Month: December 2011

Sentences against Madison

This concerns state legislatures, and the paper is from Noel Campbell and David Mitchell:

As political power is consolidated in either party, economic freedom increases. This is consistent with a model wherein the median voter has effective agency control with positive monitoring costs and prefers a particular level of so-called economic freedom. These results are inconsistent with Leviathan models of state legislatures.

In other words, in this setting divided government is leading to greater government power rather than limiting it.  Could the same be true at the federal level as well?

Hat tip goes to Kevin Lewis.

Teachers Don’t Like Creative Students

One of the most consistent findings in educational studies of creativity has been that teachers dislike personality traits associated with creativity. Research has indicated that teachers prefer traits that seem to run counter to creativity, such as conformity and unquestioning acceptance of authority (e.g., Bachtold, 1974; Cropley, 1992; Dettmer, 1981; Getzels & Jackson, 1962; Torrance, 1963). The reason for teachers’ preferences is quite clear creative people tend to have traits that some have referred to as obnoxious (Torrance, 1963). Torrance (1963) described creative people as not having the time to be courteous, as refusing to take no for an answer, and as being negativistic and critical of others. Other characteristics, although not deserving the label obnoxious, nonetheless may not be those most highly valued in the classroom.

….Research has suggested that traits associated with creativity may not only be neglected, but actively punished (Myers & Torrance, 1961; Stone, 1980). Stone (1980) found that second graders who scored highest on tests of creativity were also those identified by their peers as engaging in the most misbehavior (e.g., “getting in trouble the most”). Given that research and theory (e.g., Harrington, Block, & Block, 1987) suggest that a supportive environment is important to the fostering of creativity, it is quite possible that teachers are (perhaps unwittingly) extinguishing creative behaviors.

From Creativity: Asset or Burden in the Classroom?, a good review paper. What the paper shows is that the characteristics that teachers use to describe their favorite student correlate negatively with the characteristics associated with creativity. In addition, although teachers say that they like creative students, teachers also say creative students are “sincere, responsible, good-natured and reliable.” In other words, the teachers don’t know what creative students are actually like.  (FYI, the research design would have been stronger if the researchers had actually tested the students for creativity.)  As a result, schooling has a negative effect on creativity.

My experience as a parent is consistent with the idea that teachers don’t like creative students but I try not to blame the teachers too much. Creative people, for better and worse, ignore social conventions. Thus, it can be hard for teachers to deal with creative students in a classroom setting where they must guide 20-30 students en masse. As Jonah Lehrer puts it:

Would you really want a little Picasso in your class? How about a baby Gertrude Stein? Or a teenage Eminem? The point is that the classroom isn’t designed for impulsive expression – that’s called talking out of turn. Instead, it’s all about obeying group dynamics and exerting focused attention. Those are important life skills, of course, but decades of psychological research suggest that such skills have little to do with creativity.

One hope I have for personalized learning, ala the Khan Academy, is that  teachers will not feel the need to suppress creative students when classroom dynamics do not require that all the students follow all the rules all the time .

Hat Tip: Erik Barker.

Are we stagnating aesthetically?

Some of you have been emailing, asking for my opinion of this recent Kurt Andersen Vanity Fair article.  Here is the summary introductory paragraph:

For most of the last century, America’s cultural landscape—its fashion, art, music, design, entertainment—changed dramatically every 20 years or so. But these days, even as technological and scientific leaps have continued to revolutionize life, popular style has been stuck on repeat, consuming the past instead of creating the new.

There is plenty more at the link.  A serious response would require a book or more, so let me offer a few conclusions, noting that it’s not possible in blog space to defend these judgments at any length.  This is all about aesthetics, and it is distinct from the TGS technology argument, though one might believe that technical breakthroughs are needed to usher in aesthetic innovations, and that slowness in the one area would lead to slowness in the other.  That’s not a claim I’ve ever made, but it’s worth considering even if it can’t be settled very easily.  In any case, here’s my view of the evidence:

1. Movies: The Hollywood product has regressed, though one can cite advances in 3-D and CGI as innovations in the medium if not always the aesthetics.  The foreign product is robust in quality, though European films are not nearly as innovative as during the 1960s and 70s.  Still,  I don’t see a slowdown in global cinema as a whole.

2. TV: We just finished a major upswing in quality for the best shows, though I fear it is over, as no-episode-stands-alone series no longer seem to be supported by the economics.

3. Books/fiction: It’s wrong to call graphic novels “new,” but they have seen lots of innovation.  If we look at writing more broadly, the internet has led to plenty of innovation, including of course blogs.  The traditional novel is doing well in terms of quality even if this is not a high innovation era comparable to say the 1920s (Mann, Kafka, Proust, others).

4. Computer and video games: This major area of innovation is usually completely overlooked by such discussions.

5. Music: Popular music has been in a Retromania sludge since the digital innovations of the early 90s, but classical contemporary music continues to show vitality and it is even establishing some foothold in the concert hall and in nightclubs too.  Jazz has plenty of niche innovation, but it’s not moving forward with new, central ideas which command the attention of the field.

6. Painting and sculpture: Lots of good material, no breakthrough central movements comparable to Pop Art or Abstract Expressionism.  Photography has seen lots of innovation.

7. Your personal stream: This is arguably the biggest innovation in recent times, and it is almost completely overlooked.  It’s about how you use modern information technology to create your own running blend of sources, influences, distractions, and diversions, usually taken from a blend of the genres and fields mentioned above.  It’s really fun and most of us find it extremely compelling.  See chapter three of Create Your Own Economy/The Age of the Infovore.

8. Architecture: Slows down after 2008, but there were numerous innovative blockbuster buildings prior to the crash.

Today the areas of major breakthrough innovation are writing, computer games, television, photography (less restricted to the last decade exclusively) and the personal stream.  Let’s hope TV can keep it up, and architecture counts partially.  For one decade, namely the last decade, that’s quite a bit, though I can see how it might escape the attention of a more traditional survey.  Some other areas, such as the novel, global cinema, and the visual arts are holding their own and producing plenty of small and mid-size innovations.

Although that is a relatively optimistic take on the aesthetics of the last decade, it nonetheless supports the view that aesthetic innovation relies on technological innovation.  Most (not all) of the major areas of progress have relied on digitalization, and indeed that is the one field where the contemporary world has brought a lot of technological progress as well.

Put reason aside, how would you *feel*?

You meet an employed professional with a $300,000 house, $100,000 in the bank, a nice car, a few (illiquid) Renaissance paintings, and very nice shoes.  His name is Fabio.

He is $60,000 in debt, which is about equal to his yearly income.  An unanticipated ARM reset requires him to pay off that debt at a faster pace than expected, which means he must restrict his consumption.

He threatens to mistreat his longstanding girlfriend Angela, unless she works harder to maintain his previous level of consumption.  Angela refuses to help much, citing a false economic theory in defense of her position.

Fabio’s brother relentlessly attacks Angela’s false theory.  His cousin in Naples claims that Angela is obliged to help because she has benefited from being in the relationship.

The New Da Vinci Code?

Over at Digitopoly Joshua Gans says that the breezy style of Launching the Innovation Renaissance (Nook, iTunes) makes it a page-turner “reminiscent of Dan Brown.”!!! I take this to mean that the book will sell millions of copies and be turned into a movie starring Tom Hanks; this does seem unlikely but after the Moneyball and Freakonomics movies who can say? FYI, Joshua is more confident than I am that the Coase theorem applies to rent division.

Over at Slate, Matt Yglesias also offers a short review saying the worst thing about the book is that it is too short!

Nick Schulz interviewed me at The American on some of the book’s themes, the WSJ also published part of this interview in their Notable and Quotable section.

Favorite popular music of 2011

Here goes, in no particular order:

1. Abigail Washburn, City of Refuge.

2. Lykke Li, Wounded Rhymes.

3. James Blake, James Blake and also Enough Thunder.

4. St. Vincent, Strange Mercy.

5. Shabazz Palaces, Black Up.

6. Miles Davis, Live in Europe 1967.

7. This May be My Last Time Singing: Raw African-American Gospel on 45 RPM, 1957-1982, assorted artists.

8. Wilco, The Whole Love.

9. The Smile Sessions, The Beach Boys.

10. Indeed, by Oren Ambarchi and Jim O’Rourke (LP only, a real winner, beautiful sound).

11. Opika Pende, Africa at 78 RPM.

A few observations: Lots of good music this year, but I haven’t yet heard anything path breaking.  Most indie rock is overrated and overall it is a less vital genre than pop, although since the latter is centered around songs rather than albums it is underrepresented on this list.  The artist I listened to the most this year was probably Lonnie Mack, followed by John Fahey.  The two best concerts I saw were Satyagraha at the Met and Brad Mehldau and Joshua Redman playing together.  Indian classical music lost some of its leading lights.  I like both P.J. Harvey and Tom Waits, but at this point do I need to buy more music by them?  I still listen to Gilbert O’Sullivan sometimes.  Beck seemed like a distant memory.

Addendum: Here is a favorite music list from Angus.

Should speed limits be higher?

Arthur van Benthem, who is on the job market from Stanford, says no:

When choosing his speed, a driver faces a trade-off between private benefits (time savings) and private costs (fuel cost and own damage and injury). Driving faster also has external costs (pollution, adverse health impacts and injury to other drivers). This paper uses large-scale speed limit increases in the western United States in 1987 and 1996 to address three related questions. First, do the social benefits of raising speed limits exceed the social (private plus external) costs? Second, do the private benefits of driving faster as a result of higher speed limits exceed the private costs? Third, could completely eliminating speed limits improve efficiency? I find that a 10 mph speed limit increase on highways leads to a 3-4 mph increase in travel speed, 9-15% more accidents, 34-60% more fatal accidents, and elevated pollutant concentrations of 14-25% (carbon monoxide), 9-16% (nitrogen oxides), 1-11% (ozone) and 9% higher fetal death rates around the affected freeways. I use these estimates to calculate private and external benefits and costs, and find that the social costs of speed limit increases are three to ten times larger than the social benefits. In contrast, many individual drivers would enjoy a net private benefit from driving faster. Privately, a value of a statistical life (VSL) of $6.0 million or less justifies driving faster, but the social planner’s VSL would have to be below $0.9 million to justify higher speed limits. The substantial difference between private and social optimal speed choices provides a strong rationale for having speed limits. Although speed limits are blunt instruments that differ from an ideal Pigovian tax on speed, it is highly unlikely that any hidden administrative costs or unforeseen behavioral adjustments could make eliminating speed limits an efficiency-improving proposition.

Markets in everything: the market for magic tricks

Allen’s new new crop are the Internet magicians. “They’ve got a different approach and different goals. I’m not sure they even want to develop an act that they can perform live; they’re interested in making videos that go viral. From my viewpoint, it’s not a problem so much as it’s an interesting evolution.”

The full story is here, and for the pointer I thank Mark Thorson.

*The Stranger’s Child*, by Alan Hollinghurst

Although the initial reviews were only somewhat positive, I’ve been noticing how many times it has popped up on the year’s end “best of” lists.  And so I bought it.  It is indeed brilliant, and it is not out of line to compare it to top novels by Thackeray or Forster.  I used to think of Hollinghurst as “superb writer but not so much along my lines of interest,” but this one has won me over.

College Subsidies Fuel Salaries

“Who pays a tax is determined not by the laws of Congress but by the law of supply and demand,” as Tyler and I say in Modern Principles. In particular, whether demanders or suppliers pay a tax is determined by the elasticities of demand and supply. The more elastic side of the market can better escape a tax, leaving more of it to be paid by the inelastic side. The same thing is true for a subsidy but in reverse, the inelastic side of the market gets the benefit of the subsidy. Virginia Postrel applies the idea to education and education subsidies.

If you offer people a subsidy to pursue some activity requiring an input that’s in more-or-less fixed supply, the price of that input goes up. Much of the value of the subsidy will go not to the intended recipients but to whoever owns the input. The classic example is farm subsidies, which increase the price of farmland.

A 1998 article in the American Economic Review explored another example: federal research and development subsidies. Like farmland, the supply of scientists and engineers is fairly fixed, at least in the short run. Unemployed journalists and mortgage brokers can’t suddenly turn into electrical engineers just because there’s money available, and even engineers and scientists are unlikely to switch specialties. So instead of spurring new activity, much of the money tends to go to increase the salaries of people already doing such work. From 1968 to 1994, a 10 percent increase in R&D spending led to about a 3 percent increase in incomes in the subsidized fields.

“A major component of government R&D spending is windfall gains to R&D workers,” the paper concluded. “Incomes rise significantly while hours rise little, and the increases are concentrated within the engineering and science professions in exactly the specialties heavily involved in federal research.”

The study’s author was Austan Goolsbee, then and now a professor at the University of Chicago but until recently the chairman of the president’s Council of Economic Advisers.

….Goolsbee declined a recent request to comment on the subject, but the parallels to higher education are hard to miss.

In the short-term, the number of slots at traditional colleges and universities is relatively fixed. A boost in student aid that increases demand is therefore likely to be reflected in prices rather than expanded enrollments. Over time, enrollments should rise, as they have in fact done. But many private schools in particular keep the size of their student bodies fairly stable to maintain their prestige or institutional character.

…On the whole, it seems that universities are like the companies making capital equipment. If the government hands their customers the equivalent of a discount coupon, the institutions can capture at least some of that amount by raising their prices

…This doesn’t mean that colleges capture all the aid in higher tuition charges, any more than capital-equipment companies get all the benefit of investment tax credits. But it does set up problems for two groups of students in particular. The first includes those who don’t qualify for aid and who therefore have to pay the full, aid-inflated list price. The second encompasses those who load up on loans to fill the gaps not covered by grants or tax credits only to discover that the financial value they expected from their education doesn’t materialize upon graduation.

Addendum: Long time readers may remember my rebuttal to Krugman on a similar point. Liberal Order has graphs and further discussion.

Assorted links

1. Private equity and jobs, setting the record straight.

2. Honduras shrugged.

3. Further notes on the new European agreement, if indeed that is what it is, and good comments here, and good tweet in Spanish.

4. The Economist picks best books of the year 2011, including TGS.

5. A professional NHL hockey player speaks to the issue of hockey helmets and collective action problems.  Good, thoughtful piece, deeper than a lot of economic treatments of the same issue.

6. “our jet packs are here…”

Ask the boss

Nicolas Sarkozy, French president, on Friday outlined what he expected would happen as a result of the central bank’s move.

“Italian banks will be able to borrow [from the ECB] at 1 per cent, while the Italian state is borrowing at 6-7 per cent. It doesn’t take a finance specialist to see that the Italian state will be able to ask Italian banks to finance part of the government debt at a much lower rate.”

The article is here.  My earlier comments, sadly neglected by an otherwise attentive blogosphere, were here.

Markets in everything

A Craigslist ad:

$1 / 15ft² – need roommate for my occupy tent (financial district)

My step father gave me his old tent to use so I can occupy the financial district. I set up a few nights ago but the cops were able to kick me out by using a big german sheapard to scare me. I want a roommate to help set up a new camp and watch my back in case the NAzis with the GERMAN dog come back to kick me out. I also have a video camera we can share in case they harrass us.

I am clean and keep a neat tent. I shave and shower every other week, we can alternate so some one is always in the tent. My girlfriend will bring food so we don’t have to leave. $1.00 rent is due upon our agreement and is due on the first of every month. It is not refundable as your dollar symbolizes your dedication to the tent and our cause.

Cats are OK, but you are not free to contact this poster with services or other commercial interests.  For the pointer I thank David Gonzalez.