The dangers of IQ
By the title alone you know that IQ and the Wealth of Nations is going to be a controversial book. The book was recently reviewed, largely negatively but on scientific grounds without any charges of racism, in the Journal of Economic Literature (subs. required). What I didn’t know was that one of the authors, Professor Tatu Vanhanen, is the father of Finnish Prime Minister Matti Vanhanen. The professor’s words, therefore, have become a lightning rod for opponents of Matti Vahanen. So much so that the Finnish police considered whether to launch a criminal investigation of Professor Vanhanen for his comments on IQ, race, and the wealth of nations in a magazine interview. In the end, the police concluded that the Professor did not incite “racial hatred,” nevertheless I find the episode rather chilling.
Addendum: Here are some brave economists on this issue. Thanks to Gene Expression and Randall Parker for the pointer.
Guest Blogger: Eric Helland
We are very pleased to have Eric Helland guest blogging with us. Eric has just finished a year as a senior economist with the President’s Council of Economic Advisers. So now instead of writing pithy statements of economic wisdom for the President he will be writing them for you. A tradeoff perhaps of power for attention. Eric is now back at Claremont-Mckenna College in California. He is the co-author of many brilliant papers (see here) as well as the co-author of many other very good papers (see here). We are delighted to have him with us.
The glory of Athens
Politicians often refer to our Judeo-Christian heritage but in math, science, philosophy, and especially politics we owe much more to our Greco-Roman heritage. Consider; democracy, republicanism, and the rights of citizenship, these idea owe virtually nothing to the Judeo-Christian tradition and everything to Greece and Rome.
I am reminded of this by rereading Pericles’ Funeral Oration. Here, from nearly 2500 years ago, is Pericles, in the midst of war in a ceremony to honor the dead he speaks to Athens, and also perhaps to us, about liberty and war.
If we turn to our military policy, there also we differ from our antagonists. We throw open our city to the world, and never by alien acts exclude foreigners from any opportunity of learning or observing, although the eyes of an enemy may occasionally profit by our liberality; trusting less in system and policy than to the native spirit of our citizens; while in education, where our rivals from their very cradles by a painful discipline seek after manliness, at Athens we live exactly as we please, and yet are just as ready to encounter every legitimate danger.
Lost in Translation
Here from a survey of translators are the top ten most difficult to translate words.
THE TEN FOREIGN WORDS THAT WERE VOTED HARDEST TO TRANSLATE
1 ilunga [Tshiluba word for a person who is ready to forgive any abuse for the first time; to tolerate it a second time; but never a third time. Note: Tshiluba is a Bantu language spoken in south-eastern Congo, and Zaire]
2 shlimazl [Yiddish for a chronically unlucky person]
3 radioukacz [Polish for a person who worked as a telegraphist for the resistance movements on the Soviet side of the Iron Curtain]
4 naa [Japanese word only used in the Kansai area of Japan, to emphasise statements or agree with someone]
5 altahmam [Arabic for a kind of deep sadness]
6 gezellig [Dutch for cosy]
7 saudade [Portuguese for a certain type of longing]
8 selathirupavar [Tamil for a certain type of truancy]
9 pochemuchka [Russian for a person who asks a lot of questions]
10 klloshar [Albanian for loser]
†¢ THE TEN ENGLISH WORDS THAT WERE VOTED HARDEST TO TRANSLATE
1 plenipotentiary
2 gobbledegook
3 serendipity
4 poppycock
5 googly
6 Spam
7 whimsy
8 bumf
9 chuffed
10 kitsch
My take: It’s rather common to hear that language determines thought and thus if a language has no words for a concept then that concept can’t really be understood by a speaker of that language. I find this theory difficult to believe (perhaps it was first proposed in a language other than English.) If the theory is true, however, I would like to learn the language where “spam” is untranslatable.
Dutch Auction IPO
Here is a nice graphic from the NYTimes explaining the Dutch auction IPO. I think Google’s IPO will be a success, it will raise more money for Google than a traditional IPO with its high transactions costs (which flow to the investment banks). Remember the standard to measure success is the cost per dollar of raised funds it is not whether the stock price hits a predefined target and not whether the stock pops. Indeed, Google’s stock price is unlikely to pop. The success of a traditional IPO is often counted by the size of the pop but that is ridiculous. A pop means the firm left money on the table – money which was transferred to a handful of insiders who were allocated stock at the low IPO price. A pop is thus the sign of a bad IPO not a good one. The Dutch auction method ensures that the initial price is a market price (thus Google’s price is unlikely to plummet either). There has been a lot of negative publicity about the Google IPO but my guess is that this was stirred up by the investment banks who are fearful that their halcyon days are ending.
That’s [Not] All Right
Elvis Presley is on the charts again but the owners of That’s All Right are worried because as of January 1 2005, Presley’s 50 year old classic enters the public domain in Europe.
Under current EU law, sound recordings are classified as “performance” and copyrighted for a period of 50 years. This is not to be confused with compositions, which remain in copyright for the artist’s lifetime plus 70 years…
Nevertheless what this law does mean is that, from January, anyone may store, share, swap or commercially release That’s All Right without recourse to RCA, who currently own rights to the track as part of their back catalogue. …
Faced for the first time with losing significant back catalogue profits, the industry is lobbying to change the law. …[But]for every one recording that has the power to reach number three in the commercial charts fifty years after its original release, there are hundreds if not thousands of tracks that do not.
Although these recordings no longer have any commercial value to their rights holders, they are of tremendous value in terms of our cultural heritage. But the mechanisms of copyright law mean that, should the European Parliament choose to heed the music industry, keeping Elvis out of the public domain for a further 45 years or even more, the King will drag down with him this huge body of commercially worthless but culturally significant work.
Works of no commercial value will be orphaned, languishing in forgotten store cupboards at record company headquarters when they could be enjoying a digital rebirth in the public domain.
A solution to this problem is already in use for patents. Renewal fees. Renewal fees for copyright extension would allow Disney, RCA and those few others with very valuable property rights to maintain those rights while at the same time the vast majority of “commercially worthless but culturally significant work” would flow into the public domain.
Note that I am not arguing that we should extend the rights of Disney, I stand with my betters in seeing little benefit to doing so, but if political pressures force policy in that direction we need not lock everything up in order to protect the few cash cows. A renewal system should be politically viable because the fees can be made low enough so as not to greatly concern Disney or RCA, yet high enough so that most works will flow to the public domain. Owners of profitable works will benefit and owners of non-profitable works will not be harmed.
Aside: Suzanne Scotchmer has an important but difficult paper arguing that renewal fees can be optimal. Here is another clever idea to improve the patent system. As usual email me if you can’t access the link.
The Times they are a changing
Russ Roberts gets some satisfaction from the NYTimes. Way to go Russ!
Going for the gold
This sort of nonsense gives property rights a bad name.
Strict regulations published by Athens 2004 last week dictate that spectators may be refused admission to events if they are carrying food or drinks made by companies that did not see fit to sponsor the games.
Sweltering sports fans who seek refuge from the soaring temperatures with a soft drink other than one made by Coca-Cola will be told to leave the banned refreshment at the gates or be shut out. High on the list of blacklisted beverages is Pepsi, but even the wrong bottle of water could land spectators in trouble.
Thanks to Boing, Boing, Blog for the link.
Report on Transhumanism
Ron Bailey reports on The World Transhumanist Association’s annual conference. Plently of interesting material on the prospects for life-extension and other improvements. Perhaps the most optimistic speaker, however, was my colleague Robin Hanson.
George Mason University economics professor Robin Hanson argued that super-rational posthumans in the future won’t be able to “agree to disagree,” chiefly because they’ll agree on everything. Hanson argues that disagreements among less than super-rational people today exist largely because we deceive ourselves about what we really know to be true. There are good “reasons” for us to think that, for example, “the more you believe in yourself, the more you can get other people to believe in you,” and thus get them to do what you want. But super-rational posthumans won’t be able to deceive themselves or others, suggests Hanson.
I shall have to discuss this with him at lunch tomorrow but only if we can agree on what restaurant to eat at.
Putting a Bounty on Osama
The gang over at Crooked Timber are having a good time laughing at James Miller’s suggestion to increase the bounty on Osama bin Laden.
I’m puzzled, don’t the gang know that the United States has been putting bounties on terrorists since 1984? Or that Qusay and Uday Hussein were located due to a reward – as was Al Qaeda leader Khalid Sheikh Mohammed, as was Ramzi Yousef, the mastermind of the 1993 WTC bombing as were the terrorists responsible for the destruction of Pan Am 103? Could the gang be unaware that in the United States bounty hunters have a better record than the public police both at preventing bail jumping and apprehending fugitives once they have jumped bail?
Regular readers of MR will, of course, be better informed. By the way, my paper on the US system, The Fugitive: Evidence on Public versus Private Law Enforcement from Bail Jumping has just been published in the Journal of Law and Economics or email me if you don’t have access to the JLE.
Ironic headline
Bribery Inquiry Needs Money, Its Chief Says. (Alas, the headline was changed in the online version demonstrating that unlike the writers at the Economist the NYTimes has no sense of humor.)
Royal Purple
Why was purple considered the royal color? The answer lies in economics not in aesthetics. Purple is rare in nature. A Toga’s worth of Tyrian purple die, about 1.5 grams, required the beating, drying and extracting of mucus from the hypobranchial gland of some twelve thousand Murex mollusks.
Legend credits its discovery to Herakles, or rather to his dog, whose mouth was stained purple from chewing on snails along the Levantine coast. King Phoenix received a purple-dyed robe from Herakles and decreed the rulers of Phoenicia should wear this color as a royal symbol.
The practice was later adopted by the Romans; to wear purple, therefore, was to show off your great wealth. Purple is an interesting example of a snob or Veblen good because it is clear that if purple had not been expensive it would not have been greatly desired. Indeed, do we see any great demand for purple today? If purple paint were say 25 or 50% more expensive then people would switch to substitutes but make it 500 or 1000 times as expensive and it becomes a fashion statement.
The quote is from here, more information than you would ever want to know about Tyrian purple is here.
Decentral Intelligence Agency
I have yet to see a good argument for creating a new director of intelligence. It’s true that the intelligence agencies failed to share information. But an epi-central director of intelligence doesn’t solve that problem and may make it worse. The implicit model of the 9/11 Commission is command and control – move all the information from the roots of the tree to the top of tree and then one all-encompassing-mind will evaluate it and make the right decision. Does that model sound familiar? Sure it does, that’s the model of economic planning that is currently lying on the ash-heap of history. It’s the model that Mises and Hayek subjected to withering criticism in the socialist calculation debate of the 1930s.
In brief, consider the following two defects of the economic Czar model. First, even if the information were to make it all the way to the top it would be difficult, well nigh-impossible, for a single mind to grasp it all and make it useful. This is especially true when there are no prices and hence no way of aggregating the information into a common unit (the so-called terror market was one way of alleviating this problem). Second, information is lost as it moves up the hierarchy – it has to be because not all information is easily communicable, bandwidth isn’t infinite, and the people at the top demand information loss because as you move up the tree the amount of information becomes overwhelming.
An intelligence-Czar faces exactly the same problems. So what can be done? The intelligence agencies need tools that can spread information rapidly and widely and that are open to anyone with information whether they are at the bottom or the top of the hierarchy…Sound familiar? Yes, blogs and wikis are the right idea. And no I am not being flip. A central information repository that everyone can access may be part of the solution but centralizing information is not the same as centralizing decision making authority (remember “groupthink?” – the solution to our intelligence problems must face the problems of 9/11 and the problems of Iraq which are not the same.) Other ideas are to reward information sharing instead of hoarding – we should probably classify less information not more – and to rotate staff across bureaus in order to encourage collaboration and informal information sharing. Others more expert in this area will have more specific suggestions but my primary suggestion is that the models to follow are those of markets, webs, and networks.
Addendum: See also Tyler’s related and important discussion.
Wonder Bread
I’ve been buying this organic bread recently. I’m not a big organic guy (could you guess?) but it’s low-carb and yet doesn’t taste like cardboard. Several times, however, the bread has gone moldy within a day or two. Yuck. So I took some back to the store all indignant about how I only just bought this bread and now its moldy. The clerk explained it to me – heh, it’s organic – no preservatives, get it? Oh, that’s what preservatives do. I will never question civilization again.
Regulating sex work
In June of 2003, New Zealand decriminalized prostitution. As a result, the industry fell under the aegis of the NZ Occupational Safety and Health Service who have produced a Jocelyn Elders? Alas, the New Zealanders are not so liberal with regard to other policies – you can go to a brothel, for example, but don’t try lighting up after sex or you will be in contravention of the law.
All of this reminds me of the following IQ test question:
What is the minimum number of condoms required for safe sex in each case:
(a) two men with two women
(b) one man with three women or three men with one woman
(c) three men with each other
(d) 2k+1 men with one woman
(e) m men and n women
Is there anyone in the world smart enough to figure out the answer and lucky enough to find the knowledge useful? Answers here in case you are simply lucky.
Addendum: Tyler also wrote about condoms recently. I promise we will get back to economics soon. Of course, the great Richard Posner did write a whole book about sex so we have strong precedent for these discussions. More information on the regulation of prostitution can be found at Wikipedia. Thanks to Eric Crampton for the link.