The rant against Amazon and the rant for Amazon

Wow! It’s unbelievable how hard you are working to deny that monopsony and monopoly type market concentration is causing all all these issues. Do you think it’s easy to compete with Amazon? Think about all the industries amazon just thought about entering and what that did to the share price of incumbents. Do you think Amazon doesn’t use its market clout and brand name to pay people less? Don’t the use the same to extract incentives from politicians? Corporate profits are at record highs as a percent of the economy, how is that maintained? What is your motivation for closing your eyes and denying consolidation? It doesn’t seem that you are being logical.

That is from a Steven Wolf, from the comments.  You might levy some justified complaints about Amazon, but this passage packs a remarkable number of fallacies into a very small space.

First, monopsony and monopoly tend to have contrasting or opposite effects.  To the extent Amazon is a monopsony, that leads to higher output and lower prices.

Second, if Amazon is knocking out incumbents that may very well be good for consumers.  Consumers want to see companies that are hard for others to compete with.  Otherwise, they are just getting more of the same.

Third, if you consider markets product line by product line, there are very few sectors where Amazon would appear to have much market power, or a very large share of the overall market for that good or service.

Fourth, Amazon is relatively strong in the book market.  Yet if a book is $28 in a regular store, you probably can buy it for $17 on Amazon, or for cheaper yet used, through Amazon.

Fifth, Amazon takes market share from many incumbents (nationwide) but it does not in general “knock out” the labor market infrastructure in most regions.  That means Amazon hire labor by paying it more or otherwise offering better working conditions, however much you might wish to complain about them.

Sixth, if you adjust for the nature of intangible capital, and the difference between economic and accounting profit, it is not clear corporate profits have been so remarkably high as of late.

Seventh, if Amazon “extracts” lower taxes and an improved Metro system from the DC area, in return for coming here, that is a net Pareto improvement or in any case at least not obviously objectionable.

Eighth, I did not see the word “ecosystem” in that comment, but Amazon has done a good deal to improve logistics and also cloud computing, to the benefit of many other producers and ultimately consumers.  Book authors will just have to live with the new world Amazon has created for them.

And then there is Rana Foroohar:

“If Amazon can see your bank data and assets, [what is to stop them from] selling you a loan at the maximum price they know you are able to pay?” Professor Omarova asks.

How about the fact that you are able to borrow the money somewhere else?

Addendum: A more interesting criticism of Amazon, which you hardly ever hear, is the notion that they are sufficiently dominant in cloud computing that a collapse/sabotage of their presence in that market could be a national security issue.  Still, it is not clear what other arrangement could be safer.

Tax salience and the new Trump tariffs

That is the topic of my latest Bloomberg column.  Here is one excerpt:

…tariffs distort consumer decisions more than sales taxes do. It may well be true that consumers don’t notice tariffs as such. But they respond by buying less, lowering their well-being and also possibly lowering GDP and employment.

It gets worse yet. President Donald Trump’s tariffs typically are applied to intermediate goods coming from China, such as circuit boards and LCD screens. The end result is more expensive computers at the retail level. But most consumers see only the higher price for computers. They probably don’t know which intermediate goods Trump put the tariffs on, and for that matter many U.S. consumers probably don’t even know what circuit boards are, much less where they come from.

The end result is that the tariffs are somewhat invisible, or at least they are invisible as tariffs. It’s highly unlikely there will be mass protests against a 10 percent tariff on circuit boards. No one will get “circuit board tariff charge” bill in the mail, as they might with their property taxes, and unlike gasoline, people don’t buy computers very often.

Most generally, it can be said that the new Trump policy makes the high prices salient, but the underlying tariffs not very salient at all. This is the worst possible scenario. The higher prices will reduce consumption and output, yet the invisibility of the tariffs will limit voter pushback.

Do read the whole thing.

What should Robert Wiblin ask Tyler Cowen?

Robert will be interviewing me later this week, as an installment of Conversations with Tyler, just as Patrick Collison once interviewed me a while back.  At least part of the interview will focus on my forthcoming book Stubborn Attachments: A Vision of a Society of Free, Prosperous, and Responsible Individuals.  (And we will do 2.5 hours, a Robert specialty!)  Here is part of Robert’s bio:

I studied both genetics and economics at the Australian National University (ANU), graduated top of my class and was named Young Alumnus of the Year in 2015.

I worked as a research economist in various Australian Government agencies including the Treasury and Productivity Commission.

I then moved to Oxford in the UK to work at the Centre for Effective Altruism, first as Research Director and then Executive Director.

I then became Research Director for 80,000 Hours. In 2015 the project went through Y Combinator, and in 2016 we moved from Oxford to Berkeley, California in order to grow more quickly.

He is renowned for his thorough preparation and he runs a very good podcast of his own.  So what should he ask me?

The future of retail surveillance?

“We learn behaviors of what it looks like to leave,” said Michael Suswal, Standard Cognition’s co-founder and chief operating officer. Trajectory, gaze and speed are especially useful for detecting theft, he said, adding, “If they’re going to steal, their gait is larger, and they’re looking at the door.”

Once the system decides it has detected potential theft behavior, a store attendant will get a text and walk over for “a polite conversation,” Mr. Suswal said.

Here is more from Nellie Bowles at the NYT, via Michelle Dawson.

Are generational or cohort-level changes strong?

Here is the view of Kali H. Trzesniewski and M. Brent Donnellan, in their piece “Rethinking “Generation Me”: A Study of Cohort Effects from 1976-2006”:

Social commentators have argued that changes over the last decades have coalesced to create a relatively unique generation of young people. However, using large samples of U.S. high-school seniors from 1976 to 2006 (Total N = 477,380), we found little evidence of meaningful change in egotism, self-enhancement, individualism, self-esteem, locus of control, hopelessness, happiness, life satisfaction, loneliness, antisocial behavior, time spent working or watching television, political activity, the importance of religion, and the importance of social status over the last 30 years. Today’s youth are less fearful of social problems than previous generations and they are also more cynical and less trusting. In addition, today’s youth have higher educational expectations than previous generations. However, an inspection of effect sizes provided little evidence for strong or widespread cohort-linked changes.

The pointer is from @hardsci.  As he (Sanjay) notes on Twitter: “Researchers these days just don’t make cohort arguments like they used to”  And here are some related results on narcissism.

Ain’t no $20 bills on this Cambridge sidewalk…not any more…

An art installation made up of £1,000 worth of penny coins left in a disused fountain disappeared in just over one day.

The 100,000 pennies were placed in the fountain at Quayside in Cambridge at 08:00 BST on Saturday and were due to be left for 48 hours.

All of the coins were gone by 09:00 BST on Sunday, but the In Your Way project is not treating it as theft.

Artistic director Daniel Pitt said it was “a provocative outcome”.

The work, which used money from an Arts Council England lottery grant, was one of five pieces staged across the city over the weekend.

Cambridge-based artist Anna Brownsted said her fountain piece “was an invitation to respond, a provocation”.

Here is the full story, via Adam, S. Kazan.

Who has led the most interesting life?

In recent times, that is.  Devon Zuegel asks:

Who would you name as a contender for having led the most interesting life in the last 100 years?

Keynes pops to mind as one contender.  He was a top-tier intellect and economist, he was closely connected to the arts, had plenty of brilliant Bloomsbury people to chat with, married a ballerina, played a major role in politics several times, and he participated in several critical and indeed formative moments of history (Treaty of Versailles, fiscal policy, Bretton Woods).  He experienced both world wars (no one said “interesting” has to be good!).  Still, he didn’t travel enough to be a slam dunk (I can’t quite bring myself to write “nor did he have the internet.”)

How about Bill Clinton?  He was president twice, oversaw the 1990s, has indeed traveled the world, and known many of the most interesting people of his lifespan.  He also has had rather, um…diverse…experiences in one realm of life.  And he married Hillary.

Paul McCartney was a Beatle, wrote amazing songs and hung out with John Lennon, had domestic bliss with Linda for a few decades, raised lots of kids, was successful as a businessman, and also has a history of…um…diverse experiences.  But did he smoke too much pot?

This list of “best lives” includes Hugh Hefner, Tyra Banks, and Elon Musk.  Here is one Quora answer for “most interesting”:

Personally, I find the following people intriguing: Jesus Christ, Martin Luther King, Sir Isaac Newton, Galileo Galilei, Marie Curie, Diego Maradona, Michael Jordan, Socrates/Aristotle/Plato, Samori Toure, Nelson Mandela, Michel de Nostredame. It’s a long list. There are even some historical figures that I do not admire, but would like to know more about – people such as Joseph Stalin, Napoleon Bonaparte, Judas Isacriot, among so many others.

I hope you are not offended if I rule some of those lives out on grounds of insufficient length, or too much time spent in prison.  Here is a list of interesting writers’ lives, topped by Ernest Hemingway.

Contrarian but not crazy answers would cite the person who raised the greatest number of children, the person who lived the longest in decent health, “whoever you are,” and the person who has traveled the most, at least adjusting for the quality of the trips (working on an oil tanker may not count).

Is it possible for a very famous person to win this designation?  Their very fame limits the possible range of experiences they have, and perhaps at some margin the consumption of additional status and adulation, however fun (?) it may be, just isn’t all that interesting.  Can Paul McCartney or Bill Clinton go out in public much?  Is the real answer someone most people never have heard of?

Who is your nominee?

Markets in everything

I am surprised issues of this kind have taken so long to surface:

Amazon is investigating claims that employees accepted bribes to disclose confidential data that would give sellers that use its marketplace a competitive advantage. The company confirmed the investigation following a report in the Wall Street Journal that Amazon employees, working through brokers, have sold internal sales data, the email addresses of product reviewers, and the ability to delete negative reviews and restore banned accounts. “We are conducting a thorough investigation of these claims,” an Amazon spokeswoman said.

These practices seem to be a particular problem in China, though not only.  Here is more from Shannon Bond at the FT.  Here is further coverage at Verge: “The WSJ also reports that it costs roughly $300 to take down a bad review, with brokers “[demanding] a five-review minimum” per transaction.”

The future of football, revisited

On one hand:

Ratings for regular-season games fell 17 percent over the past two years, according to Nielsen, and after one week of play in the new season, viewership has been flat. February marked the third-straight year of audience decline for the Super Bowl and the smallest audience since 2009. Youth participation in tackle football, meanwhile, has declined by nearly 22 percent since 2012 in the face of an emerging scientific consensus that the game destroys the brains of its players.

On the other hand, how many other focal experiences are left:

Yet even a middling franchise, the Carolina Panthers, sold in May for a league record  $2.3 billion. Advertisers spent a record $4.6 billion for spots during NFL games last season, as well as an all-time high $5.24 million per 30 seconds of Super Bowl time. The reason is clear: In 2017, 37 of the top 50 broadcasts on U.S. television were NFL games, including four of the top five.

The Green Bay Packers, the only NFL team that shares financial statements with the public, has posted revenue increases for 15 straight seasons. Leaguewide revenue has grown more than 47 percent since 2012. Commissioner Roger Goodell’s official target is $25 billion in revenue by 2027, or roughly 6 percent annual growth.

“The business of the NFL is very strong and continues to get stronger,” says Marc Ganis, president of the consulting firm Sportscorp Ltd., and an unofficial surrogate for league owners.

But what will happen if the number of brain damage cases continues to rise?  Here is more from Ira Boudway and Eben Novy-Williams at Bloomberg.

For the pointer I thank Ray Lopez.

Texas likely is removing Helen Keller from the curriculum

Here is the story, note that Hillary Clinton was removed as well and Billy Graham was added, at least on a preliminary vote.  Various historical figures were assessed for their relevance, and Helen Keller did not receive a high enough score.  Barbara Jordan, Sam Houston, Stephen F. Austin and Henry B. González — all figures from Texas history — made it through easily.  Dolores Huerta was added.

On Keller, here is some additional background:

In 1929 and again in 1938 she published books that both contained extended sections defending the Soviet Union—which she maintained was still a more or less democratic workers’ state—and praised the late Vladimir Lenin, whose great legacy rested on how he had helped to sow in Russia “the unshatterable seed of a new life for mankind.”

There is some chance the Texas decision will influence textbooks on a nationwide basis, because Texas is such a large market and publishers wish to market the same book nationally.

Keller should be kept because she is an impressive, focal, and easy to explain example of an individual who overcame disabilities and became prominent and influential.  At the margin, her radicalism is a reason to include her, not to exclude her.  Students should be encouraged to think of America as having had a diverse intellectual history, including radicalism.  That said, the same should hold for a variety of now-disgraced figures on the Right, provided of course that they have meritorious achievements worthy of note, and no this is not by definition impossible.

The first linked article claims that cutting Keller from the curriculum will save forty minutes.  Even if you don’t think Keller is worth exactly forty minutes, surely she is worth more than zero minutes, and besides the teacher simply can talk faster if need be (don’t most teachers talk too slowly?).

I don’t mind keeping the relatively obscure Texas figures in the social studies course of study.  If nothing else, it encourages young Texans to think of themselves as special and to resist assimilation into broader America, again to the benefit of diversity.

Addendum: Keller is a very good choice if you are playing Twenty Questions.  It is unlikely if someone will ask whether you are a famous person connected to the idea of disabilities.  And that reflects exactly why she should be kept in the curriculum.

Second addendum: Here are some other changes:

The board also voted to add back into the curriculum a reference to the “heroism” of the defenders of the Alamo, which had been recommended for elimination, as well as Moses’ influence on the writing of the founding documents, multiple references to “Judeo-Christian” values and a requirement that students explain how the “Arab rejection of the State of Israel has led to ongoing conflict” in the Middle East.

Barry Goldwater was removed as well, with Moses replacing Thomas Hobbes.  There will be a chance to overturn these decisions by a final vote in November.

Saturday assorted links

The seventeenth century was a special time in Britain

The apprentice dataset, which is richest and most reliable from 1580 to 1680, tells much the same story for the seventeenth century. As we expected, the underlying shares of apprentices’ parents in industry and services are higher than in the probate dataset, but the trends move in parallel. Agriculture declines consistently over this period. Industry and services both grow substantially, with services outstripping industry. Compared to the probate data, the share of the workforce in agriculture declines more quickly, while the rate of expansion in industry is somewhat slower in the first half of the seventeenth century, although it reaches a similar level by 1660–1679. The growth in services is similar to the probate dataset. This coherence between the results from two independent sources offers a first test of the validity of our findings.

That is from a newly published and important paper by Patrick Wallis, Justin Colson, and David Chilosi, “Structural Change and Economic Growth in the British Economy before the Industrial Revolution, 1500–1800.”

For the pointer I thank the excellent Kevin Lewis.