What do public choice economists believe?
Two researchers took a poll of public choice economists, defined as those who belong to the Public Choice Society, this includes 201 economists and 125 political scientists. The response rate was 29.6 percent, and here are some of the results:
1. Voters vote out of a sense of civic duty – 80 percent said yes. 54.5 percent said voting is rational.
2. Political rights and civil liberties promote economic growth – 79.8 percent said yes.
3. The size of government has grown due to the proliferation of special-interest groups – 67.8 percent said yes. When asked whether voters are the cause — my view — 53.8 percent said yes.
4. Bureaucrats are budget-maximizers – 65.9 percent said yes.
5. Government does more to protect and create monopoly power than it does to prevent it – 63.7 percent said yes.
6. Most politicians are solely office-seeking vote maximizers – 51.1 percent said yes.
7. Most government programs are driven by rent-seeking – 50.6 said yes.
Here is the source paper, by Jac Heckelman and Robert Whaples of Wake Forest.
The biggest mistake listed is #4, the view that bureaucrats budget maximize. Here is one survey of various critiques. Most generally, Congress and the President monitor the bureaucracy, which as a result pursues complex incentives, and responds to both carrots and sticks. Budget maximization is unlikely to result as a dominant motive. As I understand a talk I once had with Bill Niskanen, founder of the budget maximization hypothesis, even he has moved away from this theory.
And how is this for a striking comparison?
When you ask (a broader group of) economists whether markets, in the absence of transactions costs, achieve efficient outcomes, 57.1 percent say yes. This is itself odd, since I would interpret the proposition as a tautology, but it appears some people simply can’t bring themselves to praise the market. 70.3 percent of the public choice economists say yes, showing that this group has a stronger belief in markets. 22 percent of the surveyed political scientists say yes, showing a far greater skepticism about the market economy from those quarters.
Why do women read more fiction?
Yesterday I asked why women buy and read more fiction than do men, and whether there might be an evolutionary explanation for this phenomenon. In response, Fabio Rojas writes:
(a) It’s sometimes thought that dreaming, play and story telling are opportunities for people for practice their emotional/interpersonal skill without danger. They’re all about fictional social worlds that you can explore and relate to without endangering real world relationships.
(b) Women seem to specialize in cooperative, social interactions. I’m sure there’s an Evolutionary explanation for this.
(c) As specialists in social interactions, women would be more likely to refine and practice that skill, through engagement with literature/story telling.
John Paschetto notes:
…when I used to commute by train to Philadelphia, almost all the men read newspapers, and almost all the women read paperbacks.
My student Erte suggests that men have a greater evolutionary need to be physically stronger, which induces them to read less and be more active, perhaps they play more sports instead.
My take: All of these are noteworthy ideas. I might add that when men do buy books, they often prefer stories of adventure, such as Tom Clancy novels. Furthermore men may invest more effort in potentially high status activities, which presumably does not include reading novels. It remains a puzzle, however, why women start reading more toward the latter part of their childbearing years. True, they are busier when they have young children, but if we are going to use an evolutionary explanation, it would be nice to explain the timing as well. Do older women have some special interest in understanding social networks?
2, raised to the 20,996,011, minus 1.
That number is unlikely to ring a bell:
A 26-year-old graduate student in the US has made mathematical history by discovering the largest known prime number.
The new number is 6,320,430 digits long. It took just over two years to find using a distributed network of more than 200,000 computers.
Prime numbers are positive integers that can only be divided by themselves and one. Mersenne primes are an especially rare type of prime that take the form 2 p-1, where p is also a prime number. The new number can be represented as 2 raised to the 20,996,011, minus 1 [I have changed the presentation here, in lieu of upper case power notation]. It is only the 40th Mersenne prime to have ever been found.
Here is the full story, from NewScientist.com. George Woltman adds: “There are more primes out there.”
The saga is also an account of the voluntary private production of public goods, given the large number of computers whose “spare processing power” was donated toward this end. If you want to contribute toward this sort of endeavor, sign up here.
Which economists is Howard Dean listening to?
Joseph Stiglitz, Alan Blinder, and Jeffrey Sachs, in short, here is the brief story. Sachs is more market-oriented than the first two names, so this makes for a slightly odd pairing. It is hard to imagine him advising Dean to “re-regulate” the economy, as the candidate has called for. Stiglitz and Blinder are not the two names I would have chosen myself, but at least he is opting for smart economists. By the way, Dean’s primary advisors on domestic policy are Harvard law professor Christopher Edley, a well-known proponent of affirmative action, and Maria Echeveste, deputy chief of staff from the Clinton administration.
Addendum: The first link is now corrected. And here is another article on Dean’s inner circle.
Credit cards under your skin
Read Randall Parker on this new innovation:
Advanced Digital Solutions has announced their Veripay embedded radio frequency ID (RFID) cash and credit card technology.
Some day we may be able to walk into a store and be completely alone and not have to see a living person in sight, imagine walking out holding the items you want and being billed instantly just as you leave the store. No confrontations, no customer service, no cute check-out girl, isn’t our future grand…The chip is embedded in the arm.
Parker also quotes this more formal descrption of the technology:
VeriChip is a subdermal, radio frequency identification (RFID) device that can be used in a variety of security, financial, emergency identification and other applications. About the size of a grain of rice, each VeriChip product contains a unique verification number that is captured by briefly passing a proprietary scanner over the VeriChip. The standard location of the microchip is in the triceps area between the elbow and the shoulder of the right arm. The brief outpatient “chipping” procedure lasts just a few minutes and involves only local anesthetic followed by quick, painless insertion of the VeriChip. Once inserted just under the skin, the VeriChip is inconspicuous to the naked eye. A small amount of radio frequency energy passes from the scanner energizing the dormant VeriChip, which then emits a radio frequency signal transmitting the verification number. In October 2002, the US Food and Drug Administration (FDA) ruled that VeriChip is not a regulated device with regard to its security, financial, personal identification/safety applications but that VeriChip’s healthcare information applications are regulated by the FDA. VeriChip Corporation is a wholly owned subsidiary of Applied Digital Solutions.
By the way, the first 100,000 registrants to be “chipped” get $50 off.
My take: I don’t see this product taking off as a useful means of buying things, though of course it would no longer be a problem if you forgot your wallet at home. Too much talk about “mark of the beast” and all that, plus the general creepiness of the idea. As Parker suggests, more likely applications are for people at risk of having heart attacks (the device could send a signal, much like a cell phone call), diabetics, epileptics, Alzheimer’s patients, and children at risk of kidnap or running away from home.
Who buys fiction?
“More than 60 percent of fiction is bought by women and most of that by women aged between 35 and 55”, according to John Baker of Publishers Weekly, here is the link. Men don’t read fiction that much. Please write me if you have a good explanation for this fact in terms of evolutionary biology.
If you are curious, here are bestseller lists for the century, here is a New York Times bestseller list for right now, The Da Vinci Code remains number one, number five is Shepherds Abiding, described by Amazon in the following manner:
Karon [the author] works more homespun magic with this latest uplifting story set in sleepy Mitford, N.C. Father Timothy Kavanagh, stalwart of the Mitford series, is approaching 70 when he comes across pieces of an old English nativity scene at his friend Andrew Gregory’s antique shop. The set has definitely seen better days, and Andrew is hoping that someone will volunteer to restore it. Who better than Father Tim, who seems to have reached a turning point in his life and needs a project to distract him? Inspired by memories of a manger from his childhood that was destroyed in a rainstorm, Father Tim, after much deliberation, takes up the cause, planning to surprise his artist wife, Cynthia…The author’s warm spirituality and vibrant holiday spirit make this heartwarming eighth series entry a welcome one.
No, men are not buying this book in large numbers.
I am always amazed how strongly demographics predict our patterns of cultural consumption. People typically think that their cultural choices reflect their free will and their determination to construct their own identity. But when push comes to shove, it is young people who buy (or download) most of the music, see most of the movies, and middle-aged women who read most of the fiction. If you have a smart 19-year-old girl, who goes to Brown, I bet she doesn’t like heavy metal, but will have sympathies for Tori Amos and REM. And education and “social class” predict cultural taste better than does income.
The first linked piece also details just how hard it is to make a living writing fiction. You can have a few hit books, with reasonably large advances, but unless they are huge you might net no more than $20,000 a year. Yet overall incomes are rising. I predict that having an upper-middle class spouse, or richer, will prove the key to making it as a writer in the future.
Thanks to the ever-excellent www.2blowhards.com for the pointer to the first link.
Government regulation, again
A bit of madness in California…which reports that “under an animal-protection law signed by former governor Gray Davis, it is now technically illegal to set mousetraps in California without a trapping license, ‘available only by paying a fee ($78.50) and passing a fairly complex test.'”
From Cronaca.com, here is the the original link, channeled through Best of the Web.
Bush to drop most steel tariffs
Bush decided in March 2002 to impose tariffs of 8 to 30 percent on most steel imports from Europe, Asia and South America for three years. Officials acknowledged at the time that the decision was heavily influenced by the desire to help the Rust Belt states, but the departure from Bush’s free-trade principles drew fierce criticism from his conservative supporters. After a blast of international opposition, the administration began approving exemptions.
The WTO’s ruling against the tariffs was finalized three weeks ago, clearing the way for the retaliatory levies, and Bush’s economic team concluded unanimously that the tariffs should be scrapped. The source involved in the negotiations said the consensus in the White House was that “keeping the tariffs in place would cause more economic disruption and pain for the broader economy than repealing them would for the steel industry.”
Here is the full story. The formal decision is expected to be announced later this week. This is the first piece of economic policy good news in some time, but it is sad that it required a WTO ruling and threats of European retaliation to come about.
Will the FCC regulate Internet phone calls?
Hearings start today, here is the full story. A month ago a Federal court ruled that state governments may not regulate such calls. And the FCC traditionally has left the Internet alone. Nonetheless long-distance service over the Internet costs only a fraction of most calling plans, which threatens both telecommunications companies and government revenues from long-distance calls.
The problem has arisen, in part, because of previous regulatory decisions, most specifically access fees:
Long-distance companies now pay local companies $25 billion a year in “access charges.” The fees cover the cost of connecting long-distance customers to the local network. The long-distance companies argue they should not have to pay access charges for calls that travel over the Internet.
In other words, Internet calling is cheaper in part because the calling services do not have to pay access fees to the long distance network. Over time we can expect such accees fees to fall apart, they will prove to be neither a political nor an economic equilibrium. Here is what one industry spokesman predicts:
Nortel Networks, the Canadian telecommunications equipment maker, estimates that local telephone companies could cut their costs of running a network by 30 percent by shifting to a Internet-based network. Nortel also contends that carriers can cut their capital investment costs by 50 percent. “The market is absolutely moving in the direction of the convergence of these networks,” said Martha Bejar, president of carrier solutions at Nortel.
The bottom line: Competition will become more intense, calling will continue to become cheaper, but the long-run problem of paying for the telecommunications network will become more severe.
Our growing mobility
How much territory do you move through on a typical day? Jesse Ausubel writes:
US per capita mobility has increased 2.7% per year, with walking included. Excluding walking, Americans have increased their mobility 4.6% each year since 1880. The French have increased their mobility about 4% per year since 1800.
Most of all, driving has been replacing movement on foot. Follow this link and scroll down for the illustrative graph and the exact figures. Ausubel believes that in the future people will cover hundreds of kilometers every day, on average, you can think of him as the Julian Simon on transportation economics. In his view people are often willing to travel up to 60 or 70 minutes per day, but they don’t like to go beyond this figure. Yet transportation becomes ever easier and more rapid. He is bullish on magnetic levitation trains, and much of the future improvement may come from airplanes:
During the past 50 years passenger kilometers for planes have increased by a factor of 50. Air has increased total mobility per capita 10% in Europe and 30% in the United States since 1950. A growth of 2.7% per year in passenger km and of the air share of the travel market in accord with the logistic substitution model brings roughly a 20-fold increase for planes (or their equivalents) in the next 50 years for the United States and even steeper elsewhere.
And how is this for optimism?
By the year 2100, per capita incomes in the developed countries could be very high. A 2% growth rate, certainly much less than governments, central banks, industries, and laborers aspire to achieve, would bring an average American’s annual income to $200,000.
And this?
Staying within present laws, a 2.7% per year growth means doubling of mobility in 25 years and 16 times in a century.
This is almost enough to make you forget about the irresponsible fiscal policy of the Bush Administration.
Thanks for Gregg Easterbrook’s The Progress Paradox for the pointer to Ausubel’s work.
Oddly we travel as much as we do, in part, because we love home so much. Did you know that sixty percent of all European flights involve a return flight on the same day? We can go far, but the pull of home is indeed strong.
Most of these are neither funny nor clever
There is, believe it or not, a web site with economics pick-up lines.
Two of them, however, I find somewhat clever, emphasis on somewhat:
I love you, ceteris paribus.
And:
You are unique…well, at least locally.
Click on the link to get the real groaners.
Graduate study in economics
Do you know someone pondering graduate study in economics? This is the most useful and comprehensive information site I know, click here. It includes information on major programs, advice to applicants, what textbooks are used, how programs are ranked, and much more.
France and Germany break the rules
The EU fiscal rules, that is. Each country using the euro is supposed to maintain a budget deficit of less than three percent of gdp. Earlier this week France and Germany announced that they had no real intention of meeting the target, here is the full story. What are the implications of this?
1. The euro hit an all-time high against the dollar, clearly the markets were not rattled and largely expected this outcome or some version thereof.
2. Many of the smaller countries in the EU are upset, most of all Netherlands, Austria, Finland and Spain, all of which went through painful fiscal restructuring themselves. It appears there are two sets of EU rules, one for France and Germany, one for everyone else.
3. France in essence has given up on its dream to provide significant leadership for the other EU countries, and can no longer expect to lead by example. Otherwise France and Germany will suffer no real penalties from this.
4. France and Germany have shown that they simply will not make significant spending cuts, no matter what.
5. France and Germany were right not to raise taxes to meet the targets.
6. The three percent rule is effectively dead. The rule was a bad idea in the first place. Rules based on strict targets, with trigger penalties kicking in at a predetermined level, are likely to fail in democracies (remember the Gramm-Rudman Act, first it was to control deficits, then spending, ha-ha?). The boundary lines are arbitrary, and if they start to matter the penalties are seen as arbitrary and unfair by voters. So no penalty is accepted and then the targets fall apart.
7. The old written rule mandating three percent will not be revised. The new system in practice will likely take the form of loose ranges, with penalties of moral suasion applied by other EU members.
8. The real question is what will happen when one of the smaller nations thumbs its nose at France and Germany someday, over some EU agreement, and then claims exemption from the relevant penalties. Until then, stay tuned…
Dreaming of a White Christmas?
It is less likely than ever in many parts of the country, read here for some exact figures, based on data since 1948. Here is the geographic distribution of the changes, snow is less likely in the east but more likely in some mountain states:
The decrease in the number of snow days has been especially pronounced east of the Mississippi River, where 117 of 125 stations reported an average of five fewer days with snowfall.
“Five fewer days of snowfall over a 30-day period may not seem all that significant until you consider that, in many regions, snow days occur relatively infrequently,” Kaiser said.
One region that is more wintry between the holidays, however, extends from the Central Rocky Mountain states (Utah, Colorado and Wyoming) eastward into the Central Plains (mainly Nebraska), where the number of days with snow has increased significantly.
“The area across the Central Rockies and Central Plains is the one part of the country that is bucking the trend, with a few stations in Utah and Colorado seeing nearly 10 more days with snowfall,” Kaiser said.
The researchers caution against thinking that this is a tale of global warming, one way or the other.
Progress against AIDS?
Haiti is renowned for its weak or non-existent institutions. Therefore it is both surprising and heartening to see the country making some progress against AIDS. In fact some of Haiti’s problems are being turned to its advantage, namely its large number of underemployed laborers, who are now being used to carry retrovirals to the desperately poor:
No program to treat people in the poorest countries has more intrigued experts than the one started in Haiti by Partners in Health – which has succeeded by enlisting help from hundreds among Haiti’s vast pool of unemployed and underemployed workers.
It is the rainy season now. So each morning and evening, 700 villagers strike out across dirt roads turned into a morass of mud and dung to deliver medicines to people with AIDS and tuberculosis. They tramp through muck and wade through streams on foot; a lucky few sit atop mules or donkeys.
Here is the full story. One leading participant noted:
“We didn’t do it to be a model program,” said Dr. Farmer, 44, a Harvard medical professor and anthropologist, who is also the subject of a recent book, “Mountains Beyond Mountains,” by Tracy Kidder. “We did it because people were croaking.”
Good news from Haiti is hard to come by, but here is another bit: Haitian artisans will have greater access to the web to sell their wares, visit this site, in addition to the brokers who sell through ebay. Haitian artisans, craftspersons, and artists are remarkably talented and hardworking, this is one of the few areas where Haitians can compete in world markets, this link shows one of my favorite Haitian voodoo flags, click on the hearts to see the larger image.