Brazil accepts genetically modified foods

The decision was made by a left-wing government, read Chris Mooney for some astute commentary. I have read a few books lately on genetically modified foodstuffs, Peter Pringle’s Food, Inc. was the most balanced. I’ve yet to see a case that the potential risks come close to outweighing the potential benefits. Remember the Green Revolution in agriculture? It saved millions of lives and elevated living standards around the world.

Does Milton Friedman believe in free will?

“In a sense we are determinists and in another sense we can’t let ourselves be. But you can’t really justify free will.”

So spoke Milton Friedman in a recent interview. Read here for the full account.

I have long felt that this whole issue poses great difficulties for the merit-based argument for the market. If people don’t “deserve” the value they create, the moral case against redistribution becomes weaker.

The usually crystal-clear Friedman also says the following about luck:

“My wife and I entitled our memoirs, ‘Two Lucky People.’ Society may want to do something about luck. Indeed the whole argument for egalitarianism is to do something about luck. About saying, `Well, it’s not people’s fault that a person is born blind, it’s pure chance. Why should he suffer?’ That’s a valid sentiment.”

So what are the implications of luck for public policy?

“You’ve asked a very hard question,” he said. In part, he added, because it’s not clear that what we think of as luck really isn’t something else. “I feel,” he said, “and you do, too, I’m sure, that what some people attribute to luck is not really luck. That people are envious of others, you know, `that lucky bastard,’ when the truth of the matter is that that fellow had more ability or he worked harder. So that not all differences are attributable to luck.”

How to improve our schools

William Ouchi, the well-known management theorist and consultant, just put out Making Schools Work. His more substantive recommendations include the following:

1. The school principal is an entrepreneur and fully in charge.

2. The school, not a central office, controls its own budget.

3. Everyone is accountable for student performance and for budgets.

4. Families have school choice.

Plus all the usual rhetoric of caring about learning.

Ouchi and co-author Lydia Segal claims that these principle are found in the (successful) public school districts of Edmonton, Seattle, and Houston, plus they are used by Catholic schools in Chicago, New York, and Los Angeles, again successfully. There is some fluff in this book, but it also offers a no-nonsense account of some practical value.

Facts about Prohibition

When browsing Nathan Miller’s recent New World Coming: The 1920s and the Making of Modern America, I came across the following nuggets:

1. Prohibition was originally a popular policy.

See this link for more background:

Temperance was not, as is sometimes thought, the campaign of rural backwaters; rather, temperance was on the cutting edge of social reform and was closely allied with the antislavery and women’s rights movements. Always very popular, temperance remained the largest enduring middle-class movement of the nineteenth century (‘Leaven 1978, 1984; Tyrell 1979; Gusfield 1986; Rumbarger 1989; Blocker 1989).

2. At first Prohibition advocates did not think enforcement would be very costly. The Anti-Saloon League estimated a sum of $5 million a year, Congress provided slightly more than this to hire 1500 agents.

3. A major setback came when a federal judge rule that physicians could prescribe whiskey for medicinal purposes. By the end of Prohibition, there were 10 million such prescriptions each year.

Vernon Smith

Newsweek magazine is running a feature article on last year’s Nobel Laureate and father of experimental economics (and our colleague) Vernon Smith. The most interesting part is toward the end, when the article discusses how experimental economics is improving real world business practices, such as allowing people within a firm to bet on which ideas will prove successful.

Wal-Mart Facts

Wal-Mart is the largest company in the world, measured by sales, $245 billion last year.

McKinsey estimates that one-eighth of the productivity gains of the late 1990s came from Wal-Mart.

Its $12 billion of imports from China account for a tenth of total U.S. imports from China.

It is estimated that Wal-Mart saved U.S. customers $20 billion last year.

82% percent of American households made a purchase at a Wal-Mart last year.

On the darker side, it pays lower wages and “censors” music and magazines.

And do you worry about monopoly or monopsony power? In this context I don’t, frankly, except for the cultural/censoring issue, but still it is worth noting that Wal-Mart’s U.S. market share of consumer staples could hit 50% by the end of the decade.

From Business Week , which has a long cover article, “Is Wal-Mart Too Powerful?”

Here are two more facts:

1. It is the biggest employer in 21 states, with more people in uniform than the U.S. Army

2. Every year the company loses $2 billion in theft, this “enterprise” alone would rank #694 on the Fortune 1000.


Tomorrow’s bathroom?

Trying to predict future technologies is as futile as it is fascinating. I was struck by the following bit from Bruce Sterling’s Tomorrow Now: Envisioning the Next Fifty Years:

You’re not made out of digital bits – like all living things, you are made mostly out of water. So that’s where you sensibly place your high-tech investments.
You don’t have a “shower stall.” You have a standard, everyday body-imaging system that gives you complete interior and exterior health scans every morning as it washes you. Your toothbrush scans the contents of your moth and catalogs its microorganisms. Your toilet is the most sophisticated network peripheral in the home. It provides you with vital metabolic information about your body – the substances that enter and leave it and the vital processes within it. Only fools are squeamish about this.

Here is an interview with Sterling about the book, he says: “I think the scenario is 70% muddle along, 15% do really great, 15% hit the skids big time.”

Capital stock depreciation

Giorgione, one of the most significant painters of the Venetian Renaissance, is represented today by only four works we can be entirely confident are wholly his. Only ten authenticated paintings by Leonardo da Vinci are now in existence. A small fraction of Mantegna’s majestic output survives in reasonable condition. We have forty-eight paintings by Hieronymus Bosch; literary sources indicate there were once at least twice as many. Only a third of the works lovingly described by Vasari in his Lives of the Painters are now known. We have thirty-six Vermeers. He was a slow worker, to be sure, but he made his living as a painter for nearly a quarter of a century and is believed to have finished nearly a hundred.

Of course all capital depreciates. The mean service life of an office building is thirty-six years, and most components of the capital stock are not close to being this durable.

The quotation is from Art: A New History, the very latest book by public intellectual Paul Johnson.

Who is stingy?

I found this list of charitable donations per capita for a handful of countries, of course beware of cross-country measurement problems. The amounts are in Euros-per-capita.


Czech Republic……………25

My source is the excellent blog, the post also offers some good observations on inequality, this is what a cultural critic sounds like when he is properly skeptical and appreciative of the rich at the same time.

Gamblers are financially conservative

Well, sort of. Read this:

The Roper ASW survey of 2,000 Americans finds that despite a penchant for taking risks, wagerers are relatively conservative with money at home: 61% say they always or almost always pay off their credit cards every month, compared with 52% of the general population. Saving money in a retirement plan was cited by 50% vs. 40% of the general public.

Financial conservatism also marks gamblers’ shopping habits. The typical player is a coupon clipper (56%, compared with 51% of the general population) and buys in bulk to save (47% vs. 35%). The survey’s margin of error is plus or minus 3 percentage points.

N.B.: This is a survey, not a regression controlling for the relevant variables.

And who gambles?:

The survey pegged median household income for casino gamblers at $50,716 vs. $42,228 for the population as a whole…The typical bettor? A woman. The survey finds 54% of gamblers are female. The typical gambler also is aging: 57% are older than 50. And gamblers are not the flashy card sharks portrayed on TV. Most like pulling the slots; 74% say it’s their casino favorite. Just 14% say they prefer table games like blackjack.

Here is the study of gamblers, and here is the Roper home page. The study description and quotations are from USA Today.

This reminded me of Gordon Tullock

Security at diamond mines the world over makes antiterrorism security efforts at airports look like they’re conducted by the Boy Scouts. In Namibia, for instance, at the De Beers-owned Oranjemund claim, the only cars in the town in the 1970s were company cars that could never leave its borders. Private vehicles were banned when an enterprising engineer removed several bolts from the chassis of his car, bored out the middle for holding diamonds, and then screwed them back in tight. The fact that he was actually caught is testament in itself to how high the security was; from then on, De Beers outlawed new cars. All vehicles in the town had to stay there until they rusted away. One worker at the same site stole diamonds by tying a small bag to a homing pigeon, which would fly the diamonds back to his house. One day, he got too ambitious and overloaded his winged courier; the pigeon was so laden with stolen diamonds, it couldn’t fly over the fence and was discovered by security guards a short time later. They reclaimed the diamonds and let the bird go, following it to the man’s home, where he was arrested after work.

From Greg Campbell’s recent Blood Diamonds: Tracing the Deadly Path of the World’s Most Precious Stones.

Doctors are very ignorant of statistics

Here is a bit from Gerd Gigerenzer:

The science fiction writer H G Wells predicted that in modern technological societies statistical thinking will one day be as necessary for efficient citizenship as the ability to read and write. How far have we got, a hundred or so years later? A glance at the literature shows a shocking lack of statistical understanding of the outcomes of modern technologies, from standard screening tests for HIV infection to DNA evidence. For instance, doctors with an average of 14 years of professional experience were asked to imagine using the Haemoccult test to screen for colorectal cancer. The prevalence of cancer was 0.3%, the sensitivity of the test was 50%, and the false positive rate was 3%. The doctors were asked: what is the probability that someone who tests positive actually has colorectal cancer? The correct answer is about 5%. However, the doctors’ answers ranged from 1% to 99%, with about half of them estimating the probability as 50% (the sensitivity) or 47% (sensitivity minus false positive rate). If patients knew about this degree of variability and statistical innumeracy they would be justly alarmed.

The lead is from Crooked Timber, through

The jobless recovery?

Allan Meltzer argues that employment is growing, albeit not in a strong or robust fashion. His explanation: many former employees are being rehired as contractors, and our employment statistics do not measure this trend accurately.

Here is the relevant statistical issue, according to Meltzer:

There are two sources of labor market statistics, the Establishment Survey and the Household Survey–both conducted by the Labor Department. The first asks manufacturing and service sector companies how many employees they have. The second asks a sample of people whether they have jobs. The two give different answers and, important right now, the difference changes systematically over time. The reason is that the number of companies does not remain fixed. In our dynamic economy, old firms die and new ones are born. The Labor Department learns about the deaths quickly, but it takes longer to learn about the births.

Nor is the longer-term record of the Bush administration on employment as dismal as is commonly believed:

For the year ending in August, the Establishment Survey shows a loss of 463,000 jobs. The Household Survey shows that the economy added 313,000 new jobs in the same period. The Establishment Survey also shows the much discussed job loss since the Bush administration took office–2.7 million jobs. The Household Survey reduces the loss to 220,000, not good but far more typical of a period with recession and slow recovery. As the speed of recovery picks up, the latter loss will disappear by early next year.

Revisit this post in a few days for an addendum, I will let you know if there is any reaction to this argument (Brad DeLong once wrote a critique of Meltzer) in the blogosphere.

Thanks to John Charles for the pointer to the original article.

Addendum: Brad DeLong offers critical commentary on Meltzer’s argument.

Why did it take so long to integrate baseball?

The Chicago/UCLA approach has long suggested that if black or minority workers are underpaid, for reasons of discrimination, an employer would find it profitable to hire them and bid up their wages. I have long since wondered why it took major league baseball so long to play African-Americans. The “Negro Leagues” had been around a long time, with many talented players, but Jackie Robinson did not debut for the Brooklyn Dodgers until 1947.

Here is one suggested answer, from a recent book Jackie Robinson and the Integration of Baseball:

…a showboat minor league operator named Bill Veeck…wanted to buy the Philadelphia Phillies and stock it with aging Negro League stars while younger white major and minor league players were at war. A team with, say Satchel Paige, Josh Gibson, and Ray Dandridge might well have won a World Series…But baseball commissioner Kenesaw Landis disapproved of the idea. He didn’t care for Bill Veeck, he didn’t trust his money, and he certainly didn’t endorse his scheme. What if Philadelphia’s fans decided that they liked winning and didn’t want to return to segregated, second-divison baseball?

In other words, the league structure of major league baseball allowed for collusion and thus enforceable discrimination, through the medium of the commissioner.

The book also relates that club owners had a financial incentive to keep the Negro Leagues going. Commonly the club owners rented out their stadiums to the Negro League clubs, often reaping more than $100,000 a year from this source of income.

It is worth noting that jockeys, bicyclists, runners, and boxers — all more individualistic sports — saw integration much earlier. But in basketball, another league sport, the first black entered the NBA in 1950. Football is a more complicated story, showing integration followed by a segregation in the 1930s, followed by reintegration in the 1940s, read here for one account, I hope to cover football in more detail in a future post.

Chess and mixed strategies

Many laboratory experiments fail to find evidence for the game-theoretic concept of “mixed strategies.” But Doru Cojoc, a graduate student at Clemson University, looks at data taken from the world of chess, where high prizes are on the line and we find repeated games between the same players (there is no copy of the paper on the web).

A player might prefer one opening move over another (e.g., “1. e4” vs. “1. d4”), but if a player always uses his favorite, the opponent will find it easier to prepare a defense. So players tend to vary their opening moves in an effectively random manner, as confirmed by Cojoc’s data from championship matches. The returns to differing opening moves end up being the same, in expected value terms, even though players have their favorites. Note: For purposes of contrast, I would like to see if chess champions do any better with their favorite moves in non-repeated settings, Cojoc says he is working on this.

Doru tells me he is also preparing work on whether chess players ever reason using backwards induction strategies. And click here for a lead on the Chiappori, Steve Leavitt, and Tim Groseclose paper on mixed strategies in soccer.

By the way, did you know that for world championship games since 1951, the player with white is more than twice as likely to win as the player with black (26% white wins, 12% black wins, 61% draw)?

Thanks to Bob Tollison for the pointer on this work.