Category: Law

Swiss fact of the day

Two months into Vladimir Putin’s brutal war of aggression in Ukraine, however, what is remarkable is just how little Russian capital actually seems to be in the Alps. Neutral, inscrutable Switzerland was, perhaps more than any other country, presumed to be the treasure house of the Putin kleptocracy.

But despite Bern having mirrored all of the US and EU sanctions against Russian oligarchs — measures that apply to around 900 people globally — just $8bn of Russian assets in the country have so far been frozen.

Consider, by comparison, that the channel island of Jersey alone has frozen $7bn of assets linked to a single Russian tycoon, Roman Abramovich.

Here is more from the FT.

The Myth of Primitive Communism

AEON: Today, many writers and academics still treat primitive communism as a historical fact. To take an influential example, the economists Samuel Bowles and Jung-Kyoo Choi have argued for 20 years that property rights coevolved with farming. For them, the question is less whether private property predated farming, but rather why it appeared at that time. In 2017, an article in The Atlantic covering their work asserted plainly: ‘For most of human history, there was no such thing as private property.’ A leading anthropology textbook captures the supposed consensus when it states: ‘The concept of private property is far from universal and tends to occur only in complex societies with social inequality.’

A Yagua (Yahua) tribeman demonstrating the use of blowgun (blow dart), at one of the Amazonian islands near Iquitos, Peru. JialiangGao www.peace-on-earth.org

In fact, although some tribes had communal sharing of (some) food, most did not. Private property, far from being unknown, was normal among all hunter-gatherers that have been studied. Manvir Singh writing in Aeon continues:

Agta hunters in the Philippines set aside meat to trade with farmers. Meat brought in by a solitary Efe hunter in Central Africa was ‘entirely his to allocate’. And among the Sirionó, an Amazonian people who speak a language closely related to the Aché, people could do little about food-hoarding ‘except to go out and look for their own’. Aché sharing might embody primitive communism. Yet, Hill admits, ‘the Aché are probably the extreme case.’

More damning, however, is a starker, simpler fact. All hunter-gatherers had private property, even the Aché….Individual Aché owned bows, arrows, axes and cooking implements. Women owned the fruit they collected. Even meat became private property as it was handed out. Hill explained: ‘If I set my armadillo leg on [a fern leaf] and went out for a minute to take a pee in the forest and came back and somebody took it? Yeah, that was stealing.’

Some proponents of primitive communism concede that foragers owned small trinkets but insist they didn’t own wild resources. But this too is mistaken. Shoshone families owned eagle nests. Bearlake Athabaskans owned beaver dens and fishing sites. Especially common is the ownership of trees. When an Andaman Islander man stumbled upon a tree suitable for making canoes, he told his group mates about it. From then, it was his and his alone. Similar rules existed among the Deg Hit’an of Alaska, the Northern Paiute of the Great Basin, and the Enlhet of the arid Paraguayan plains. In fact, by one economist ’s estimate, more than 70 per cent of hunter-gatherer societies recognised private ownership over land or trees.

Moreover, the sharing that some hunter-gatherers practiced was functional rather than ethical.

Whatever we call it, the sharing economy that Hill observed with the Aché does not reflect some lost Edenic goodness. Rather, it sprang from a simpler source: interdependence. Aché families relied on each other for survival. We share with you today so that you can share with us next week, or when we get sick, or when we are pregnant.

take away the function and the sharing disappeared, often brutally:

In their book Aché Life History (1996), Hill and the anthropologist Ana Magdalena Hurtado listed many Aché people who were killed, abandoned or buried alive: widows, sick people, a blind woman, an infant born too soon, a boy with a paralysed hand, a child who was ‘funny looking’, a girl with bad haemorrhoids. Such opportunism suffuses all social interactions. But it is acute for foragers living at the edge of subsistence, for whom cooperation is essential and wasted efforts can be fatal.

None of this should be surprising to anyone familiar with the property-rights tradition of Demsetz and Barzel. The primitive communism of hunter-gatherers is no different in principle from the primitive communism of the wifi service at Starbucks, the modern day police and fire departments, or the use of Shakespeare’s works. As Barzel put it, “New rights are created in response to new economic forces that increase the value of the rights.” Thus, in this respect, there are no major differences among peoples, only differences in transaction costs, externalities, and technologies of inclusion and exclusion.

Why the innocent can’t get out of prison

The main title is Barred, and the author is Daniel S. Medwed.  The book has many interesting points, here is one excerpt:

Alaska eliminated plea bargaining in 1975.  The rationale was grounded in fairness, with the governor at the time proclaiming that the new policy was designed to counter “weakened public confidence in the administration of justice.”  The conditions seemed ideal.  Small population, small(ish) amount of criminal activity, creative attorney general, open-minded governor.  The results were initially promising.  Although the number of trials in the state rose by 37 percent in the year following the ban, the system appeared capable of absorbing the surge.  But the experiment didn’t last.  A new state attorney general relaxed plea policies in 1980, and bargaining was officially back in the 1990s.  By the 2010s, nearly 97 percent of Alaska’s criminal cases resulted in pleas.  Those who’ve studied the history of plea bargaining Alaska attribute the demise of the ban to a change in  personnel in the AG’s office and a decline in state revenues.  Trials don’t come cheap.

Recommended, for those who care.

An Operation Warp Speed for Nasal Vaccines

I have been pushing for more funding for nasal vaccines since early last year when I wrote about trypanophobia and see also my Congressional testimony. The Washington Post reports that the idea is gaining traction among scientists but funding is limited:

As the omicron variant of the coronavirus moved lightning-fast around the world, it revealed an unsettling truth. The virus had gained a stunning ability to infect people, jumping from one person’s nose to the next. Cases soared this winter, even among vaccinated people.

That is leading scientists to rethink their strategy about the best way to fight future variants, by aiming for a higher level of protection: blocking infections altogether. If they succeed, the next vaccine could be a nasal spray.

…Scientists at the National Institutes of Health and the Biomedical Advanced Research and Development Authority — known as BARDA — are vetting an array of next-generation vaccine concepts, including those that trigger mucosal immunity and could halt transmission. The process is similar to the one used to prioritize candidates for billions of dollars of investment through the original Operation Warp Speed program. But there’s a catch.

“We could Operation Warp Speed the next-generation mucosal vaccines, but we don’t have funding to do it,” said Karin Bok, director of Pandemic Preparedness and Emergency Response at the National Institute of Allergy and Infectious Diseases. “We’re doing everything we can to get ready … just to get ready in case we have resources available.”

In my estimation, Operation Warp Speed was the highest benefit to cost ratio of any government program since the Manhattan Project. Amazingly, despite having now seen the benefits of the program and the costs of the pandemic, a government that spends trillions every year can’t get behind millions for a nasal vaccine.

To be sure, the emergency is over. The risk to the vaccinated are now tolerable and the benefits of further investment are much less than before vaccines were available. But the costs are also lower. Much of the research on nasal vaccines has already been done–what is needed is funding for clinical trials.

A nasal COVID vaccine will also pay off in future vaccine programs. If in a future pandemic we were able to use nasal vaccines to vaccinate more quickly, that alone could save many lives.

Addendum: Here’s my post on RadVac the do it yourself nasal vaccine.

The incidence of rent control

We use the price effects caused by the passage of rent control in St. Paul, Minnesota in 2021, to study the transfer of wealth across income groups. First, we find that rent control caused property values to fall by 6-7%, for an aggregate loss of $1.6 billion. Both owner-occupied and rental properties lost value, but the losses were larger for rental properties, and in neighborhoods with a higher concentration of rentals. Second, leveraging administrative parcel-level data, we find that the tenants who gained the most from rent control had higher incomes and were more likely to be white, while the owners who lost the most had lower incomes and were more likely to be minorities. For properties with high-income owners and low-income tenants, the transfer of wealth was close to zero. Thus, to the extent that rent control is intended to transfer wealth from high-income to low-income households, the realized impact of the law was the opposite of its intention.

That is from a new paper by Kenneth R. Ahern and Marco Giacoletti, via the economics-understanding Kevin Lewis.

A ray of good news

Every now and then this country, and for that matter the ACLU, does the right thing:

The American Civil Liberties Union helped scuttle a bill this week that would have enabled the Biden administration to liquidate Russian oligarchs’ assets and turn the proceeds over to Ukraine.

ACLU officials told lawmakers Tuesday that the legislation could run afoul of due-process protections in the U.S. Constitution because it does not allow its targets to challenge the government’s actions in court, according to two people familiar with the matter who spoke on the condition of anonymity to describe private talks. ACLU officials warned that the measure would probably be struck down by the judicial branch if enacted as proposed, giving Russia a potential propaganda victory over the United States, the people said.

Here is the full article.  Shame on all of you who supported this!

My excellent Conversation with Roy Foster

Here is the audio, video, and transcript.  Here is part of the episode summary;

Roy joined Tyler to discuss why the Scots got off easier than the Irish under British rule, the truths and misconceptions about Ireland as a policy laboratory for the British government, why spoken Irish faded more rapidly than Welsh, the single question that drove a great flowering of Irish economic thought, how Foster’s Quaker education shaped his view of Irish history, how the Battle of the Somme and the 1916 Easter Rising cemented the rift between the Northeast and the rest of the country, what went wrong with Irish trade policies between the 1920s and 1970s, the power of Irish education, why the re-emergence of The Troubles in the 1960s may not have been as inevitable as many people believe, the cultural effects of Ireland’s pro-Allied neutrality in World War II, how Irish visual art is beginning to be looked at in a similar way to Irish literature, the social and economic changes of the 1970s that began to radically reshape Irish society, the reasons for Ireland’s openness to foreigners, what Irish Americans misunderstand, and more.

Here is an excerpt:

COWEN: If we think of the 19th century, as you know, I think it’s in 1831 that free universal schooling comes to Ireland. Are there ways in which, in the 19th century, Ireland is more modern than Britain?

FOSTER: That’s a very interesting and subtle question.

There is a theory that Ireland is used as a laboratory for British government and that they will apply further afield, in India and the Caribbean, models and lessons that they’ve learned in Ireland, which is sometimes referred to as Britain’s oldest or England’s oldest colony.

I have a slight problem with that, because Ireland is a very special kind of colony, if it’s a colony: it’s a metropolitan colony. The original inhabitants remain, one could say, in a far stronger position than in many of the areas of the British Empire, where they are effectively either enslaved or wiped out. But the point is really that what’s happening in Ireland in the 18th and 19th century is, as I’ve said earlier, a kind of dispossession.

But at the same time, there are elements — and this is true from the Act of Union, which abolishes the old, very elite Irish Parliament in 1800 — there are elements of experimentation in the British government of Ireland which aren’t (I have to say this) entirely malign, and you zero in on education. The attempt that was being made in the early 1830s was to introduce a nondenominational form of primary education for the Irish people.

Ireland being Ireland, it was rapidly denominationalized: the Catholics used it for their purposes and the Protestants used it for their purposes. But the theory of it was that you had to overcome the religious differences, which by the early 19th century seemed to dictate everything that was happening in Ireland.

The great novelist William Thackeray, who was married to an Irish woman, said when he did a tour of Ireland and wrote his Irish Sketch Book, “Where to get at the truth in this country: it is not possible. There are two truths, the Catholic truth and the Protestant truth.” By the early 19th century, this seemed all too true.

Substantive throughout, in my view one of the very best CWTs in some while.

*Arbitrary Lines*, by M. Nolan Gray

The subtitle is How Zoning Broke the American City and How to Fix It, and here is one bit:

By today’s standard, New York’s 1916 zoning code is surprisingly liberal.  Modern zoning mainstays, like use subcategories or explicit floor area limits, are absent.  This is because the framers of New York’s zoning ordinance saw themselves as balancing a desire for some control against a natural skepticism of this new institution.  After all, as a historically unprecedented curtailment of property rights, the constitutionality of zoning was very much in question, and one ill-conceived regulation risked a court decision that could imperial the entire project.  The strategy of starting small worked, and the code survived, expanding from just a small pamphlet to hundreds of pages over the coming decades, before the 1961 rewrite.

And this:

At the end of 1916, 8 municipalities had adopted some form of zoning, and over the next seven years, a steady stream of municipalities would follow, such that by 1923, 218 municipalities had adopted zoning.

Nolan is an urban planner who is very skeptical of such zoning.  Recomnended, and I am pleased that both Mercatus and Emergent Ventures had a hand in supporting this project.

Marijuana fact of the day

In California, three years into the era of legalization under the Proposition 64 ballot initiative, data indicate that only about one-quarter of weed sold and consumed in the state is legally licensed and that the remaining three-quarters is produced outside legal market channels.

And from a later chapter:

And that is why some people say, and we consider it plausible, that the so-called legalization of weed in some North American markets has illegalized more weed than it legalized.

That is from the new and excellent Can Legal Weed Win?: The Blunt Realities of Cannabis Economics, by Robin Goldstein and Daniel Sumner.

The benefits of educational migration

That is the topic of my Bloomberg column, and I offer up a very concrete proposal:

The educational migration idea also has potential for the U.S., though with additional hurdles. American universities typically offer some tuition aid to foreign students, but they could pledge to do more. Imagine if every school in America offered 10 additional zero-tuition slots a year to students from very poor countries. The strain on the facilities of most schools would be minimal, yet with about 5,000 institutions of higher education in America, that could amount to tens of thousands of new slots for educational migrants.

Given the great and justified interest in helping emigrants from Ukraine, the U.S. and other countries might also consider special programs for Ukrainian students. Millions are leaving Ukraine, and while the charitable response has been impressive, over the longer term these individuals will need to find good jobs. Education is one major step toward this end.

And some caveats:

It remains to be seen how readily educational migration can be scaled. Not all students from poor countries have the linguistic and cultural preparation to study in the West. They may require mentoring, and they may have difficulties navigating the university application process. Universities, and the charities working with them, may have to work harder to create admissions tests that are relevant, challenging and secure. Still, they may get better at those tasks the more they try to make educational migration work.

For the original pointer I thank Richard Nerland.

How to Get Tough on Crime

Republicans attack judges for being soft on crime but judges mostly determine sentence lengths and as Jason Willick argues in the Washington Post, sentences lengths are long and making them longer probably won’t help. 

A comprehensive 2013 review of the literature by Carnegie Mellon criminologist Daniel Nagin found that “there is little evidence that increasing already long prison sentences has a material deterrence effect.”…A 2021 analysis by economists Evan K. Rose of the University of Chicago and Yohan Shem-Tov of UCLA found that while serving time behind bars reduces the likelihood that someone will reoffend in North Carolina, there are diminishing returns to longer sentences.

So what can be done?

George Mason University economist Alex Tabarrok, in reviewing some of the evidence on crime deterrence in 2016, wrote: “We need to change what it means to be ‘tough on crime.’ Instead of longer sentences let’s make ‘tough on crime’ mean increasing the probability of capture for those who commit crimes.”

Six years on, we appear headed in the opposite direction. Just 50 percent of murders were solved in 2020 — the lowest rate in at least 40 years. Efforts to beef up police forces, at least in progressive jurisdictions, are likely to face political resistance.

Longer sentences for convicted criminals, meanwhile, remain difficult to oppose on the merits (except perhaps for drug crimes). That was evident during the Jackson hearings, when Republicans attacked her sentences in certain child-pornography cases as too lenient. Democrats shied away from defending the sentences themselves, instead simply explaining that they were within the mainstream.

The Jackson hearings showed that the GOP perceives a political advantage on crime. The key to actually bringing rates down, however, is not a more punitive judiciary, but more effective prosecutors and police. Republicans’ political messaging would pack more policy punch if they focused their attention there.

What Operation Warp Speed Did, Didn’t and Can’t Do

Operation Warp Speed was a tremendous success and one that I was pleased to support from the beginning. Many people, however, are concluding from the success of OWS that big Federal funding can solve many other problems at the same speed and scale and that is incorrect.

First, it’s important to understand that OWS did not create any scientific innovations or discoveries. The innovative mRNA vaccines are rightly lauded but all of the key scientific ideas behind mRNA as a delivery mechanism long predate Operation Warp Speed. The scientific advances were the result of many decades of work, some of it supported by university and government funding and also a significant fraction by large private investments in firms such as Moderna and BioNTech. It was BioNTech recall that hired Katalin Karikó (and many other mRNA researchers) when she couldn’t get university or government funding. Since OWS created no new scientific breakthroughs there isn’t much to learn from OWS about the efficacy of large scale programs for that purpose.

Second, it’s important to understand that we got lucky. OWS made smart bets and the portfolio paid off but it could have failed. Indeed, some OWS bets did fail including the Sanofi and Glaxo-Smith-Klein vaccine and the at-best modest success of Novavax. Many other vaccines which we didn’t invest in but could have invested in also failed. To be clear, my work with Kremer et al. showed that these bets and more were worth taking but one should not underestimate the probability of failure even when lots of money is spent.

So what did Operation Warp Speed do? There were four key parts to the plan 1) an advance market commitment to buy lots of doses of approved vaccines–this was important because in past pandemics vaccines had entered development and then the disease had disappeared leaving the firms holding the bag with little to show for their investment 2) the lifting of FDA regulations to allow for accelerated clinical trials, for example, phase 3 trials could start before phase 2 trials were fully complete 3) government investment in large clinical trials–clinical trials are the most expensive part of the development process and by funding the trials generously, the trials could be made large which meant that they could be quick 4) government investment in capacity, building factories not just for the vaccines but also for the needles, vials and so forth, even before any of the vaccines were approved–thus capacity was ready to go. All of these steps shaved months, even years, off the deployment timeline.

The key factor about each of these parts of the plan was that we were mostly dealing with known quantities that the government scaled. It’s known how to run clinical trials, it’s known how to produce vials and needles. The mRNA factories were more difficult but scaling problems are more easily solved with investment than are invention problems. It’s also known how to lift government regulations and speed the bureaucracy. That is, no one doubts that lifting regulations and speeding bureaucracy is within our production possibilities frontier.

It also cannot be underestimated that OWS funded people who were already extremely motivated. The Pfizer and Moderna staff put in near super-human effort–many of them felt this was the key moment of their life and they stepped up to their moment. OWS threw gasoline on fire–don’t expect the same in a more normal situation.

Another factor that people forget is that with vaccines we had a very unusual situation where the entire economy was dependent on a single sector–a macroeconomic O-ring. As a result, the social returns to producing vaccines were easily a hundred times (or more) greater than any potential vaccine profits. Thus, by accelerating vaccine production, OWS could generate tremendous returns. Most of the time, markets internalize externalities imperfectly but reasonably well which means that even if you accelerate something good the total returns aren’t so astronomical that you can’t overspend or spend poorly. Governments can spend too much as well as too little so most of the time you have to factor in the waste of overspending even when the spending is valuable–that problem didn’t really apply to OWS.

So summarizing what do we need for another OWS? 1) Known science–scaling not discovering, 2) Lifting of regulations 3) Big externalities, 4) Pre-existing motivation. Putting aside an Armageddon like scenario in which we have to stop an asteroid, one possibility is insulating the electrical grid to protect North America from a Carrington event, a geomagnetic storm caused by solar eruptions. (Here is a good Kurzgesagt video.) Does protecting the grid meet our conditions? 1) Protecting the electrical grid is a known problem whose solution does not require new science 2) protecting the grid requires lifting and harmonizing regulations as the grid is national/inter-national but the regulations are often local, 3) The social returns to power far exceed the revenues from power so there are big externalities. Indeed, companies could have protected the grid already (and have done so to some extent) but they are under-incentivized. (The grid is aging so insulating the gird could also have many side benefits.) 4) Pre-existing motivation. Not much. Can’t have everything.

I think it’s also notable that big pandemics and solar storms seem to occur about once in every one hundred years–just often enough to be dangerous and yet not so often that we are well prepared.

Thus, while I think that enthusiasm for an “OWS for X” is overblown, there are cases–protecting the grid is only one possibility–where smart investments could pay big returns but they must be chosen carefully in light of all the required conditions for success.

Bounty Hunters Work

New York pays bounty hunters for documenting parked trucks that idle their engines more than 3 minutes.

NYTimes. [The] Citizens Air Complaint Program, a public health campaign that invites — and pays — people to report trucks that are parked and idling for more than three minutes, or one minute if outside a school. Those who report collect 25 percent of any fine against a truck by submitting a video just over 3 minutes in length that shows the engine is running and the name of the company on the door.

The program has vastly increased the number of complaints of idling trucks sent to the city, from just a handful before its creation in 2018 to more than 12,000 last year.

…Mr. Slapikas said he pulled in $64,000 in rewards in 2021 for simply paying attention on his daily walks for exercise: “I would expect to get three a day without even looking.”

Who would have thought it? Bounty hunters are more effective than the police at discovering crimes. Imagine if they applied such a system to accused criminals out on bail?

Of course, as with tax-farming we don’t always want efficiency in the prosecution of the laws.

Do Americans really want full Daylight Savings Time?

But in exchange for later sunsets, people have to be OK with dark mornings. And that’s not a universally popular tradeoff. Americans actually experimented with permanent daylight saving time starting in January 1974, and it didn’t go well. As reported in The Washington Post, support for year-round daylight saving time fell from a majority in late 1973 to around 30 percent in February and March 1974. According to Louis Harris polling that March, people were much more likely to say the change was a bad idea (43 percent) than a good one (19 percent). Parents who found themselves sending their children to school on pitch-black, cold winter mornings were particularly upset. But anyone who wakes up on the early side — which many Americans do — might also dislike slogging through an extra hour of darkness as they begin their day.

Here is the full piece, by Amelia Thomson-Deveaux and Jean Yi at 538.  My personal preference is to keep mornings as light as possible and never have DST.  Fortunately, the House may rebel against the current Senate plan.