IQ hoax

A table purporting to show IQ by state swept through the blogosphere last week mostly because liberal bloggers enjoyed trumpeting the high correlation it showed between high-IQ and voting for Gore in 2000. Turns out that the table was a hoax. Steve Sailer has the whole story including some real data on education by state and IQ by nation.

Telephone history: lessons for today

Have you ever wondered how America became a world leader in mass media and telecom? Paul Starr’s excellent The Creation of the Media addresses this question. Here is one good bit from the book:

French policy was…unfavorable to the telephone. Unwilling to spend public funds on the medium, the French government, beginning in 1879, granted local concessions for telephone service lasting only five years. The idea was to let the private sector assume the risk of a new business, giving the state time to see if it was worth taking over. Private capital could lose money on the telephone, but if the medium proved profitable the government would step in: a policy nicely designed to depress investment. In 1885, the government itself began building long-distance lines but limited construction so as not to cause too rapid a depreciation of its investment in the telegraph. Four years later, it nationalized the local telephone carriers as well, not so much because of a positive commitment to improve telephone service as because of a defensive concern about the erosion of the state’s telegraph monopoly…

By 1895, while the United States had one telephone for every 208 people…France [had] one for every 1,216…In 1927, while Bell was reporting an average delay of 1.5 minutes in placing long-distance calls, it took, on average, more than an hour to put through a call from Paris to Berlin.

The bottom line: Keep this story in mind the next time you hear politicians talking about the regulation of VOIP.

Do dogs resemble their owners?

Yes, but only if the dogs are purebreds.

The researchers photographed 45 dogs and their owners at three dog parks and gathered information about the breeds and how long owners and pets had been together. They then asked 28 students to try to match the people to the pooches.

The students were able to match dogs to their owners, but only when the dogs were purebred.

“The results suggest that when people pick a pet, they seek one that, at some level, resembles them, and when they get a purebred, they get what they want,” the researchers wrote. “A nonpurebred puppy’s final appearance is unpredictable, and so the resemblance . . . should be confined to the much more predictable purebreds.”

There was no relationship between how long owners had lived with their dogs and the chance that their appearances would match.

“These results were consistent with the notion that the ability to match is due to selection rather than convergence,” they wrote. “However, it does appear that, as in the case of selecting a spouse, people want a creature like themselves.”

Here is more statistical information.

Not surprisingly, many commentators believe that we select Presidents on the same basis.

Mother’s day facts

Most Americans will remember to call their mothers or send cards for Mother’s Day tomorrow, but about one in four will forget [is that the right word?] the national holiday altogether, according to a new survey.

Here’s more:

Those who do remember Mom are expected to spend an average of $98.64 this year, according to a report by the National Retail Federation, a D.C. trade association.
The amount is slightly more than last year’s $97.37, said NRF spokeswoman Ellen Tolley.
“Mother’s Day saw a huge increase in consumer spending right after September 11, but since then it has stabilized to a gradual increase,” Miss Tolley said. In 2000 and 2001, the average spending per customer was less than $65.

Total spending for the holiday is estimated at over $10 billion. Here is the full story.

In a few days’ time, I’ll be up north in New Jersey and taking my mom (who reads this blog) out for food, movie, and museum. As for today, Yana and I are taking her mom to Thai food, the theater, and the superb Mayan exhibit at the National Gallery.

Happy Mother’s Day to all the moms!

Do Chinese raw material demands harm the U.S.?

Oil just hit $40 a barrel. Many analysts, such as Paul Krugman have noted the Chinese role in pushing up commodity and natural resource prices:

Lately we’ve been hearing a lot about competition from Chinese manufacturing and Indian call centers. But a different kind of competition – the scramble for oil and other resources – poses a much bigger threat to our prosperity.

I am surprised to see Krugman so qualifying his former belief in the virtues of free trade. Keep in mind that the core theory of international theory is a barter theory. “The Chinese buying oil” and “the Chinese selling bicycles” are just two sides of the same coin. If you don’t think one can harm the U.S., you shouldn’t, in general, think the other will harm the U.S. either. (Of course if your vision of free trade is we get the bicycles but give up nothing in return, we are worse off relative to that state of affairs!)

Here is another way to think of the logic. If the Chinese are bidding up the price of oil, they have found good uses for that resource. If they have a comparative advantage in buying oil, that benefits the rest of the world. Comparative advantage in production also will mean comparative advantage in buying certain inputs. The U.S. still has access to its previous production possibilities frontier. It must now decide whether it would rather spend its money on oil, or on something else, perhaps the outputs of the Chinese.

This analysis, of course, requires qualification. For instance Chinese uses of oil are often more polluting than American uses. This is a valid cause for concern. Distribution and transition effects can delay or modify the benefits of free trade. Some relative price shifts can occasion greater external effects than others. Theoretical economists also will recognize cases of “increasing returns” and “strategic trade policy” as providing possible exceptions to the benefits of free trade. Krugman in the past, of course, has stressed that these exceptions are unlikely to prove policy relevant.

But put all of these complicated cases to the side. The “first cut” approach to the problem should suggest that Chinese oil purchases, viewed in their proper general equilibrium terms, do not make the rest of the world worse off.

Addendum: Here is critical commentary from the ever-intelligent Randall Parker.

How to limit prostitution in poor countries

Raise male wages. Most prostitutes must forego or postpone marriage, because most men do not want to marry a prostitute. The more appealing the marriage prospects, the lower the relative return to prostitution. Andrew David Chamberlain gives more analysis, and links to the relevant research.

Thanks to Michael of for the pointer. I”ll also note I enjoyed his recent survey of conservative and libertarian thought in the blogosphere, not the least because he had nice words for Alex and me.

America’s economic secret

I was privileged to take the Washington-Trenton train, round trip, over the last two days. As you may know, this route takes you past some of America’s most spectacular industrial decay. (I recommend bringing Philip Glass music on CD with headphones; it makes your trip feel like the Koyaanisqatsi movie, experienced live.)

Some Europeans might regard the decay as reflecting our economic weakness. But they have it backwards: our willingness to let industries decline is a significant source of our economic strength. A country with no declining industries is a country that doesn’t have many better new ideas.

Here is a New York Times article about how the French are having a hard time accepting deindustrialization.

“[The French are] fighting against windmills – the process of disindustrialization is inevitable,” said Daniel Gros, director of the Brussels-based Center for European Policy Studies. “Those countries who slow that process pay. The problem is not that there is disindustrialization in France, but that it isn’t happening fast enough.”

Not suprisingly, the French are looking toward subsidies to slow down these changes. Here is an excellent article on just how much of American productivity growth comes from allowing losing sectors to decline.

Outsourcing anyone?

How to measure success or failure in Iraq

Currently a U.S. dollar buys 555 Iraqi dinar. You can track the fluctuating price at this web site. Perhaps over time they will develop forward contracts contingent on major events. This might include the election, or perhaps the resignation of various high government officials?

By the way, if you think you understand what is going on in Iraq, you can trade in the market.

And try this site if you wish to compare prices. How is this for a marketing line?

After decades of underinvestment, Iraq’s agriculture sector is poised to make the country once again the bread basket of the Middle East

Or this?

In the President’s radio address, President Bush reconfirmed the Adminstrations stance for a “Strong Dinar Policy”. The new dinar will be used throughout Iraq, thereby unifying the economy and the country.

Another site suggests:

According to recent releases by the US Department of State, the economic recovery of Iraq is in process and occuring quickly.

I’m glad to hear that. As is commonly the case in new markets, it is easier to go long than short.

Milton Friedman’s Monetary History

Cato Journal devotes a special issue to this marvelous book, co-authored with Anna Schwartz. Contributors to this symposium include Friedman, Schwartz, Allan Meltzer, William Poole, and Bennett McCallum. Of course Friedman’s monetary explanation of the Great Depression, radical in its time, is now part of the mainstream. And I see this book as providing a better statement of Friedman’s true method than his classic “The Methodology of Positive Economics.” His judicious and non-formulaic mixture of theory, empiricism, and history remains a classic account of how economic science can contribute to human knowledge. Friedman was never a naive positvist. His real method is that of consilience, and reaching a sophisticated reflective equilibrium of historical and theoretical understanding. It is sad that this book, with its low-tech statistics, would probably no longer pass as a Ph.d. dissertation at the University of Chicago.

Mind over Muscle or Where is Fatigue?

The old theory, taught to me in high school, is that muscles become fatigued when they run out of fuel/oxygen or they become suffused with lactic acid, an unpleasant byproduct of work. But if this is so, why do athletes almost always manage to go their fastest in the last mile of a race when their muscles should be closest to exhaustion? An article in New Scientist, (“Running on Empty,” by Rick Lovett, 20 March, 04, p.42-45, a copy is here) based on the work of Timothy Noakes and others, raises some more puzzles and offers a new theory.

If fatigue is based in the muscles then without more fuel, oxygen or less lactic acid you should not be able to improve performance. Yet, amphetamines and drugs like Ecstasy do allow athletes and clubbers to work and play harder (sometimes to dangerous effect). Measurements of the input factors also show that (absent unusual factors) fatigued muscles don’t in fact run out of critical factors.

The common sense response to these puzzles is that runners speed up in the last mile because they know it is the last mile and are willing to push themselves to their limits. Similarly, drugs fool the brain into thinking that the muscles are less fatigued than they are. If one thinks seriously about this common sense notion, as has Thomas Noakes, it provides a quite different view of fatigue than the old theory. The brain in this view is a central regulator that monitors the muscles and sends out messages of fatigue, quite possibly long before the muscles are truly spent as a sort of insurance policy. The central regulator theory doesn’t say that fuel and oxygen are unimportant only that the relation between fuel and fatigue is mediated by the brain.

The central regulator may have rational expectations. Experienced runners apparently report that the first mile of a 10k race is easier than the first mile of a 5k race. Makes no sense on the old theory but if you think about the central regulator meting out a fatigue budget in advance then everything becomes clear.

How then to improve performance? Try convincing yourself that you are running a 10k instead of a 5k (hypnosis may work). Also, Noakes suggests interval training, interspersed bouts of high intensity workouts with recovery breaks. The idea here is to the teach the central regulator that going faster won’t do you any harm.

What’s the difference between anthropology and economics?

Grant McCracken offers an object lesson in how to think about the two disciplines. Along the way he tries to explain why so many people pursue “fruitless” humanities Ph.d. degrees, with no real hope of a job on the other end. Here is his follow-up post on the same topic. His whole blog, in fact, tries to get at the differences between economics and anthropology. I am a big McCracken fan, here is his home page, which includes his on-line trilogy about modern culture.

My take: Anthropology is most likely to outperform economics when wealth maximization is not a useful proxy for utility maximization. That’s quite a broad swathe of cases. We need then to see how other values become imbued with social meaning and why they hold such an important place in the utility function. The answers to these questions are almost certainly context-dependent. Yet most useful economic theories deliberately abstract from context. For this reason, every economist should do fieldwork at some point in his or her career. A stint in government, time behind the counter at Nordstroms, or a sojourn in a third world village can all qualify. That being said, without an inquiring and curious spirit, all of these endeavors are a waste of time. The problems with economics are, to large extent, simply the personal failings of various economists.