Has there been a free trade breakthrough?
Remember that old saying, something like “Things are never as bad, or as good, as they seem.” It applies to international trade as well.
Numerous reports suggest that the WTO has achieved a breakthrough. The core deal appears to suggest that many poor countries will lower their tariffs on manufactured goods and the rich countries will limit or eliminate export subsidies and protection for agriculture. But there is more here than meets the eye.
The first worry is an obvious one. There is no date given for the change in agricultural policies. Keep in mind that the rich countries are masters of obfuscation and delay on this issue, if not outright obstruction. Plus the rich countries can exempt “special” products, if they so choose.
Arvind Panagariya suggests that our concerns should run deeper:
Current production and export subsidies flood world markets with the subsidised products and drive their prices down. The removal of these measures will raise the prices of the products in question. This will benefit the exporters and hurt the importers of these products. Food products happen to be among the most heavily subsidised items and as many as 45 of the world’s least developed countries are net food importers, according to calculations by the economists Alberto Valdes and Alex McCalla. Even when we consider all agricultural products, 33 least developed countries are net importers.
A counter-argument may be that, once the subsidies are eliminated and world prices increase, the least developed countries will become net exporters of the products. But this is doubtful for two reasons: such a change can turn at most only a handful of these countries into net exporters and the switch from net importer to net exporter status by itself is not enough to bring an overall benefit. As food prices rise, so will losses on food imports. Only if a country becomes a sufficiently large exporter will it be able to offset these losses.
In other words, even if reform comes about, the main beneficiaries will be the taxpayers in the rich countries. Export subsidies benefit consumers abroad, even if they do not maximize aggregate value.
Nonetheless it is trickier than Panagariya indicates. Many agricultural interventions keep world prices up, not down, by preventing the reallocation of farming to its most productive geographic venues. Nonetheless it is not obvious that the very poor countries would be big winners in any competitive reshuffling of sectoral specializations. In fact we might expect technology to make agriculture increasingly high-tech. We are then back to the case where export subsidies hurt taxpayers in rich countries but help consumers in poor countries.
Also keep in mind that many poor countries already enjoy free bilateral access to EU markets for many agricultural commodities, with rice, sugar, and bananas being prominent exceptions. So if liberalization causes food prices in Europe to fall, agricultural exporters in the poor countries may again be worse off.
I am all for free trade, as loyal readers of MR will know. But it is a common myth to think that agricultural free trade will cause say, Africa, to blossom or achieve significantly greater gains from world markets. Even if African consumers end up paying lower prices for food, African producers will see very mixed results. And how effectively do we expect the damaged producers to be reallocated to other sectors? Africa as a whole could still benefit in the longer run, given the theory of comparative advantage, but this is hardly the scenario that everyone has in mind.
Addendum: Ben Muse offers an analysis and extensive links.
Dad is a stinker
Children rate their fathers as among their least popular playmates because they are too competitive, according to research among more than 1,000 youngsters.
They “played to win”, lacked imagination or were simply at a loss as to how to play games, said the Children’s Play Council, which commissioned the survey with the Children’s Society.
Children up to the age of 12 would rather play with their friends, their mother or their brothers and sisters.
Only one in 16 chose their fathers as their ideal companion. Dads were rated slightly above grandparents (one in 33) [so what’s wrong with them, TC asks?]. One in 50 children said they would rather play on their own.
Tim Gill, director of the Children’s Play Council, said: “Dads have difficulty not being too competitive. Several fathers said they found it hard to get down to their children’s level. And they don’t find it easy to let children win.
And what does the resident sociologist say?
Frank Furedi, professor of sociology at the University of Kent at Canterbury, said: “Fathers are living through their children much more which means they lose sight of the line that distinguishes adult from child.
“It’s also partly a power control issue. Fathers want to let their children know they are still ‘players’.”
Here is the full story.
Patents for everything
Or is that Markets in Everything?
Read this patent application for paying people to watch commercials:
Described are methods and apparatus for encouraging viewers to pay attention to television programs, commercials in particular, by offering viewers some incentive to watch. In one embodiment, viewers are notified that they can receive frequent-flier miles for answering one or more simple questions at the conclusion of the commercial. To verify that the viewer paid attention to the commercial, the answer to the question may be based on the content of the commercial. A sponsor might ask, for example, that the viewer identify the name of the sponsor or the color of an announcer’s shirt. A correct answer indicates that the viewer watched the commercial, and that the viewer is therefore entitled to some reward. For example, viewers who watch the commercial may be entered in a prize drawing, or may receive prize points, such as frequent-flier miles. In other embodiments, viewers may verify that they watched a given program by selecting an icon or pressing a button on a remote control.
That’s now owned by Microsoft, by the way, in case you are wondering why they are paying such a huge dividend. Here is the original link from TechDirt.
Literary role models for bloggers
All writers have their role models. To whom should bloggers look?
One obvious choice is Samuel Pepys, who kept regular diaries for about ten years. But Adam Sisman’s excellent book, written before the advent of blogging, nonetheless directs our attention to the Scot James Boswell:
Boswell’s plain, direct prose was easy to read, and appealed to twentieth-century readers as [Samuel] Johnson’s mannered, classical style never could. Moreover, Boswell’s interest in himself, which seemed so peculiar to his contemporaries, was very much more acceptable two centuries later. Indeed, Boswell seemed to offer a unique combination: a writer who poured the contents of his mind freely into his journal, without either embarrassment or knowingness…Here was a miracle: a pre-Freudian autobiographer who revealed everything in his mind, without restraint, concealment, or distortion. Or so it seemed.
Boswell [borrowed] techniques from the novel, the theatre, and the confessional memoir. With meticulous care, with long-practised skill, and with a generous imagination, he crafted a character who lived and breathed [TC: I have long felt that Boswell, not Samuel Johnson, is the real biographical subject of Boswell’s Life of Johnson]. He also set new scholarly standards; his verification of every possible detail, which seemed so eccentric to his contemporaries, would become the norm. In doing what he did, he relied mainly on instinct, his sense of what would serve his purpose best.
Hmm…and like many bloggers, Boswell often got in trouble for writing up his private conversations with others.
Safe sex, sells saris
The Indian city of Varanasi is getting through around 600,000 condoms a day, but this is no population control exercise. The weavers of the holy city, home to the world-famous Banarasi saris, have made the contraceptives a vital part of garment production.
The weaver rubs the condom on the loom’s shuttle, which is softened by the lubricant thus making the process of weaving faster.
The lubricant does not leave any stain on the silk thread which might soil the valuable saris.
There are around 150,000 to 200,000 hand and power looms in Varanasi alone and almost all are using the technique.
And every loom has a daily consumption of three or four condoms.
At first, weavers stocked up on condoms from the family planning department under a government scheme to provide them free of cost.
Some weavers even registered with fake identities to get their hands on the precious prophylactics.
Here is the full story. Thanks to Paul N for the pointer.
Facts about Orkney
Sorry, no links in this post, but I am sticking to the local sources that sound credible:
1. The richest man in Orkney is (was?) a fisherman. His large net turned out to violate EU regulations, so he received $20 million from the British government to stop fishing. He is now building a house that overlooks the entire town of Stromness from above. The townspeople are not happy.
2. One-third of the employment in Orkney stems from an NHS hospital on the main island. Waiting times are significantly lower here than elsewhere in Britain and the service is correspondingly better.
3. Much of the labor force switches jobs over the course of the year. They serve tourists for three months in the summer, and pick up odd jobs the rest of the year. Work is easy to come by, careers are almost impossible to develop.
4. There have been only two murders in Orkney in the last two hundred years. One happened about two hundred years ago. The other is about ten years old; a waiter was shot and killed in Kirkwall’s Indian restaurant. Neither crime has been solved yet.
5. Orcadians eat pickled herring in oatmeal, smoked fish with scrambled eggs, and fried haddock with chips. For dessert they have Orkney fudge or Orkney ice cream. Haggis is nowhere to be found.
Here is a a tourist introduction to Orkney. Here is historical information. The islands are among the most beautiful spots in Europe and remain largely unspoilt, go if you can.
Has urban architecture declined?
Strolling the streets of Edinburgh, it is hard not to be struck by the beauty and general consistency of the older buildings. It is hard to find post World War II examples where a wealthy Western region has done something comparable. Suburbs have sprung up around the United States, but few of them have architecturally notable exteriors on a consistent basis. There are so many new suburban developments, cannot just one of them be lovely and aesthetically challenging?
What might have gone wrong? I can think of a few possible explanations:
1. Architecture has suffered from the “cost disease.” In this context, a rising general level of wages makes quality handwork more expensive in relative terms. In other words, they don’t handweave many carpets in Silicon Valley. There may be something here, but then why don’t the poorer countries of the world become architectural leaders? And I see home interiors as improving significantly over time.
2. In older times governments at various levels were less democratic. Competition for status within an oligarchy may have upped the incentive to produce beautiful exteriors. This mechanism clearly operated in Renaissance Florence.
3. Perhaps consumers and lenders were less well informed in times past. A nice exterior was a good way to signal the quality and long-term commitment of a business enterprise. Just look what happened to the quality of bank architecture in this country once the FDIC was instituted.
4. Perhaps we idealize times past. The so-called “Royal Mile” is today a leading tourist sight in Edinburgh. In the eighteenth century it was considered “a dark, narrow canyon or rickety buildings, some stacked ten or even twelve stories high, thronging with people, vehicles, animals, and refuse…Sanitation was nonexistent.” (That is from Arthur Herman’s notable book on Scotland.) We may be co-authors in the beauty of the past more than most people realize.
5. Perhaps contemporary suburban developments will be seen as beautiful by future generations. I’ll bet against this one, but we will see.
I am hardly suggesting that architecture is declining in every regard. I love the lights of the Ginza district in Tokyo. And our best stand-alone buildings are no less wonderful than those from times past. But I still wonder why urban architecture no longer yields consistently beautiful urban regions. Anyone who has walked around the major European cities, or even glanced at the Chrysler building, surely has asked the same question. Why is the quality of exteriors declining relative to interiors? Given that nice exteriors are a public good, why were they ever so nice in the first place?
Monster waves are real
Just ask Randall Parker.
How did Scotland grow so quickly?
Scotland had been an economic backwater at the time of the 1707 union with England. By 1770 at least the Scottish cities were among the most developed and intellectually advanced parts of Europe. How could this happen?
Arthur Herman supplies at least one piece of the puzzle:
…the fact that Scotland was very much the junior partner in this union also turned out to be an advantage. The new Parliament largely ignored Scotland; outbursts such as the malt riots and the threat of Jacobitism apart, the government in London paid little attention to what was happening north of the border. Scots ended up with the best of both worlds: peace and order from a strong administrative state, but freedom to develop and innovate without undue interference from those who controlled it. Over the next century, Scots would learn to rely on their own resources and ingenuity far more than their southern neighbors would…
A strong government that leaves well enough alone: this was the dual, seemingly contradictory, nature of the British state as it became part of life in post-union Scotland. Scots became used to these dualities, and learned to accept them as basic reality, just as the Union itself involved a fundamental duality: “a ship of state with a double-bottomed hull,” as Jonathan Swift put it. They also learned to think in a new way as a result of the Union: in terms of the long term.
Many economic development problems today stem from a similar conundrum. Ideally we would like a state that is both strong and not too large. Most parts of the world are unable to institute this duality; of course Hong Kong was a notable exception. I am not in general an imperialist, but the most successful instances of imperialism are likely to be highly successful indeed.
Monkey see, monkey do
Chimpanzees yawn in response to seeing other chimps yawn, reveals a new study. The discovery bolsters the idea that chimps are able to understand their own and others’ state of mind.
There is more:
In research on people, those subjects that perform contagious yawning also recognise images of their own faces and are better at inferring what other people are thinking from their faces. What is more, brain imaging studies have shown that people watching others yawning have more activity in parts of the brain associated with self-information processing.
“Our data suggest that contagious yawning is a by-product of the ability to conceive of yourself and to use your experience to make inferences about comparable experiences and mental states in others,” Gallup told New Scientist.
Here is the full story. And did you know that some monkeys (and some people) yawn to show annoyance?
Addendum: Read Clay Shirky on the same evidence. Note that monkeys also can recognize unfairness.
Universal domain in Scotland
TC to Glasgow cabbie: “What kinds of food do they eat up in the Northern Highlands?”
Cabbie: “Fish n’ chips, haggis, burgers…they’ve got everything.”
The scenery, of course, is lovely up here. The Orkney islands, my current location, have a distinctive feel, in some ways more akin to Norway than to Scotland.
The biggest surprise? So far we have experienced no more than fifteen minutes of rain.
Is more Congressional oversight good?
The bipartisan committee on terrorism has argued that Congress did not exercise sufficient oversight of the CIA and other intelligence agencies. For a pithy analysis read Daniel Drezner here and here.
More oversight will make the intelligence agencies, however they are structured, more risk-averse. The President or Congress will peep in every now and then, and the agencies will scurry to respond to the emergency of the day. They will work harder not to look bad. This is hardly the best way to encourage imaginative, long-run thinking in defense of our nation.
Excess risk-aversion already happened with Iraqi WMD. One CIA analyst noted: You have to understand,” he said. “We missed the Indian and Pakistani nuclear tests last spring. We’re under a lot of pressure not to miss anything else.”
Now you might think that risk-aversion in intelligence is a good thing. Should we not take all possible care to protect America against foreign threats? But bureaucratic risk-aversion is not the same as a secure national defense. It brings groupthink, excess formalism, protecting against yesterday’s threat, and an unwillingness to take responsibility for mistakes. Furthermore it can make effective pre-emption virtually impossible; decisionmakers and their allies will no longer trust their intelligence communities.
Rather than making intelligence agencies more accountable, how about making them more independent? Create some small, elite groups and staff them with the best people we can find. Pay them well. Give them arsm-length protection from political pressures. Treat them like the Federal Reserve, an independent agency renowned for the quality of its staff. Give them a culture of internal pride. Richard Clarke reminds us that: “It is no accident that the only intelligence agency that got it right on Iraqi weapons of mass destruction was the Bureau of Intelligence and Research at the State Department – a small, elite group of analysts encouraged to be independent thinkers rather than spies or policy makers.”
Sometimes the way to get what you want involves less control, not more control.
Should we ban the peanut?
I have to point out that many common foods — the peanut is a good example — couldn’t pass the screening of GMOs [genetically modified organisms] in the United States.
That is from James Trefil’s illuminating generalist tract Human Nature: A Blueprint for Managing the Earth — By People, For People. Trefil argues that better science will prove the most effective way to save our planet from environmental disaster. He is an unabashed fan of ecological management and is skeptical about the idea of pristine wilderness. How about this?:
The real advance in genetic modification…[will come] from a second wave of plants already being developed. One example of this new wave is what are called neutraceuticals [nutraceuticals]. These are food plans that have been engineered to produce molecules that are specifically beneficial to humans. You can imagine, for example, a banana whose DNA has been modified so that it produces the recommended daily allowance of vitamins. Once such trees are planted, they would continue to produce the vitamins without any further intervention…
We can even imagine a banana that would provide protection from cholera or other diseases. Golden Rice already has the potential to alleviate vitamin A deficiencies; read an update here.
Daniel Drezner and Jean Buridan
Daniel Drezner remains on the fence, concerning the next Presidential election.
He writes about supporting Bush, Kerry, or perhaps a third party candidate (unlikely). But why should he restrict himself to “pure strategies”? Why can’t he support some candidate with some positive probability? How about, for instance, “I support Bush with p = 0.63.” Or “I support Kerry with p = 0.57”, and so on. That way we would know how strong (or weak) his current view is.
We could interpret those p’s in several ways. First, it could be Dan’s current estimate of where his final support will end up. Second, it could be a general measure of expected relative enthusiasm for the candidates.
It is not enough to make up your mind, you should also give the world some sense of your confidence in such judgments. And “Bush with p = .50000001” is a very different story than “Bush with p = .997”. (As an aside, note a potential paradox of voting. How many meta-rational voters, aware of their own fallibility, can justifiably believe that their error-prone participation will improve the final outcome?)
Then a question arises. Once you are playing around with these p’s, you don’t need to have a final point of view at hand. You will have some “p” right now.
Dan writes: “This year I can’t muster even the tiniest amount of enthusiasm for any candidate.” Fair enough, but why not give us a number?
What about me?
Alex is precluded by the Constitution, so can I go with “Dan with p = 0.73”? He is photogenic, and could handle both economics and foreign policy.
Addendum: I enjoy asking people the mischievous question “with what probability do you believe in God?” It is amazing on one hand what strong opinions people have on religion, and on the other hand how ill-prepared they are to come up with an actual number.
Markets in everything
Price a Chilean cemetary charges for an alarm built into coffins to ensure against mistaken live burial: $462
That is from Harper’s Index, in the latest issue of Harper’s. Here is a related link.
Here is some evidence on the likelihood of being buried alive.
The Italians take things further, albeit at a higher price:
In 1995 a $5,000 Italian casket equipped with call-for-help ability and survival kit went on sale. Akin to bleeping devices which alert relatives to an elderly family member’s being in trouble, this casket is equipped with a beeper which will sound a similar emergency signal. The coffins are also fitted with a two-way microphone/speaker to enable communication between the occupant and someone outside, and a kit which includes a torch, a small oxygen tank, a sensor to detect a person’s heartbeat, and even a heart stimulator.
What I would want: Satellite radio, Spenser’s The Faerie Queene, and a cell phone with a good battery.