Month: June 2011

Antibiotic resistance

The E coli strain that is killing people in Europe is both new and resistant to at least a dozen antibiotics in eight classes. It’s clear, therefore, that this strain picked up resistance via gene transfer from previous strains that evolved resistance over a longer time frame. Thus, antibiotic resistance can spread very quickly, probably more quickly than we can develop new antibiotics. One of the places that resistance develops is in farm animals where antibiotics are used as growth promoters, not just as therapeutics.  Since there is a significant externality from antibiotic use, there is a good case to be made for regulating antibiotic use. As Glenn Reynolds once put it:

I think you can make a better case for regulating antibiotics than heroin: Misusing antibiotics can endanger countless others, while misusing heroin mostly endangers oneself.

(FYI, Tyler and I use antibiotic use as an important example of externalities in Modern Principles).

Denmark progressively regulated and reduced antibiotics for sub-therapeutic use in pigs, poultry and other livestock beginning around 1995. After some experimentation, pig production was not adversely affected and resistance in the wild declined. It’s less clear whether human health increased due to the regulation of antibiotics in farm animals (although there is less resistance in countries that use fewer antibiotics). It may be that Denmark is simply too small and connected with the rest of the world to see a large effect. Nevertheless, Denmark shows us that the costs of reducing antibiotic use in farm animals is not excessive, especially if phased-in, and the benefits of maintaining the effectiveness of our stock of antibiotics is so high that I see more intelligent but reduced use as an important goal.

See also Megan McArdle’s very good talk on this topic.

Assorted links

1. More or less the opposite of the truth.  And do not confuse “hilarity with universality” with “hilarity” more generally.  It is on the first that the Germans fail, not the second.

2. New pricing strategy.

3. An argument that driverless cars are not illegal.

4. Further thoughts on declining crime rates.

5.  Another ZMP laborer?  Or is it sticky wages?

6. Sicilian mayor sells homes for one euro.

7. We were (are) not as wealthy as we thought, or when did the recession really start?

The furor over the new British college

Read all about it.  Excerpt:

Current London students also ­pro­tested that New College students would be allowed to use publicly funded facilities such as the main University of London ­Senate House Library in ­Bloomsbury.

As the anger grew, Dawkins distanced himself from the launch, while David Latchman, master of Birkbeck, released a statement making clear that Grayling had resigned from his post to lead New College.

Meanwhile, questions were raised about investors in the venture, which will be one-third owned by academics, with much of the rest of the money coming from wealthy individuals, including a manager at a Swiss private equity firm.

Addendum: Tim Worstall sends along this useful link.

Which is the more important headline?

US solar power nears competing on price (“US solar power will compete on price with conventional generation within three years without subsidy thanks to plummeting costs, industry leaders say.”)


Oil leaps as Opec descends into acrimony

Is a falling oil price a necessary concomitant of viable solar power on a large scale?  Or not?  Is the price of natural gas falling through the floor?  I missed that headline.

I thank Jim Olds for a relevant pointer.

*Unified Growth Theory*, by Oded Galor

In one scenario, the Neolithic revolution comes earlier to some areas than others; those areas then receive their gains in the form of higher population rather than higher wages, for Malthusian reasons.  Under some conditions, some of those regions manage slightly positive per capita income growth for extended periods of time (it is on this question that I find the argument both haziest and most parasitic on other theories; toward the end of the book the stress is on whether an economy has had prior selection for “quality” individuals).  That can lower their birth rates, which allows for a take-off out of Malthusian constraints.  There may be further positive selection for pro-economic growth humans, which compounds and extends growth.

That is not the entire unified theory but it does offer a flavor of which kinds of mechanisms do the work.  There isn’t much talk of government policies, coal, or liberal ideology, although every now and then incentives and intellectual property rights appear on a list of factors relevant for growth.

The book has many equations, right in the text, but the main arguments are explained clearly with words.

I would have found it valuable if the author would have asked a concrete question: “Could the Industrial Revolution have come to Song China (Rome, Baghdad, etc.)?” and told us in terms of the parameters of his theory why or why not.  I am never sure what stance he is taking on the degree of contingency in observed outcomes.

It is argued that Africa has too much genetic diversity, Native American populations too little.  This seems question-begging, and I wonder if the African populations which actually came into contact with each other on a regular basis, pre-imperialism, had so much genetic diversity.

The most valuable part of the book is the extended discussion of how “time since the Neolithic Revolution” matters and how subtle and indirect the indirect mechanisms of connection can be.  I consider those discussions to be a major contribution.

It’s certainly an interesting work, but most of the evidence offered is supporting the more general parts of the argument, not the more controversial or novel parts.  Galor is very smart, and anyone interested in economic growth should read this book, but I would not describe myself as a convert to either the conclusions or the overall method.

Here is my previous post on the book.

Siracusa and Ortigia

Europe’s oldest church is an add-on to a former Temple to Athena; Catholic style draws upon the Greek more obviously when the two are juxtaposed.  Food delicacies include sardines, pistachio, imaginative use of bread crumbs, unparalleled swordfish, smoked tuna, zucchini, sweet and sour pumpkin, fennel, and as in the Arab world the line between the meal and the sweets is not as firm as the French have tried to make it.  Most of all, the ricotta stands out.  Order a pasta “norma” style, with ricotta on top, and then have ricotta for dessert too.

Depopulation is evident, even in the beautiful areas near the sea on Ortigia.  Fifty years from now, will it be empty, a crowded tourist theme park, ruled by Chinese capital, or full of Tunisians?  Is the embedded cultural capital in current Siracusan society positive or negative in value?  Is mobility equalizing average rates of return?

No one seems to mind that most of the art museum is rotting away.  Ordinary life here has very little to do with the internet.  The cats are skinny and fearful.  The visit is splendid.

The Great (Male) Stagnation

You have probably seen something like the following graph which shows real GDP per capita and median male income since 1947. Typically, the graph is shown with family or household income but to avoid family-size effects I use male income. It’s evident that real gdp per capita and median male income became disconnected in the early 1970s. Why?  Explanations include rising inequality (mean male income does track real gdp per capita somewhat more closely), Tyler speculates that the nature of technological advances has changed, other people have speculated about rising corporate profits. Definitive answers are hard to come by.

Here is another set of data that most people have not incorporated into their analysis:

Median female income tracks real GDP per capita much more closely than does median male income. It’s unclear which, if any, of the above explanations are consistent with this finding. Increasing inequality, for example, predicts an increasing divergence in real GDP per capita and female median income but we don’t see this in the graph (there is a slight increase in the absolute difference but the ratios don’t increase). Similarly, we would expect changes in technology and corporate profits to affect both male and female median income equally but in fact the trends are very different.

One can, of course, do the Ptolemaic move and add an epicycle for differences in male and female inequality and so forth. Not necessarily wrong but not that satisfying either.

The big difference between female and males as far as jobs, of course, has been labor force participation rates, increasing strongly for the former and decreasing somewhat for the latter. Most of the female change, however, was over by the mid to late 1980s, and the (structural) male change has been gradual. Other differences are that female education levels have increased dramatically and male levels have been relatively flat.  Females are also more predominant in services and males in manufacturing: plumbers, car mechanics, carpenters, construction workers,  electricians,  and firefighters, for example are still 95%+ male.  Putting these together points to a skills and sectoral story, probably amplified by follow-on changes in labor force participation rates.

Thinking about the story this way also reminds us that the median male or female is not a person but a place in a distribution. The median male in 1970 can get rich by 1990 even though median male income is flat.

Again, no definitive answers, but the raw patterns are striking.

Note: An extra high tip of the hat to Scott Winship who whipped up all of the data during a discussion.

What do the laws against driverless cars look like?

A few people have asked me this question, here is one example, from Falls Church City:

No person shall operate a motor vehicle upon the streets of the city without giving full time and attention to the operation of the vehicle.

Of course that wasn’t intended as a law against driverless cars per se, but that would be its practical effect.  Ask yourself the following question: let’s say you sat in the back seat, singing rap songs with your shirt off, while the computer piloted the car flawlessly.  In a 35 mile per hour zone, the car would go exactly 35 mph and you would smile and wave — with both hands — at each police officer you passed.  For effect, you could stick your two feet out the window as well.  How long could you go before they pulled you over?  How far could you get?  When would you get your car back, with computer of course?  How would they respond if you asked: “Officer, please show me where in the books this is illegal?”  In which state would that question go over best?  Worst?

Liability and public opinion issues loom larger still.  The driverless car, if it proves feasible, is most likely to come first to a smaller, higher-trust nation such as Denmark.  In some countries, if the government announces “X is safe” people believe “X is safe.”  The United States is not one of those countries.

What happens if you respond to spam?

While doing some spam research a couple of years ago, we did a series of test purchases from spam e-mails.

We bought pills, software, cigarettes, et cetera. We were a bit surprised that almost all of the orders went through and actually delivered goods. Sure, the Windows CD we got was a poor clone and the Rolex was obviously fake, but at least they sent us something.

We were carefully watching the credit card accounts we created for our tests but we never saw any fraudulent use of them.

The most surprising outcome from this test was that we didn’t see more spam to the e-mail addresses we used to order the goods.

Via Eapen Thampy, the link is here and they cite a new study on spam (pdf), which is interesting throughout.  How does the financial side work?

One of the most interesting details in the study is this: almost all spam sales worldwide are handled by just three banks.

The banks? They were:

•  DnB NOR (a Norwegian bank)
•  St. Kitts-Nevis-Anguilla National Bank (in the Caribbean)
•  Azerigazbank (from Azerbaijan)

The next Fed nominee

1. Should have spent a lot of time talking to Republicans.

2. When meeting with Ron Paul, the following should come to his mind: “I have great respect for the proponents of hard money and I view them as one reason why America became great again, in the 1980s.  I know you think the minimum wage is worse than we at the Fed do, so please let me bring one argument to your attention.  Unemployment is very high now, perhaps in part because the minimum wage has raised forty percent in the midst of a downturn a few years ago.  But those statists in Congress simply will not vote to lower or abolish the minimum wage, damn them.  We can, however, surreptitiously lower the minimum wage in real terms with a bit of loose monetary policy.  I know you are not with us on this monetary issue, but if you find yourself having to strike a compromise of some kind, at least rest assured that a budge from your side would be liberating millions of lower-income Americans from slavery.  It could get us off the Road to Serfdom.”

The Fed governor doesn’t have to believe that, and may not wish to say exactly that, but a speech of that nature should come rather quickly to his or her mind.  If not, he or she is probably not the right nominee in the first place.  The Fed staff can figure out the rest.

Addendum: Matt Yglesias offers relevant comment.  Alternatively, Felix Salmon may be correct that there is no deal to be made with the Republicans.  In that case, a) Diamond would not have mattered anyway, and b) we still should base the choice upon the scenarios where the choice stands a chance of making a difference.  Furthermore, the Republican reps. do not have the same incentives as the Presidential candidate, so a deal may be possible after all.

The new British university model?

Well, it’s certainly star-studded. A new private university in London, devoted to the humanities, will have the philosopher and public intellectual A.C. Grayling as its “master.” Richard Dawkins will teach evolutionary biology, Niall Ferguson economic history, Steven Pinker psychology, and Ronald Dworkin the philosophy of law.

Christopher Shea has more.  Daniel Davies notes correctly that few if any of these illustrious names will be resigning their normal academic posts.  That is the real innovation of this business model.  Why not rent illustrious names rather than paying the whole set of fixed costs?  Then hire excellent teachers — mostly not top researchers — to provide most of the actual instruction.  If say Dawkins teaches an intensive two-week course, that is perhaps more than a student would see of him anywhere else, while benefits of certification and affiliation remain in play.  I predict this has a good chance of succeeding, and since the illustrious lecturers hold equity shares in the venture, their incentive is to talk it up.  It doesn’t have to outcompete Harvard, it simply has to draw international interest from students/families who cannot get into Harvard or who do not wish to donate the required $$.