Category: Current Affairs

Wow

Robert Day has just pledged $200 million to support economics and public policy at Claremont-McKenna College.

Addendum: The L.A. Times reports:

However, the gift has triggered debate on the 50-acre campus in
Claremont. Some professors, while recognizing the generosity, said they
worried that the money could tilt the college too much toward economics
and financial studies. A letter to Gann, drafted by literature
department chairman Robert Faggen and signed by other literature
professors, said they are concerned that the gift will "distort the
college into a single focus trade school."

Wunderkind Ben Casnocha will be offering further reports.

Why are there strikes?

The UAW at General Motors has gone on strike.  But why are there strikes at all?  John Kennan wrote (full text gated here):

There is no commonly accepted economic theory of strikes.
The main obstacle is that if one has a theory which predicts when a
strike will occur and what the outcome will be, the parties can agree
to this outcome in advance, and so avoid the costs of a strike..strikes are apparently not Pareto optimal, since a strike means that the pie
shrinks as the employer and the workers argue over how it should be
divided.  If the parties are rational, it is difficult to see why they
would fail to negotiate a Pareto optimal outcome.

Hicks suggested two possible explanations for strikes:
either the union is trying to maintain a "reputation for toughness", or
there is private information on at least one side of the bargaining
table…

The NYT claims that the union had to "draw a line in the sand."  More generally, David Card wonders whether striking workers are forcing employers to reveal how profitable they are.  The firm, if indeed it is profitable, will come back with a higher wage offer, but only if it’s hand is forced.  Otherwise the union does not know how much surplus can be grabbed because the firm will not have to reveal it.  Or can workers, using institutions and morale, somehow precommit to a resistance curve?  Such a precommitment is optimal ex ante (it reaps a greater share of the surplus by conferring a bargaining advantage) but not always best ex post because gains from trade can break down.  That is my guess in this case.

Perhaps Dave Ribar has the wisest comment:

The only "good" news (if you can call it that) is that GM’s
manufacturing workforce has shrunk so much that many fewer workers are
involved than in the earlier UAW strikes.

About 73,000 workers have gone on strike.  Here is the decline of General Motors.

What is going on with the UC Regents?!!!!

First this:

In a showdown over academic freedom, a prominent
legal scholar said Wednesday that the University of California,
Irvine’s chancellor had succumbed to conservative political pressure
in rescinding his contract to head the university’s new law school, a
charge the chancellor vehemently denied.

Erwin Chemerinsky, a well-known liberal expert on constitutional
law, said he had signed a contract Sept. 4, only to be told Tuesday by
Chancellor Michael V. Drake that he was voiding their deal because
Chemerinsky was too liberal and the university had underestimated
"conservatives out to get me."

Now this:

After a group of UC Davis women faculty began circulating a petition,
UC regents rescinded an invitation to Larry Summers, the controversial
former president of Harvard University, to speak at a board dinner
Wednesday night in Sacramento.

Both of these decisions are shameful.

Hobbies in everything

Is this a Mengerian spontaneous order story, or not?:

Kisa, 28, a student and translator in Toronto, decided to create her
own language, something simple that would help clarify her thinking. 
She called it Toki Pona — "good language" — and gave it just 120
words.

"Ale li pona," she told herself. "Everything will be OK."

Kisa eventually sorted through her thoughts and, to her great surprise,
her little language took off, with more than 100 speakers today,
singing Toki Pona songs, writing Toki Pona poems and chatting with Toki
Pona words.

It’s all part of a weirdly Babel-esque boom of new languages.  Once the
private arena of J.R.R. Tolkien, Esperanto speakers and grunting
Klingon fanatics, invented languages have flourished on the Internet
and begun creeping into the public domain.

The website Langmaker.com lists more than 1,000 language inventors and 1,902 made-up languages, from `Ayvárith to Zyem.

The language inventors have, of course, created a word to describe what they do — "conlang," short for constructed languages.

Here is the full story.  Here is a word list for Toki Pona.  Here are general resources.  The language has only a few dozen proverbs but one of them is nasin mami li ike, or "capitalism is negative."  There are by far more words about sex than anything else ("Kisa created Toki Pona as an exercise in minimalism, looking for the core vocabulary that is necessary to communicate"), and here is how the countries have been renamed.

Sadly: "Some want to express complicated thoughts in Toki Pona, running counter to its design."

Social cooperation

People from northern New Jersey are brought up believing this sort of thing happens frequently:

LOGAN, W.Va., Sept. 11 – A 20-year-old woman was held captive for more
than a week in a mobile home, where she was raped, stabbed and tortured
by at least a half-dozen people, the police said…

[There are further truly gruesome details, which I will spare you, but see the link if you must]

Six people, including a mother and her son and a mother and her daughter, have been charged in the case.

The bottom line?

The Brewster family and their trailer has a history of violent crime, the police said.

Kenya fact of the day

The two women carried on about liquidity and profit margins, and recalled with pride attending the first shareholder meeting of KenGen this year, an event so huge that it had to be held in the city’s largest soccer stadium. About 200,000 people from all corners of the country came like so many newly minted executives.

"I felt so good," Kariuki recalled. "It was just normal, common people. People dressed well. What impressed me was the number of old women — they were coming in their traditional clothes. They were telling me, ‘Yes, we bought!’ "

Here is the full story.  I am not in any particular sense bearish about Kenya’s future, relative to its starting point.  And I am pleased to see that the country is growing so rapidly.  But I do believe the time has come to sell, or if you can (ha!), sell short.

The Revolution is Four Years Old!

Marginal Revolution is four years old today (at 3:07 pm EST precisely)!  It all began with The Lunar Men and since then we posted something new every day for four years.  In total we have had over 6000 posts, about 4.4 posts on average per day and we are closing in on 10 million visits.  If you were to print all of MR for the last four years it would take well over thirty two thousand pages.  I’d like to tell you how many pages exactly but Word can’t count beyond 32,768.

You, our readers, have made Marginal Revolution one of the most widely read blogs in the world. 
Thanks!  We would like to know you better.  So in the comments please feel free to say happy birthday especially if you are a long time reader who has never commented before.  How long have you been reading MR?  What’s your favorite post?   Do you live in some exotic locale?  Viva la revolution!