Assorted links
2. What's happened to the New York Stock Exchange?
4. Animal homosexuality (pdf).
6. Speculative results on gaze and politics (interesting, but I've looked only at the link).
Markets in everything
Kindle eBook, for $6,431.20 — Selected Nuclear Materials and Engineering Systems.
Don't forget, we get a commission if you buy one.
For the pointer I thank Jason Lewis.
Advice for a future regulator
WW, a loyal MR reader, emailed me a request:
My friend recently accepted a fellowship at REDACTED and will be starting in a few months. I was wondering what advice or reading suggestions you might have for a future component of the regulatory regime.
I am assuming this is not a "policy level" position. I suggest these pointers:
1. Ponder whether you actually wish to move up into a managerial position over time. Your job will change a lot and your headaches will increase. Inertia will push you in this direction, but don't take it for granted.
2. Figure out in advance what kinds of cognitive capture you will be subject to, and whether you wish to fight or embrace them.
3. Watch Kurosawa's movie Ikiru, about a dying Japanese bureaucrat and his final quest for meaning.
4. Keep on reading within the field you work on. There will be a tendency to assume you "know it all," but the perspectives of outsiders will remain valuable, even if they commit stupid blunders on some of the details.
5. If you don't already know, learn the value of ambiguity and how to build alliances in the workplace. Many people remain bad at these skills.
What else can you all think of?
Addendum: David Henderson has more.
Skating Lessons
Yesterday I inaugurated the New Year by taking the kids ice skating. Naturally this got me to thinking about economics, specifically Dan Klein's modern classic, Rinkonomics: A Window on Spontaneous Order.
Long ago people didn't know anything of skating. Imagine yourself one of them. Imagine that a friend walks up to you and tells you with great enthusiasm about his new idea for a business:
"I'll build a huge arena with a smooth hard wooden floor and around the perimeter a naked iron hand-rail. I'll invite people to come down to the arena and strap wheels onto their feet and skate round n' round the arena floor. They won't be equipped with helmets, shoulder-pads, or knee-pads. I won't test their skating competence, nor separate skaters into lanes. Speedsters will intermingle with toddlers and grandparents, all together they will just skate just as they please. They'll have great fun. And they'll pay me richly for it!"
Knowing nothing of skating, you would probably expect catastrophe. You exclaim: "How are 100 people supposed to skate around the arena without guidance or direction?…The arena will be a scene of collision, injury, and stagnation. Who will pay for that?!"…
Yet, we have all witnessed roller skating, and we know that somehow it does work out. There are occasional accidents, but mostly people stay whole and have fun, so much so that they pay good money to participate. The spectacle is counter-intuitive. How does it happen?…
An important quality of collision is mutuality. If I collide with you, then you collide with me. And if I don't collide with you, you don't collide with me. In promoting my interest in avoiding collision with you, I also promote your interest in avoiding collision with me.
The key to social order at the roller rink is this coincidence of interest.I do not intend to promote your interest. I am not necessarily even aware of it. Still, by looking out for myself I am to that extent also looking out for you. My actions promote your interest.
Skating on the floor of the roller rink is an example of what Friedrich Hayek called spontaneous order.
John Stossel memorably demonstrated the alternative process of centrally planned skating in this video (starting about 3:16).
How to eat well anywhere in Mexico
You'll sometimes hear fallacious claims that San Miguel Allende or Guanajuato or other parts of Mexico don't have superb food. What is true, in many Mexican cities, is that almost every place near the main square is only so-so. Here's what to do:
1. Look for time-specific food. In San Miguel for instance, there is barbacoa [barbecue] from 8-10 a.m., carnitas from about 11-4, and wonderful chorizo after 8 p.m. In Mexico, if the food is available only part of the day, it's almost always good. It's for locals and there is no storage in these places so it's also extremely fresh.
2. Often the best meals are served in places which have no names. In San Miguel the "brothers Bautista" run the best carnitas stands, but there is no sign and no marking. The stands are simply there on the side of the road, with some plastic tables and chairs, at a few places around town. Everyone in town knows about them.
3. Ask around with taxi drivers and be persistent. Ask the older taxi drivers. Throw away your guidebook, no matter which one you have.
4. Use breakfast and lunch for your best meals; dinner is an afterthought. Almost everywhere good is closed by 8 p.m. or often long before then. Always visit a place that closes by 1 p.m.
5. Roadside restaurants, on the edges of towns or between towns, serve some of the best food in Mexico or anyhere else for that matter. Some of these restaurants even have names, though you can overlook that in the interests of eating well.
Peak travel
A study of eight industrialized countries, including the United States, shows that seemingly inexorable trends – ever more people, more cars and more driving – came to a halt in the early years of the 21st century, well before the recent escalation in fuel prices. It could be a sign, researchers said, that the demand for travel and the demand for car ownership in those countries has reached a saturation point…
Most of the eight countries in the study have experienced declines in miles traveled by car per capita in recent years. The U.S. appears to have peaked at an annual 8,100 miles by car per capita, and Japan is holding steady at 2,500 miles.
Here is more.
Real wages for the previously unemployed
Catherine Rampell reports:
Nearly 7 in 10 of the survey’s respondents who took jobs in new fields say they had to take a cut in pay, compared with just 45 percent of workers who successfully found work in their original field.
Of all the newly re-employed tracked by the Heldrich Center, 29 percent took a reduction in fringe benefits in their new job. Again, those switching careers had to sacrifice more: Nearly half of these workers (46 percent) suffered a benefits cut, compared with just 29 percent who stayed in the same career.
Assorted links
1. Thomas Hazlett on Alfred Kahn.
2. Kent Annan has a new book coming out.
3. Gelman and Salam on threshold earners, more.
4. Bolstering the case for constitutional monarchy.
5. Putting Alzheimer patients on higher indifference curves.
Classical music for $100
Enda asks:
Loyal MR reader and consumer of alternative/indie/rock music here. If someone asked me for a broad introduction to the best of the genre with a budget of $100, my personal recommendation would be to purchase Sgt Pepper (The Beatles), skip most of the next two decades, Doolittle (Pixies), OK Computer (Radiohead), Pinkerton (Weezer), Siamese Dream (Smashing Pumpkins), Loveless (My Bloody Valentine), Is This It (The Strokes), Songs for the Deaf (Queens of the Stone Age) and Funeral (Arcade Fire).I have a $100 budget for an introduction to classical music and an essentially blank canvas. Your recommendations?
I'll price this by the CDs rather than the MP3s:
1. Start with a box of the Beethoven symphonies, either Gardiner or van Karajan cost only $20. (For $43 the Klemperer set offers the piano concerti as well.)
5. Mozart, symphonies 40 and 41 and other late symphonies, $15.
That brings us to about $68. For the rest I would draw from Dvorak's New World Symphony, Schubert (Symphony 9 or Trout Quintet, with superb pairings on both CDs), assorted Chopin, Beethoven piano sonatas, or Monteverdi, or Philip Glass Songs from the Trilogy. In general, try whichever pieces might have personal meaning to you; for instance if you liked the movie Black Swan, buy Tchaikovsky's Swan Lake (by either Previn or Pletnev) I've focused on the most accessible pieces, but if you wish to skip ahead Schubert's String Quintet is better than the Trout, Op.31, etc.
Prospects for a Space Elevator
Fun video clip from BBC on material science and prospects for a space elevator.
Incentives vs. the TSA
Every spring, private security officers at San Francisco International Airport compete in a workplace "March Madness"-style tournament for cash prizes, some as high as $1,500.
The games: finding illegal items and explosives in carry-on bags; successfully picking locks on difficult-to-open luggage; and spotting a would-be terrorist (in this case Covenant Aviation Security's president, Gerald L. Berry) on security videos.
"The bonuses are pretty handsome," Berry said. "We have to be good – equal or better than the feds. So we work at it, and we incentivize."
Somehow, this I had not known, nor had I known it was possible:
Some of the nation's biggest airports are responding to recent public outrage over security screening by weighing whether they should hire private firms such as Covenant to replace the Transportation Security Administration. Sixteen airports, including San Francisco and Kansas City International Airport, have made the switch since 2002.
The full story is here.
Assorted links
Most Popular Marginal Revolution Posts from 2010
Here are the most popular Marginal Revolution posts from 2010 as measured by landing pages and page views.
1. Book lists were very popular as a category. The highest ranked post in terms of page views was Tyler's Books which have influenced me the most which created a blogosphere avalanche. Links to other people's lists (of influential books) was also very popular. As was Books of the year, 2010 and peculiarly this post on The best-selling book of all time.
2. The number one linked post was What happened to M. Night Shyamalan? a one-liner and one-picturer. Also very popular in the category of "quickies" were Barbados v. Grenada, the demand for own-goals, Dead Birds, Freak-onomics, Nazi-Nudging, and Yuck_markets in Everything.
3. One Game Machine per Child on the failure of a computer voucher program to raise grades (but it did increase gaming).
5. The Dark Magic of Structured Finance.
7. Peter A. Diamond.
10. Why Did the Soviet Union Fall? (from 2007).
12. A Theory for Why Latvian Women are Beautiful.
Other substantive posts with high popularity (in the top-50) were my posts Insiders, Outsiders and Unemployment and The Philosophical Cow and Tyler's posts How many children should you have?, Is there a case for a vat?, Does the Law Professor have cause to complain? and Why is Haiti so Poor?
Two of my posts from previous years were also popular in 2010, from 2008 What is New Trade Theory? on Paul Krugman's Nobel and from 2005 Why Most Published Research Findings are False.
Hope you have enjoyed this years offerings. What have I missed?
What falsehood would you most likely think is true?
Is that the best way to sum up the question? S.L., a loyal MR reader, asked:
What is the thing that would with highest likelihood be true if you didn't know it was probably not? This is extremely interesting but also too broad to get a handle on—easier to think about in certain areas. E.g. what is the economic non-fact that satisfies this, or the physical ("god does not play dice" is up there).
I will try "that the universe as we know has not been there forever." When I was a kid it seemed obvious to me that the sky and stars had always been there, albeit with some recycling of content, much like they changed the TV shows every few years or so. I was surprised to learn about the Big Bang, at first held out hope for steady state matter theories, and now again see that some form of constancy may survive at the level of the metaverse.
How about in economics? I am surprised how little power real interest rates have to predict investment. I am surprised how few investors can consistently violate/beat the weak efficient markets hypothesis (aren't lots of people simply smarter than the marginal investor?). And I am surprised that the Industrial Revolution ever took place, after not having taken place for so long.
Your picks?
What will happen with real wages?
Put aside the rise of China, and think back to when the three major economies were the United States, Japan, and Germany.
Japan has seen a continuing decline in real wages. The German data are harder to assess, but we have seen periods of wage declines, a lot of wage stagnation, and arguably real wages have declined relative to education levels in the work force.
If we look at U.S. real wages over the next ten years, what is the chance that they rise?