shandy, Henry Fielding’s Tom Jones, and Joseph Fourier’s Analytical Theory of Heat.  The loss of Sterne is regretted but the others we can do without.  You’ll find a list of the added books in 1990 at the first link, about halfway down and yes they did include Swann’s WayLittle Dorrit is not the best or even the second best Dickens selection.  Most are good picks though I would have left the Bergson, the Dewey (unreadable), and tossed out some of the shorter works in favor of Ulysses.  More William James is never a bad idea; how about The Varieties of Religious Experience?  None of the science books will age well.  And how about a wee bit of Mises and Hayek to reflect the failures of socialism?  Absalom, Absalom would help cover race and maybe Mill on The Subjection of Women should be there too.

Free banking in Second Life

Yes, economic activity in Second Life continues to rise.  I am interested in the Second Life currency, Linden Dollars, which trades against the U.S. dollar at a market-determined exchange rate.

Free banking economists used to debate whether a private sector fiat currency could succeed.  Hayek, in his Denationalisation of Money, said yes but most other people said no.  The obvious problem is time inconsistency, namely that the fiat currency issuer will at some point inflate away its value to the seigniorage-maximizing margin, noting that such a margin changes with the passage of time and not necessarily in a favorable direction.

Who would have foreseen that maximizing income from "land" sales might check this outcome?  I think of Linden Dollars as akin to legal tender currencies: you can’t buy anything in Second Life without them.  Since the goods and services in Second Life have value the currency does too.

Who had expected that the next generation of private currency suppliers would make it work by, in God-like fashion, supplying accompanying worlds as well?  What other problems can be solved this way?  Or are Linden Dollars the next bubble waiting to burst?

Department of No Clue

Christopher Hayes writing in The Nation.

The vast majority of interest groups in
Washington, from the Sierra Club to the AFL-CIO to Planned Parenthood,
are pursuing what Edsall calls "substantive reform"–attempting to push
legislation and enact policies that will provide public goods, protect
citizens from harm and redistribute benefits, rights and privileges away
from the powerful and toward middle-class citizens and disenfranchised

And if you believe that, might I mention that if you act quickly I have some land in Florida just ripe for development.

Profile of Larry Lessig

By Christopher Hayes.  Lessig is now determined to fight the influence of money in politics, a possibly Quixotic quest.  Whether you think his program is either possible or desirable is a major question of politics.  Excerpt:

"There’s a speech that Reagan gives in
1965," Lessig says, "where he talks about how democracy always fails
because once the people recognize they can vote themselves largess, they
just vote themselves largess and the fiscal policy is destroyed. Well,
Reagan had it half-right. It’s not as if it’s the poor out there who
have figured out how to suck the money out of the rich. It’s exactly the
other way around."

Libertarian heresies

Here is a good report on my libertarian heresies, summarizing a talk I gave at the Institute for Humane Studies a few weeks ago.  Excerpt:

Russia, he pointed out, is failing as a free society not because it
is poor – Putin’s shrewed management of high commodity prices has put
paid to much Russian poverty – but because Russians tend to privilege
their friends and contacts above all else, leading to epic levels of
corruption. Corruption, of course, is a signal rule of law failure.

He then asked, somewhat rhetorically, if liberty was confined (and
defined) by culture: ‘We should not presume that our values are as
universal as we often think they are’. What happens, he asked
rhetorically, if – in order to enjoy the benefits of liberty and
prosperity – societies have to undergo a major cultural transformation,
including the loss of many appealing values? Cowen focussed on Russian
loyalty and friendship, but there are potentially many others. Think,
for example, of the extended family so privileged throughout the
Islamic world, or the communitarian values common in many indigenous

The Education Transformation of China

University education in China is skyrocketing.  In 1996 China had less than 1 million freshmen, in 2006 there were over 5 million freshmen.  The freshman class is continuing to grow and university graduates, of course, are just 4 years behind.  About half of the entering students are in a hard science or engineering program.  As a result, China today produces 3 times more engineers than the United States and will quickly overtake the U.S. in total graduates.

Many people worry about what the Chinese education explosion means for
the United States but I am optimistic.  First, as China and other countries grow wealthy the
incentive to invest in R&D is increasing.  If China and India were as wealthy as the U.S. the market for cancer drugs, for example, would be eight times larger than it is today – and a larger market means more new drugs for everyone.

Second, the growth in Chinese education is
increasing the supply of new ideas and that too is a benefit to people around the world.

Surprisingly, China’s education system is being
transformed to a
considerable degree by private forces.  As late as 1999 the Chinese government
paid for most university education but from 2001 onwards tuition and
fees account for more than half of total educational expenditures.

I have drawn much of the data in this post from a fascinating new paper, The Higher Educational Transformation of China and its Global Implications by Li, Whalley, Zhang and Zhao.  The paper has much else of interest.

I will be traveling to China to give a talk at Yunnan University in late June and will report on the transformation as it looks on the ground.

How do markets set the profit-maximizing level of air conditioning?

Ben M, a loyal MR reader, asks:

How does an office/shopping mall/theater decide how low to set its air
conditioning? It seems like they’ve found a bizarre and expensive
equilibrium where the "normal" indoor temperature is 63 degrees (in
August) and everyone carries an extra long-sleeve layer to keep warm.
How did it get this way, and is there some way to fix it?

This is perhaps the most common European complaint about visiting the United States, noting that they also don’t like ice in drinks and think freely circulating cold air can kill small babies. 

I believe the goal of high-powered AC is to give customers the feeling of luxury, the feeling that anything can be afforded, and the feeling that the store will spare no expense toward the end of comfort.  I do not believe that either the average or the marginal buyer actually — marketing effects aside — prefers that temperatures be so low.  This implies that low margin stores will set the AC at lower levels; does anyone know if this is true?  For instance businesses offices should be somewhat warmer than Nordstrom or Macy’s.

I find many movie theatres to be infernally cold, perhaps because they seek to be viewed as a respite from the summer heat.  Appealing to dating moviegoers, who may wish to cuddle together, or be forced to do so, may be another reason.

And still I wonder why it is so loud in the pachinko parlors