Spent: Sex, Evolution, and Consumer Behavior

by  Tyler Cowen in

That's the new book by Geoffrey Miller, of The Mating Mind fame.  The exposition is a bit of a sprawling mess but the best pages of content are fascinating.  I recommend it and I am glad that I started reading it the moment I got my hands on it.

The core thesis is the Veblenesque point that marketing plays upon our weaknesses as evolved, biological creatures, obsessed with signaling:

From my perspective as an evolutionary psychologist, this is how consumerist capitalism really works: it makes us forget our natural adaptations for showing off desirable fitness-related traits.  It deludes us into thinking that artificial products work much better than they really do for showing off these traits.  It confuses us about the traits we are trying to display by harping on vague terms at the wrong levels of description (wealth, status, taste), and by obfuscating the most stable, heritable, and predictive traits discovered by individual differences research.  It hints coyly at the possible status and sexual payoffs for buying and displaying premium products, but refuses to make such claims explicit, lest consumer watchdogs find those claims empirically false, and lest significant others get upset by the personal motives they reveal.  The net result could be called the fundamental consumerist delusion — that other people care more about the artificial products you display through consumerist spending than about the natural traits you display through normal conversation, cooperation, and cuddling.

I very much agree.  Miller also tells us that we can do better and offers us some (non-regulatory) proposals for lowering the cost of our signaling.  (Don't buy a luxury car!)  Would it be cheaper and more effective to wear credible, verifiable tattoos of our personality types from the six-factor model?

I'll be considering more from this book soon.

Is it wrong to buy sex?

by  Tyler Cowen in

The Intelligence Squared debate is now on YouTube.  If you will recall, Lionel Tiger and the Mayflower Madam were on my side, against Wendy Shalit, Catherine Mackinnon, and Melissa Farley.  They won and you will find Alex's interpretation here.  A few observations:

1. Catherine Mackinnon's closer was I thought the single best speech in the debate.

2. I was very pleased to have met and chatted with Wendy Shalit, as we hit it off very well; you'll find her books here.

3. I believed throughout that it would hurt my side of the debate to suggest that men would enjoy the experience of buying sex; the sociology of that fact is itself interesting.

4. During Q&A I was asked whether a woman raped at a very young age can later be said to have exercised autonomous choice in her decision to become a prostitute.  The premise of the question was "obviously not" but is it so simple?  Does everyone who was once a helpless victim, in a terrible way, lose autonomy?  The implications of that world view frighten me.

5. Legalization advocates still could use a better account of why this market, even when it is legal or quasi-legal, seems so prone to abuse.

The game theory of Arlen Specter

by  Tyler Cowen in

Will writes:

My quick take is that this sucks, because the more choke points in the policymaking process the better. That said, it probably doesn’t change all that much unless Senate Dems can muster reliable intraparty unanimity. A few things that wouldn’t have passed will, and those could be an important few things, but most final votes won’t be different. The one way this hurts the Dems is that it makes a narrative of GOP obstruction less plausible, and if various things go south by the mid-terms, the Republicans can more plausibly say that all of it’s the other guy’s fault.

If the guy is willing to switch parties, he was already in the first place willing to switch policies (if indeed he needed to change his mind at all).  He's suddenly lost of a lot of bargaining power (he had to hold off Pat Toomey, who presumably would have beaten him in the primary) and some of that power has been redistributed to the most conservative Democrats in the coalition.  That could be an improvement.

Note also that Democratic Senators may find it harder to oppose Obama once a policy initiative is announced, so they may work harder behind the scenes, and well in advance, to shape legislation in their preferred directions or simply just kill it off.  In contrast, a Republican veto-voice will be more reactive ex post.

On the marketing side, maybe now the Republicans, being denied the filibuster, will have to come up with some ideas that are actually appealing to voters outside their core constituencies. 

Addendum: Here is Matt's analysis.  And here is the academic evidence that voting behavior changes, following a party switch.

The brighter side, sort of

by  Tyler Cowen in

Why is the death rate higher in Mexico?  Maybe it isn't:

Of the 110 million people in Mexico, 1,600 cases have been reported, with about 100 deaths–suggesting a mortality rate of 6 percent. This is almost certainly bad math, as the total case count almost certainly ignores thousands or tens of thousands of other cases that have taken milder courses like those in the United States. It's perfectly conceivable Mexico has actually had 10,000 or 100,000 cases–or even 1 million cases. If so, then the kill rate would be not 6 percent but 0.1 percent (given 10,000 cases) or 0.01 percent (given 100,000 cases). If it's 1 million cases (quite possible if this thing really spreads easily) then the mortality rate is just 1 in 10,000. Meanwhile, because the United States is on high alert–and can take special note of people with recent travel to Mexico–it is probably picking up a fairly high percentage of its cases, including milder instances that would have gone unnoticed in Mexico a few weeks ago.

…For one thing, it's also possible that Mexico is missing, undercounting, or badly underreporting deaths. But if this virus really does spread rapidly, its kill rate is fairly low; and if its kill rate is anywhere near as high as the 100-out-of-1,600 suggests, then it doesn't spread very easily.

Here is the full article.

Addendum: Have the first U.S. deaths arrived?

One economist’s perspective on the law and economics movement

by  Tyler Cowen in

In this piece, from a CrookedTimber symposium, I stress that market-oriented economists are culturally and intellectually quite different from their counterparts in the legal side of academia:

One topic which interests me is how the “conservative” law and economics movement, as it is found in legal academia, differs from “market-oriented” economics, as it is found in the economics profession. The “right wing” economist and legal scholar will agree on many issues but you also will find fundamental variations in their temperament and political stances.

Market-oriented economists tend to be libertarian and it is rare that they have much respect for the U.S. Constitution beyond the pragmatic level. The common view is that while a constitution may be better than the alternatives, it is political incentives which really matter. James M. Buchanan’s program for a “constitutional economics” never quite took off and insofar as it did it has led to the analytic deconstruction of constitutions rather than their glorification. It isn’t hard to find libertarian economists who take “reductionist” views of constitutions and trumpet them loudly.

I also discuss my experiences teaching at GMU Law, why the law and economics movement grew so rapidly, and why the initially conservative nature of that movement is more or less over.  Read the whole thing.

TED interviews Tabarrok

by  Alex Tabarrok in

Following up on my TED talk, is this interview with Matthew Trost.  We cover whether limited natural resources are a constraint on growth, the Lebensraum fallacy, The Wire, the tragedy of the commons and other topics.  Here's one bit on growth and democracy in the context of China and India.

A lot of people say that India has been held back by its democracy. But let’s remember that despite being a poor country India’s democracy meant that its government never let millions of people starve. No politician wants to starve potential voters. In the long run, I think India is going to benefit from its democracy and not be harmed by it. Democracy is, in a sense, like markets. It provides information and feedback, it leads to a more open system and it constrains government from the worst kinds of abuses. I think that the more China proceeds along the wealth path, the more difficult they will find it not to have a democracy.

Keynes’s *General Theory*, chapter eleven

by  Tyler Cowen in

This chapter is a wild ride, often verging on incoherence but sometimes falling into brilliance.  In any case it is hard to follow.

The first page or two of this chapter presages Tobin's "q theory" and the notion that differential rates of return determine additions to the capital stock (or lack thereof).  The theory of irreversible investment, and the corresponding notion of option value, has made q theory obsolete although not in a way which damaged Keynesian theory.  Quite the contrary.

The end of section i notes that the rate of interest, as used to evaluate capitalized streams of future income, has to come in part from outside the market for capital goods themselves.  This whole section will make more sense once you've read the notorious chapter 17.  Maybe the claims are true as stated in this chapter (all relations are those of general equilibrium in the final analysis), but what Keynes actually meant here is not so obviously true.  He is hinting at the notion that a liquidity trap can halt new investment and that the rate of return on money can "rule the roost."  When and whether this can be true is a central question for contemporary macro and we will return to it.

Parts of section ii hint at the later "reswitching" debates in capital theory and in this section Keynes is drawing upon Irving Fisher's notes on the problem.  He's again getting at the claim that a purely "real" (non-monetary), partial equilibrium theory of interest won't carry much explanatory power.  I don't think he is wielding the right weapon here.

Section iii pokes a hole in the Fisher Effect.  Keynes points out that if expectations of inflation induce a higher nominal interest rate, why don't those same expectations cause prices to go up now?  This adjustment, by the way, would eliminate the nominal premium on the rate of interest.  This simple yet powerful point doesn't get the attention it ought to.  Storage costs for goods and services may eliminate this paradox but perhaps not completely.  It is striking how few economists have thought this problem through.

The chapter ends with a blizzard of arguments about the importance of expectations.

Whew!  Overall this chapter supports my view that Keynes was obsessed with capital theory and had deep ideas on the topic.  But in terms of understanding the overall argument of the GT, if you can follow chapter 17 (ha), you needn't worry too much about all the difficult arguments and passages here.

Against torture prosecution

by  Tyler Cowen in

At many blogs (Sullivan, Yglesias, DeLong, among others) you will find ongoing arguments for prosecuting the torturers who ran our government for a while.  I am in agreement with the moral stance of these critics but I don't agree with their practical conclusions.  I believe that a full investigation would lead the U.S. public to, ultimately, side with torture, side with the torturers, and side against the prosecutors.  That's why we can't proceed and Obama probably understands that.  If another attack happened this would be all the more true.

On top of everything else, major Democrats in Congress are likely complicit and the Democrats as a whole hardly made this a campaign issue in 2004; in 2008 the economy was their winning issue, not torture.

One of the excellent students in my Law and Literature class wrote the following sentence in his final paper:

In some of the books, and almost all of the movies we have seen that the law goes as far as people are willing to support it.

That sad truth is another cost of the practice of torture.  The American public, now having affiliated itself with torture, will be reluctant to condemn torture for some time to come.  The "endowment effect" here seems to be strong.

An acquittal or mistrial would lose the chunk of world opinion that Obama has been winning back.  And a trial might prompt another terrorist attack, if only to force acquittal and make America look bad once again.

Pushing for prosecution would more likely endanger rule of law than preserve it, which is a sorry state of affairs.

Addendum: Here is more from Matt Yglesias.

Sentences to ponder

by  Tyler Cowen in

Cities that instituted quarantine, school closings, bans on public
gatherings and other such procedures early in the epidemic had peak
death rates 30 percent to 50 percent lower than those that did not.

That is from a study of the pandemic of 1918-1919 and here is more, from 2007.  The best place to follow what is going on in Mexico — where such restrictions are now common — is ElUniversal.  People in Mexico are dying of the flu every day; what is the chance that only the benign version of the virus crosses the border?

Are you hot?

by  Alex Tabarrok in

Ever since the 2003 outbreak of SARS, or severe acute respiratory syndrome, Hong Kong has used infrared scanners to measure the facial temperatures of all arrivals at its airport and at its border crossings with mainland China.

The NYTimes reporting on how Hong Kong is probably better prepared than any other place in the world for a flu pandemic.

Hat tip to Monique van Hoek.