In New York it costs billions of dollar per mile to build new subways, a price far higher than anywhere else in the world. That’s one reason why Elon Musk’s The Boring Company has been anything but. Even if hyperloop technology doesn’t pan out, Musk’s goal of reducing tunneling costs by a factor of ten is laudable. The Boring Company purchased a tunnel boring machine in April of 2017 and incredibly has already completed a two-mile test-tunnel underneath Hawthorne, LA! Awesome, right? Well, some people just can’t be happy.
“[I]nvaders are coming from underground” proclaims Alana Semuels in a big story in The Atlantic. The title and splash page indicate the theme:
The billionaire is drilling for futuristic transit under Los Angeles. He didn’t have to ask the neighbors first.
Billionaires are undermining your home. And democracy! Grab your pitchforks! Yet dig a little deeper underneath the lurid headline and the actual complaints are–dare I say it–boring.
I talked to a dozen people who live along the tunnel’s route, and most said they hadn’t witnessed any extra noise or traffic. But none had been informed ahead of time that a private company would be digging a tunnel beneath the street.
But what about all the displaced people?
As the tunnel neared completion, disruptions to the community increased. The company bought another building, this one on the corner of 120th Street and Prairie Avenue, for $2 million, according to public records, to allow for the extraction of tunneling equipment. Adrian Vega had run a cabinet business in that building for 18 years. When his landlord sold the building, the Boring Company came in and offered Vega’s company, Los Vegas Kitchen Cabinets and Doors, extra cash to get out in three months. Vega took the money, and asked for even more time from the Boring Company, which he was granted. But he couldn’t find another space; since moving in August, his business has been closed and his customers don’t know that he’s moved, he told me.
…Shunyaa Turner lives in a small house on 119th Place with his wife and two kids. He said that in the past year, they’ve had to battle more pests, such as raccoons, mice, skunks, and opossums, which they’ve never seen before. He isn’t sure if this is related to the digging; the Hawthorne airport has also been doing more construction as it gets busier, so the animals could have fled from there. He and his wife said they’ve also noticed more cracks in their impeccably maintained walkway.
…The initial document also claimed that the test tunnel would not involve digging under private property, but that, too, has changed—though the company has now bought all the private property it is tunneling underneath. The company has also closed a lane of Jack Northrop Avenue, a street on the other side of SpaceX headquarters
In the author’s own words:
Meanwhile, in Hawthorne, the company that promised its transit test projects would be completely unnoticeable by the community has since uprooted a small business, purchased a house, and closed a lane of traffic indefinitely.
The whole framing of the piece is ass-backwards. Semuels is correct that:
[this] would have been unimaginable in a higher-income neighborhood. Indeed, when Musk tried to build another underground tunnel in a wealthier neighborhood in West L.A., residents quickly sued. The project got tied up in court, and [died].
The CEQA allows residents 35 days to push back against granted exemptions…in Hawthorne, the 35-day window passed with little fanfare.
But unfortunately Semuels takes the posh, lawsuit-loving, NIMBY crowd as the appropriate normative standard and any deviations from that as suspect and indicative of the power of billionaires to run roughshod over other people’s rights. Instead, the Boring Company, the Hawthorne city government, and the people of Hawthorne should be applauded for their sensible, forward-thinking, and optimistic approach to new ideas. Bravo to Hawthorne! Hawthorne: Where the future is being made!
I do give Semuels credit, however. She writes honestly so that one can see the real story behind the false frame and she even tips the audience to the correct (Straussian?) reading in her final clever paragraph.
Vega [the owner of the cabinet business who was paid to vacate] has nothing negative to say about the Boring Company—he just blames himself for agreeing to be out so quickly. Nothing like this had ever happened to him before, so he didn’t know what was fair. Nor did he know how hard it would be to set up a new store—the process of getting new city permits, he said, is a lengthy one, and he can’t find a way to cut through the red tape.
From my time in both the military and healthcare I can say that the biggest problem are the compliance costs.
For example, I have a phone app that allows me to send texts. We pay very good money to have said app. It does nothing that my phone cannot innately do – except be HIPAA compliant. EMR software is clunky, an active time suck, and adds little or no value … but we are required by law to use it. In each case there are scads of less specific programs out there which are insanely cheaper and more functional, but those programs cannot justify the costs of becoming compliant for a small niche of their business.
In the military we had similar difficulties. If you want systems to be secure, you need to pay extra as the marketplace does not do real security for consumer goods. Likewise, if you worry about logistical tails, building in assured access drastically increases costs.
And I fully suspect that prices will continue to diverge. As ever more of the internet ends up in a giant interconnected mess there will be fewer people able to code in a secure fashion. There will be fewer parts of the ecosystem that can be used by security conscious actors.
Then we get to actual procurement itself. People worry that arcane institutions will somehow make off with lots of money and spend it either poorly or nefariously. Absent easily observed price and cost data in both sectors we began developing rules. These rules drive firms out of the market (e.g. we needed some light interior remodeling to comply with a regulation that specified inches between things, the contractor who has been most affordable and highest quality refused to bid because the hassle on his side was too great). Eventually the rules become too complicated and you start needing specialists to interpret them. Costs skyrocket and firms abuse rules to pad profits. Then the lawyers get involved and things get more expensive. Again, medical and military consumers become a captive market facing greater monopoly as fewer firms can navigate the thicket of rules to even try to make money.
Then we have the problem that people look at these sectors and say that it is public money. All public money should help with goal X (e.g. going “green”, affirmative action, boycotting South Africa/Israel, patriotism, “America first”) and then we become even more overly constrained. Find vendors who meet one hurdle is hard, finding ones that meet 30 is nigh unto impossible unless the vendor is engineering the firm to market solely to this niche – and charging monopoly rates as his reward.
Any single thing would not be too bad for prices, but the marketplace in general is diverging from military and healthcare. Even education is diverging with mandates in FERPA and political business constraints. We have pretty effectively restricted supply, why exactly would we not expect an increase in cost?
That is from “Sure.”
The very excellent Chris Blattman discusses his work in Medellin Colombia bringing criminal gangs into civil society.
From Tim Wu, in a recent NYT Op-Ed, he presents a polemic against “monopoly”:
Postwar observers like Senator Harley M. Kilgore of West Virginia argued that the German economic structure, which was dominated by monopolies and cartels, was essential to Hitler’s consolidation of power. Germany at the time, Mr. Kilgore explained, “built up a great series of industrial monopolies in steel, rubber, coal and other materials. The monopolies soon got control of Germany, brought Hitler to power and forced virtually the whole world into war.”
To suggest that any one cause accounted for the rise of fascism goes too far, for the Great Depression, anti-Semitism, the fear of communism and weak political institutions were also to blame. But as writers like Diarmuid Jeffreys and Daniel Crane have detailed, extreme economic concentration does create conditions ripe for dictatorship.
The first ten words are already a give-away, as is the beginning of the second cited paragraph. For contrast, this is from Thomas Childers, well-known historian of Nazi Germany:
In his biography of Henry Kissinger, historian Niall Ferguson notes that “old man Thyssen” — that is, German steel magnate Fritz Thyssen — “bankrolled Hitler.” Businessmen such as Thyssen using their financial assets to assist the Nazis was “the mechanism by which Hitler was funded to come to power,” according to John Loftus, a former U.S. attorney who prosecuted Nazi war criminals.
But the Nazis were neither “financed” nor “bankrolled” by big corporate donors. During its rise to power, the Nazi Party did receive some money from corporate sources — including Thyssen and, briefly, industrialist Ernst von Borsig — but business leaders mostly remained at arm’s length. After all, Nazi economic policy was slippery: pro-business ideas swathed in socialist language. The party’s program, the Twenty-Five Points, called for the nationalization of corporations and trusts, revenue sharing, and the end of “interest slavery.”
And Wu’s two other cited sources? Both focus mainly on IG Farben. Diarmuid Jeffreys is “an award-winning journalist and television producer with thirty years’ experience in the media industry.” He does have a book on IG Farben and the making of the German war machine, but it does not demonstrate how economic concentration brings totalitarian regimes to power, instead focusing on how IG Farben profited from Nazi war aims and helped build the Holocaust. Earlier in the 1930s, IG Farben had in fact resisted Nazification. though the company did jump on board once it saw Nazification as inevitable.
Here is the Daniel Crane essay on antitrust and democracy. Try this excerpt: “… it does not necessarily follow that Farben’s monopolistic position in the German chemical industry is causally related to the rise of fascism—or that monopoly enabled Nazism. Two matters should give us pause before making such an inference.” Read p.14 to see what follows, but here is one tiny bit: “Though gigantic, Farben remained smaller than three American industrial concerns—General Motors, U.S. Steel, and Standard Oil. Nor was Farben’s wartime market power exceptional.” On the other side of the ledger, Crane does note that fascistic governments, once in power, find it easier to take over and co-opt more highly concentrated industries, Farben being an example of that. So there is an argument here, but mainly one data point and also some very serious qualifiers.
Does that all justify the sentence “But as writers like Diarmuid Jeffreys and Daniel Crane have detailed, extreme economic concentration does create conditions ripe for dictatorship.”? “Ripe” is such a tricky, non-causal word.
I would instead stress that war, civil war, scapegoating, and deflation create the conditions “ripe for dictatorship.” You might want to toss Russia and China into the regression equation, or how about Cuba and North Korea and Albania and Pol Pot’s Cambodia? How would the coefficient on industrial concentration end up looking? I’d like to know.
When big business is the target, and tech in particular, the standards of proof for Op-Eds seem to decline. Somehow, because we all know that the big tech companies are bad, or jeopardizing democracy, it is OK to make weakly argued claims.
Last week I titled a post, Blockchains in Space!, as a satirical comment on blockchain mania. Obviously, I forgot the new rule that satire is no longer possible.
SpaceChain’s blockchain node has been launched into space on Oct 25, 2018. In the map below, you can track its movements to see exactly where it is in orbit.
The SpaceChain FAQ also provides a good example of a kind of doublethink that is very common in the blockchain world:
What is the difference between having a blockchain on Earth as opposed to in space?
Blockchain technology is hosted on centralized servers on Earth and are vulnerable to hacking. One way to prevent this issue is to get these platforms on a decentralized network such as SpaceChain’s blockchain-based network of satellites. Blockchain technology in space will be safer from other vulnerabilities such as internet kill switches or governments that are against the technology. In addition, blockchain technology in space will prove as a great use case for supply chains especially since there are certain places on Earth that are outside of coverage zones such as oceans, deserts and forests. These satellites will be able to track, monitor and scan these dead zones.
How do you ensure legal compliance with regulatory bodies in various countries?
We have a legal team to ensure full compliance. We also have team members and partners in China, Israel, Singapore and the US who work with local governing bodies to ensure that we are fully compliant with local regulations.
Ironically, I’m bullish on blockchain (I advise several firms in the space) but it would be nice to see real products with real customers before we start putting blockchains in space.
Yes, it is more popular, but how is it doing?:
Obamacare has continued to devastate the individual health insurance market:
- In March of 2016, there were 20.2 million people covered in the individual health insurance market according to a hard count of state insurance department filings done by Mark Farrah and Associates.
- In March of 2017 that count was down to 17.7 million.
- In March of 2018 the count was 15.7 million–a 22% drop in two years.
This means 4.5 million people lost their individual health insurance in just two years.
Hardest hit are the 40% of middle class individual market consumers who are not eligible for a subsidy.
In March of 2016 there were 7,520,939 people covered in the off-exchange individual health insurance market where subsidies are not available.
In March of 2017 5,361,451 were covered.
In March of 2018 4,004,522 were covered–a 47% drop in two years.
And, the Obamacare subsidies paid to consumers are hardly sustainable.
According to the CBO, the average Medicaid outlay for a non-disabled adult is $4,230–a program that virtually has no premiums and co-pays. But because the risk pool is so bad and therefore expensive in the Obamacare exchanges, the average subsidy cost for taxpayers is $6,300–and that doesn’t include what the consumer pays in premiums and out-of-pocket expenses for Obamacare coverage.
Why has the Obamacare individual market melted-down in these last two years? Because its premiums and deductibles are sky high–for all but the lowest income participants.
In Northern Virginia, for example, the cheapest 2019 Obamacare individual market Silver plan for a family of four (mom and dad age-40) making a subsidy eligible $65,000 a year costs $4,514. That plan has a $6,500 deductible meaning the family would have to spend $11,014 on eligible health care costs before collecting other than nominal first dollar benefits.
That same family, but making too much for a subsidy, as 40% of families do, and a typical family in the affluent Virginia 10th, would have to spend $19,484 in premiums plus a $6,500 deductible, for a total of $25,984 in eligible costs before they would collect any meaningful benefits.
That is from Robert Laszewski, with additional interesting points at the link. Do see my earlier post on what does and does not make sense in Obamacare — the risk pool for the individual market simply isn’t big or robust enough.
Spain is currently embroiled in tremendous debate over who should pay the AJD tax, a tax on the creation of a mortgage. Should the buyers (consumers) or the sellers of the mortgage (the banks) pay the tax? The Supreme Court, the President, and the legislature have all stepped in.
At the beginning of this year, the civil division of Supreme Court clearly ruled that the tax on mortgages should be paid by consumers and not banks. However, on the 18th of October the Contentious-Administrative division pronounced the other way, that banks should pay. So two divisions of different jurisdictions of the Supreme Court (civil and administrative) have issued conflicting sentences producing a legal mess…
The Spanish Supreme Court has done a U-turn again: it is the clients who must pay for a controversial mortgage tax, and not the banks
…The decision was reached on Tuesday evening in the Administrative Division of the Supreme Court after two days of intense debate, and with just two votes of difference: 15 justices were in favor of making the client pay the levy, and 13 voted to confirm a groundbreaking decision reached by this same court in mid-October that it should be the banks who pick up the tab.
Leaders are up in arms and street protests are threatened:
Leaders of the anti-austerity Podemos party have already announced protests over a decision that “calls into question” the court’s independence and undermines democracy, in the words of party leader Pablo Iglesias. …Alberto Garzón, head of the United Left coalition, went even further: “Private banks are thieves, they are the main enemy of democracy and they are responsible for gutting our economies. A majority of the Supreme Court sides with them, ratifying that justice has a price and that the system is rotten and spent,” he tweeted.
Under pressure, the socialist Prime Minister announced “a Royal Decree would be approved ‘so that Spaniards will never pay this tax again’,” and the Prime Minister pledged that the new law would be in place by Friday!
What’s amazing is that the Spanish uproar is over a decision that Econ 101 says does not make a whit’s worth of difference to anything of importance. Whether the buyers send the check to the government or the sellers does not change the true incidence of the tax. As Tyler and I say in Modern Principles, “Who pays the tax does not depend on the laws of Congress but on the laws of supply and demand.” The tax simply drives a wedge between what the buyers pay and what the seller receives. Since sellers typically post prices, when the sellers must send the check the posted price will include the tax but the price the sellers receive will be the posted price minus the tax. If buyers must send the check to the government the posted price will not include the tax but the buyers will have to pay the posted price plus the tax. Either way, the seller, buyer, and government all end up net the same amount. It’s little different than debating whether the right or left hand must pay the tax. See Tyler in the video below for the diagram and further details.
Thus, the whole Spanish imbroglio has been caused by a failure to understand Econ 101.
Addendum: Bank shares fluctuated as the tax jumped back and forth which might suggest non-neutrality but that is because an earlier proposal would have had the banks pay consumers “back” for taxes the consumers paid years ago. A retroactive tax would indeed be bad for banks because while the tax would be retroactive the price would not. Going forward, however, the price adjusts with the placement of the tax so there is little beyond convenience and transaction cost to prefer one system to the other. In fact, once it was established that the tax would not be retroactive, bank share prices recovered.
Hat tip: Mauricio Drelichman.
Jeffrey Sachs (not the economist) asks, Why are psychologists so prevalent in the free speech movement?:
If any academic field is associated with the contemporary debate surrounding free speech, it’s psychology. Haidt, Pinker, Peterson, Saad, Jussim, even Lehmann. All specialize or have backgrounds in academic psych.
The Scholar’s Stage offers a good answer:
I attribute this all to three things.
1. The conclusions academics reach tend to rankle the right. There are exceptions. If your research draws on evolutionary psychology, focuses on innate behavioral differences, or touches any sort of psychometrics (e.g., IQ), the angry tide does not sweep in from the right. The wave these men and women fear crashes in from leftward side. Moreover, the sort of leftist opposition that the academic consensus on these topics face leaves little room for rational debate or compromise: controversies over psychometrics or evolutionary psychology are usually framed in terms of good and evil, not right and wrong. The scientists involved are to be conquered, not reasoned with.
So that is point one: the people who want to shut controversial psychologists up are overwhelmingly creatures of the left.
2. Psychology, especially social psychology, is itself an overwhelmingly leftist discipline. We actually have data on this, and it is pretty grim: a recent survey of American tenure-track professors reveals that there 17.4 registered Democrat psychologists for every single registered Republican. If there is a field of people who ought to be sympathetic to social justice railroading, these people are it.
3. Despite this, behavioral scientists have not yet adopted the rhetorical techniques or methodology of inquiry of “critical theory.” In contrast, see how these modes of inquiry have swallowed up the fields of anthropology and communications, and established creeping colonies in history, sociology, and area studies. Given the left-leaning sympathies of almost all in the profession, the threat that the same might happen to the study of human behavior is real.
…Haidt et. al. are confident they can win the debate if they are allowed to debate. For the heterodox anthropologist or sociologist the game is already over: their discipline has already been conquered. For the economist, the threat is too remote to take seriously. Behavioral science exists in that rare in-between: methodologically, it has the tools to fight back against the excesses of the activist. Socially, it provides a compelling reason for its practitioners to use them.
From El Salvador (WSJ):
Politicians must ask permission of gangs to hold rallies or canvass in many neighborhoods, law-enforcement officials and prosecutors said. In San Salvador, the nation’s capital, gangs control the local distribution of consumer products, experts said, including diapers and Coca-Cola . They extort commuters, call-center employees, and restaurant and store owners. In the rural east, gangs threaten to burn sugar plantations unless farmers pay up.
At what point do we say the government has been replaced? On the analytics:
“We’ve left behind the era of the cartel and the kingpin,” said Alejandro Hope, a security consultant in Mexico City. “Today, most violence in Latin America is the result of a new system that’s more diverse, harder to control, and much more local.”
In Brazil to the south (NYT):
In Rio de Janeiro state alone, more than 5,197 people have been killed this year — far more than the 3,438 civilians killed in conflict last year in Afghanistan, according to United Nations figures.
One-quarter of those may have been killed by the state, a sign of state weakness not strength.
One approach is to view all this as a problem to be solved, and surely there is something to that attitude. Another approach, not mutually exclusive, is to view it as a problem that is getting harder to solve.
Abstract: This paper provides the first evidence of the effect of a U.S. paid maternity leave policy on the long-run outcomes of children. I exploit variation in access to paid leave that was created by long-standing state differences in short-term disability insurance coverage and the state-level roll-out of laws banning discrimination against pregnant workers in the 1960s and 1970s. While the availability of these benefits sparked a substantial expansion of leave-taking by new mothers, it also came with a cost. The enactment of paid leave led to shifts in labor supply and demand that decreased wages and family income among women of child-bearing age. In addition, the first generation of children born to mothers with access to maternity leave benefits were 1.9 percent less likely to attend college and 3.1 percent less likely to earn a four-year college degree.
That is the job market paper of Brenden Timpe, a brave man from the University of Michigan.
Legalizing drugs harms some black markets but spurs activities in others:
It is widely hypothesized that legalization disrupts illicit markets and displaces illegal suppliers, but the consequences for those who are displaced remain poorly understood. In this paper, I use comprehensive administrative data from three states that legalized marijuana covering all individuals released from prison in the years immediately before and after the policy change to estimate the effect of legalization on the subsequent criminality of convicted dealers. I find that marijuana legalization increased the 9-month recidivism rate of marijuana offenders by 6 percentage points relative to a baseline rate of 10 percent. The increased recidivism is largely driven by a substitution to the trafficking of other drugs, which is consistent with a Becker-style model where individuals develop human capital specific to the drug industry. To learn about potential mechanism behind these results, I use detailed drug transaction price data to estimate the effect of legalization on average prices and price dispersion, and I find suggestive evidence that both the average level and residual variance decline following legalization, which is consistent with legalization eroding rents earned in the illicit marijuana market. Lastly, I explore the generalizability of my findings in a distinct legalization experiment from history: the end of National Prohibition. I replicate the main insights at an organizational level and show that, in response to the repeal of Prohibition, the Italian-American Mafia shifted personnel from bootlegging to narcotics. Overall, the results in this paper suggest that an unintended consequence of drug legalization is a re-allocation of drug criminals to other illicit activity.
That is from Heyu Xiong, who is currently on the job market from Northwestern.
Are peaceful or violent protests more effective at achieving policy change? I study the effect of protests during the Civil Rights Era on legislator votes in the US House. Using a fixed-effects specification, my identifying variation is changes within the congressional district over time. I find that peaceful protests made legislators vote more liberally, consistent with the goals of the Civil Rights Movement. By contrast, violent protests backfired and made legislators vote more conservatively. The effect of peaceful protests was limited to civil rights-related votes. The effect of violent protests extended to welfare-related votes. I explore alternative explanations for these results and show that the results are robust to them. Congressional districts where incumbents were replaced responded more strongly. Furthermore, congressional districts with a larger population share of whites responded more strongly. This is consistent with a signaling model of protests where protests transmitted new information to white voters but not to black voters.
Here is the column, here is one bit:
I attended Harvard (for my doctorate in economics), and most of the people there are as well-meaning as any you might find in Idaho or West Virginia.
Step back from the emotions of the current debate and start with the general point that social elites need to replicate themselves, one way or another.
The collateral damage on Asian-American applicants is psychologically minimized and explained away as a problem that can only be remedied over time.
Few societies have methods of assuring cultural continuity that could be revealed transparently without causing at least some outrage or scandal… It is no accident that Harvard has strenuously resisted disclosing the methods of its admission processes.
Get the picture? By the way:
In the meantime, the elites will do everything possible to protect the system, co-opt the opposition, and make a mix of symbolic and real concessions…You will recognize these elites by their apologies, their attempts to shift the focus back to African-American issues, and their unwillingness to entertain fundamental change.
That is the forthcoming book by my excellent colleagues Noel Johnson and Mark Koyama, due out next January, you can now pre-order here.
Here is the Amazon summary:
Religious freedom has become an emblematic value in the West. Embedded in constitutions and championed by politicians and thinkers across the political spectrum, it is to many an absolute value, something beyond question. Yet how it emerged, and why, remains widely misunderstood. Tracing the history of religious persecution from the Fall of Rome to the present-day, Noel Johnson and Mark Koyama provide a novel explanation of the birth of religious liberty. This book treats the subject in an integrative way by combining economic reasoning with historical evidence from medieval and early modern Europe. The authors elucidate the economic and political incentives that shaped the actions of political leaders during periods of state building and economic growth.
I have read the entire thing (a slightly earlier draft), very definitely recommended.
The original Sears mail-order catalogue changed how African Americans in the South shopped:
…the catalogue format allowed for anonymity, ensuring that black and white customers would be treated the same way.
“This gives African Americans in the Southeast some degree of autonomy, some degree of secrecy,” unofficial Sears historian Jerry Hancock told the Stuff You Missed in History Class podcast in December 2016. “Now they can buy the same thing that anybody else can buy. And all they have to do is order it from this catalogue. They don’t have to deal with racist merchants in town and those types of things.”
In a heartfelt essay Ashlee Clark Thompson explains how the “grab and go” technologies now being tested at Amazon Go made her confront lessons learned from decades of shopping while black:
The idea of walking into a store, taking an item or several off the shelves and strolling right back out again boggled my mind. It ran counter to everything I had learned about being black and shopping.
…I grabbed one of the orange Amazon Go bags and began to make my way around the perimeter of the store. I was studying the various bottled waters and debating whether to get fizzy or still, or a bottle of kombucha, when I realized what I was really doing: I was stalling. The fear I had carried with me for decades reared its head as I stood in front of the refrigerated display. I was afraid to make a choice, remove it from a shelf and put it in my bag. I was afraid someone would pop out from behind a display of Amazon-branded merch and scream, “Get your hands off that!” And I was mad that this fear couldn’t even let me fully enjoy an experience that’s designed for everyone to grab and go, no questions asked.
Eff this, I thought. I’m getting some Vitamin Water.
Once the plastic bottle hit the bottom of my reusable bag, I glanced around to see if anyone noticed. The Amazon employees shuffled around the small store and restocked shelves. Tourists chatted in small groups as they pointed and looked for the sensors that were keeping track of our every move. One guy with his phone on a selfie stick recorded himself as he selected snacks. And then there were the folks for whom the novelty had worn off and just wanted a vegetarian banh mi sandwich.
No one cared what I was doing. Is this what it feels like to shop when you’re not black?
…Amazon Go isn’t going to fix implicit bias or remove the years of conditioning under which I’ve operated. But in the Amazon Go store, everyone is just a shopper, an opportunity for the retail giant to test technology, learn about our habits and make some money. Amazon sees green, and in its own capitalist way, this cashierless concept eased my burden a little bit.
The similarities in these cases are interesting but so are the differences. In the Sears case most of the effect of diminished discrimination was driven by greater competition in one-shop towns. In the one-shop town the owners sometimes took a share of their monopoly profits in invidious racism–this appears to explain why shop owners would prevent blacks from buying more expensive products (or perhaps the one-stop shop had to cater to racist customers who demanded invidious discrimination.)
In the Uber case my bet is that a large share of the reduction in discrimination was due to the fact that Uber drivers don’t carry cash and so are less worried about robbery and the app increases safety because it records in detail rider, driver and trip data. In other words, the Uber system reduced the value of statistical discrimination. It’s difficult to know for sure, however, because there was probably also some decline in invidious discrimination brought about by Uber hiding some rider information from drivers until trips are accepted.
The last case, the Amazon Go case, is in part a decline in the value of statistical discrimination since shoplifting is no longer a problem (in theory, assuming the technology works) but in this case the decline in statistical discrimination is driven by much finer discrimination. The moment a shopper enters the Amazon Go store, Amazon knows their name, address, entire shopping history, credit history and potentially much more. Moreover, a shopper’s every movement within the store is tracked to a level of detail that no store detective could ever hope to match. To the customer, especially the black customer, it may feel like they are no longer being watched but in fact they are watched more than ever before–the costs of technological monitoring, however, are mostly fixed which means that everyone is monitored equally. No need for statistical discrimination in the panopticon.
Addendum: A good dissertation might be to incorporates the cost of information, the value of statistical discrimination and the demand for invidious discrimination in a general theory that explains the various cases mentioned here and the effects of information bans such as ban the box.