Month: August 2009

Ironic Deception

In an interesting article on the history of "photoshopping," the New York Times says that one of the classic photos of Abraham Lincoln is actually the great emancipator's head grafted onto the body of John C. Calhoun!  Calhoun, of course, was the great proponent of slavery calling it not a necessary evil but a "positive good."

The article doesn't say, but surely the compositor was sending a message with his ironic deception.


FYI, this caught my eye because the first article that Tyler and I ever co-authored was on Calhoun's constitutional theory.  No link, but here's the reference: Tabarrok, A., and T. Cowen. 1992. The Public Choice Theory of John C. Calhoun. Journal of Institutional and Theoretical Economics 148 (4):655-74.

Insurance markets in everything

…two Long Island insurance brokers have developed a way for the
fantasy owner to experience the bittersweet taste of an insurance
payout when their superstar goes down with a season-ending injury.

That's right. Pro teams have hedged against their largest contracts
with insurance for years. Now owners of fake teams can now protect
themselves against the injuries of real players with actual insurance

I thank Jon for the pointer.  I wonder if this isn't a publicity-generating loss leader for their other insurance policies.

*History of the Mafia*

This new book by Salvatore Lupo is a translation from the Italian.  I read a bunch of Mafia books before leaving for Sicily and this one has, by a considerable margin, more economic history and more analytic reasoning than the others.  It asks how the Mafia interacted with more general changes to the Sicilian economy and also asks why the Mafia were stronger in some parts of Sicily than others.  The latter sort of question is a no-brainer for an economist but it doesn't pop up very often in the literature.

On the American Mafia, Mike Dash's The First Family: Terror, Extortion, Revenge, Murder, and the Birth of the American Mafia is both good and readable.  See for instance the Jonathan Yardley review at the Amazon link.

The Mafia is a topic I will never understand very well, so it is hard for me to judge the substance of these books but they do signal various impressive qualities.

The economics of rural Thailand

I asked her why she did not wear the costume.

"I am part of a new generation, and I do not like it. It is hot and
uncomfortable," she said. But she noted that she might have to because
the chief is considering forcing everyone to wear the costume. "If the
chief orders us, we will do it." The chief of the village, a
52-year-old named Nanta Asung, told me that Thaijun was the only woman
in the village who did not wear traditional dress and that her choice
was unacceptable. "If you are Palaung, you have to wear the costume of
the Palaung," he said while chopping pork for dinner. "This is a must.
A must!"

Asung said they must wear the dress because of tradition, but he
also spoke excitedly about its appeal to tourists and noted that half
of the village's income of $30,000 a year comes from tourism. That
night an Australian family was paying $15 to sleep in his hut. "He is
very worried that visitors will stop coming," my guide, who served as
my interpreter, told me as we left and headed to our own hut.

As we walked across the village, Asung began broadcasting over
loudspeakers: "This is a reminder that all women should wear
traditional dress. Some foreigners just came to complain that some
women were not wearing their costumes." (We quickly returned to explain
to the tribal chief that I was asking questions, not complaining, but,
unsurprisingly, he did not issue a correction over the village

Here is the full story, which is interesting throughout.  A debate is raging as to whether it is ethical to visit villages that stacks rings on the necks of their women or elongate their earlobes.

*Codes of the Underworld: How Criminals Communicate*

That's the new book by Diego Gambetta and it is the best applied book on signaling theory to date.  Gambetta's task is well summarized by a single sentence:

Given these propensities, one wonders how criminals ever manage to do anything together.

The signaling problems faced by criminals are unusual in the following regard.  On one hand they wish to signal a certain untrustworthiness, namely that they are criminals in the first place.  This is useful for both meeting other criminals and also for intimidating potential victims.  On the other hand, the criminals wish to signal that they are potentially cooperative, for the purpose of working with other criminals.  Sending these dual signals isn't easy and Gambetta well understands the complexity of the task at hand.  As Henry points out, facial tattoos are one particular effective method of signaling that one is a criminal for life.

Here is a passage which I found striking:

…Women are significantly less violent than men in the outside world and less lethal when they are violent.  This holds in all times and places for which relevant data exist.  And yet in prison this universal fact is overturned: women become at least as violent and often more prone to violence than men are.  Although women in prison rarely commit homicide, a large study of Texas prisons by Tischler and Marquart showed that there was no difference between women and men in the incidence of violent episodes.  Table 4.2, based on comprehensive statistics for England and Wales, shows that the gender pattern is even reversed; women assault each other twice as much as men do, and they fight one and half times as much as men do, a result that disconfirms the testosterone hypothesis.

Generally, women are convicted of proportionally fewer violent offenses than men are and have shorter criminal histories, two circumstances that rule out some of the possible selection effects that could explain away the high rates of female prison violence…

Gambetta wonders whether women in prison resort to violence so frequently because they have fewer alternative credible means of signaling toughness.

Harry Truman, free marketeer?

Is it possible he was the most deregulatory President of his century?  John Nye writes:

…Harry Truman left office in 1953 a very unpopular man.  Almost no one at the time gave him credit for overseeing a period of rapid recovery that was much broader and more impressive than anything that happened under Roosevelt's tenure — and this at a time when most economists predicted a deep postwar recession.  He did this while shrinking the government and dismantling wartime regulation at a rate Ronald Reagan could only have dreamed of.  He smoothly pulled us back from a regime of wage and price controls that could have easily been allowed to linger…Thanks to Truman we were once again moving in the direction of a competitive, open-access market economy…Yet Truman's stellar reputation today owes nothing to his economic achievements, which most of those who today praise his foreign policy acumen know nothing about.

That's from the Sept./Oct. issue of The American Interest and the article is entitled The Real New Deal (gated).

*The Inheritance of Rome*

What can I say?  I have to count this tome as one of the best history books I have read, ever.  The author is Chris Wickham and the subtitle is A History of Europe from 400 to 1000.  The author states that this is a book written “without hindsight” so the focus is not on how early medieval times were a precursor of this, that, or the other.  In addition to its all-around stunningness, it has the following:

1. Extensive use of Egyptian archives, which it turns out are extensive from this period.  Egypt may have been the most advanced part of the world at that time.

2. Fluid integration of historical and archeological sources.

3. An emphasis on “localization” as the fundamental change following the fall of the Roman Empire, and numerous micro-studies of exactly how that localization occurred.  Cities shrank, trade networks dried up, etc.

4. An illuminating discussion of how family control made it incentive-compatible to invest so much wealth in monasteries.

5. An interesting hypothesis as to why so many Islamic cities ended up with such narrow streets (I may blog this separately).

6. How the peasantry ended up so downtrodden in England.

7. How the fall of the Roman Empire really happened (more or less).

8. How the Carolingian, Byzantine, and Abbasid empires all drew upon their Roman heritage in varying ways.

And more.  If a while ago I defined the category “a book after which you don’t want to read any other book,” I’ll try a new designation: “a book which makes you want to spend a month or more reading follow-up works in the same area.”

Here is one very good review.  I got a kick out of one of the Amazon reviews:

This is a challenging book to read. There is so much information
crammed into every page that you have to read slowly or you’ll miss
something. And there are 550 pages of this.

Content!  Heaven forbid! 

Assorted links

1. Is Viagra bankrupting Brazilian pensions?

2. The decline of the super-rich.

3. Markets in everything: North Korean restaurant comes to NYC.

4. Brahms Complete Edition, 46 discs for $62.

5. Via Chris Masse, Hal Varian on how the web challenges managers (for the video version click on "launch interactive" and "all videos").  Chris also refers us to the Avatar trailer, which he describes as the best science fiction movie ever.

6. The Singapore model: sign me up too.

Price controls in everything

Due to increasing demands for larger dowries, unemployment and housing
problems significant numbers of Yazidi youths are struggling to get
married in the Kurdistan Region today, raising fears of social unrest
among the small community.

It has been reported that some Yazidi families are now demanding a
dowry of between ten and thirty thousand US dollars to allow their
daughter to marry a fellow Yazidi.

But now, in an attempt to rectify the problem, the Spirit Council (the
Yazidi supreme religious council) has announced a new religious decree
stating that families cannot demand dowries higher than two thousand

Here is the full story and I thank Lars Christian Hvidberg for the pointer.  The first-cut approach to incidence suggests that wealth will be redistributed away from attractive and otherwise marketable bride prospects.  In addition, good-looking men should now "marry better," relative to wealthy men, than in past times.

The price of anarchy in basketball

Brian Skinner writes:

Optimizing the performance of a basketball offense may be viewed as a network problem, wherein each play represents a "pathway" through which the ball and players may move from origin (the in-bounds pass) to goal (the basket). Effective field goal percentages from the resulting shot attempts can be used to characterize the efficiency of each pathway. Inspired by recent discussions of the "price of anarchy" in traffic networks, this paper makes a formal analogy between a basketball offense and a simplified traffic network. The analysis suggests that there may be a significant difference between taking the highest-percentage shot each time down the court and playing the most efficient possible game.

Here is some additional explanation.  I thank Michelle Dawson for the pointer.

A Swedish tragedy, in one short act

Wife: Let's send her the bag

Husband: That will take forever.


Husband: Swedish postal delivery has been privatized.  [TC: More accurately, it is open to private competition.]

Wife: Where do we find a post office?

Aide: In the main train station


Wife: Why isn't there a post office in the train station?

Different aide: It is gone.

Wife: Why are there no post offices around?

Wife (again): What do you do if you wish to mail something?

Yet another aide, in halting English, with a Middle Eastern accent: I do *not* wish…to do that.  I do not do it.

(Much later, in the basement of a department store, surround by lottery promotions and cigarette racks, husband and wife are mailing the aforementioned computer bag)

A fourth and different aide: This is the only post office in central Stockholm (TC: how can that be true?)

Husband: In the United States the postal service absorbs too many workers; Sweden represents efficiency.

Wife: If I cannot mail the bag, this is inefficiency.

Editor's note: The dialog with several other aides has been omitted due to publication constraints.

The addictions of fame and power

Matt Yglesias writes:

At the same time, I’ve come to be increasingly baffled by the high degree [of] cynicism and immorality
displayed in big-time politics. For example, Senators who genuinely do
believe that carbon dioxide emissions are contributing to a global
climate crisis seem to think nothing of nevertheless taking actions
that endanger the welfare of billions of people on the grounds that
acting otherwise would be politically problematic in their state. In
other words, they don’t want to do the right thing because their
self-interest points them toward doing something bad. But it’s
impossible to imagine these same Senators stabbing a homeless person in
a dark DC alley to steal his shoes. And what’s more, the entire
political class would be (rightly!) shocked and appalled by
the specter of a Senator murdering someone for personal gain. Yet it’s
actually taken for granted that “my selfish desires dictate that I do
x” constitutes a legitimate reason to do the wrong thing on important

Making it all the odder, the level of self-interest at stake isn’t
all that high. Selling the public good down the river to bolster your
re-election chances isn’t like stealing a loaf of bread to feed your
starving children. The welfare rolls are hardly stocked with the names
of former members of congress. Indeed, it’s not even clear that voting
“the wrong way” poses particularly serious threats to one’s
re-election. But even if it did, one might assume that people who
bother to dedicating their lives to securing vast political power did
so because they actually wanted to accomplish something and get in the history books, perhaps, as one of the big heroes of their era.

I don't intend any particular point about cap and trade, but viewed more generally it's stunning how true this is.  (In fairness, note that the title of this post is my framing, not necessarily Matt's.)  Many people — especially those who become politicians — really do want fame and power and it is amazing what they will talk themselves into to get there and to stay there.  They don't even want fame in the sense of being recognized, in the longer run, for having done the right thing.  They want more personal influence and power now.

John Sutherland and 900 Victorian novelists

The appearance, after more than twenty years, of a second edition of John
Sutherland’s The Longman Companion to Victorian Fiction, is exciting news
for Victorian enthusiasts, whether students, academics or readers. For the
book represents a staggering achievement that is unlikely ever to be
equalled. That a single scholar, working un-assisted, should undertake to
synopsize 554 (now 560) novels and offer biographical accounts of 878 (now
900) novelists, as well as compiling entries on forty-seven magazines and
periodicals, twenty-six major illustrators and thirty-eight (now forty-one)
miscellaneous items (“Sandism”, “the Yellowback”, “The Nautical Novel”), is
a feat that beggars imagination, especially since much of the work was
completed before the availability of the internet and searchable digitized
texts. In his Preface to the first edition Sutherland stated that it took
him five years to prepare the Companion. In his Preface to the new edition
he confesses that it was “the work of a decade”.

Here is more and I thank The Browser for the pointer.

The culture that is French

Journalists accompanying Mr. Chatel and Hervé Novelli, the secretary of
state for commerce, on a trip to an Intermarché supermarket in
Villeneuve-le-Roi, southeast of Paris, became suspicious when the
aisles were suddenly filled with well-dressed, articulate women eager
to praise a government freeze on the price of some school supplies
before the new school year began.

Here is the article.  Here is information on French subsidies for school supplies.  The women, in fact, were paid to be there.