Doomsday scenarios collide!

Oil and gas will run out too fast for doomsday global warming scenarios to materialise, according to a controversial analysis presented this week at the University of Uppsala in Sweden. The authors warn that all the fuel will be burnt before there is enough carbon dioxide in the atmosphere to realise predictions of melting ice caps and searing temperatures.

The full story is from The New Scientist.

Torts and Crimes in Mississippi

Tyler noted how the rotten court system in Jefferson County Mississippi is finally being investigated by the FBI. At the heart of the investigation are contributions by lawyers to elected judges. It also doesn’t help that Jefferson has a large and poor minority-population. See the links for why this is important. Email me if you want copies of the papers and don’t have a subscription to the journals.

The economics of classical music

A search on Amazon.com yielded 276 distinct performances of Beethoven’s 5th symphony, many at bargain prices. Attendance at classical concerts is steady or slightly up. The classical share of the CD market is roughly constant at 3 to 5 percent. On the other hand, many orchestras are experiencing financial difficulties, and some are closing.

Complaints about the economic fate of classical music have been common for many decades. In fact parts of the 1980s and 1990s — not long ago — were a financial golden age for the classics, driven by The Three Tenors, Gorecki, and replacing albums with CDs. The entire story comes from the Federal Reserve Bank of Boston, click here.

In my view, the biggest single dilemma is whether the next generation of philanthropists will have any loyalty to classical music institutions.

How about classical music on the radio?

Classical music stations have disappeared in many cities; one-third of the nation’s top 100 radio markets do not have a classical station. After 63 years, ChevronTexaco’s radio broadcast from the Metropolitan Opera House will be off the air next year.

I suspect that the future of classical music on the radio lies in satellite radio, read this article from today’s Washington Post. XM satellite radio has about one million subscribers and its classical stations are excellent, long pieces with high sound quality, not just another rendition of a Telemann shortie or a Boccherini guitar quintet.

Thanks to William Sjostrom for the pointer to the article.

Addendum: Kevin Brancato tells us that fewer than one percent of American symphony orchestras have gone bankrupt in recent years.

Most Amish kids have cell phones

At least once they turn sixteen, or so I learned from the recent DVD release The Devil’s Playground, a 77-minute award-winning documentary, which I rented at my local Hollywood video. An Amish ritual called “rumspringa” (“running around,” note that the link shows, among other things, Amish youth drinking beer) allows youths to sample the previously forbidden delights of the outside world to their heart’s content. At this age Amish youth start having wild parties (organized by cell phone), premarital sex, and often hard drugs as well. The Amish elders believe that the youth must be allowed to sow their wild oats, if they are ever to become good Amish later. One Amazon.com reviewer wrote:

I was not prepared to see a trailer full of Amish teens drugged up to their eyeballs right on Amish land. The Amish Rumspringa teens careen around and throw such wild parties that people come from all over America to attend. Apparently, it is well known (except by me) that “Amish kids have the best parties.”

Ninety percent of Amish youth later decide to join the church and give up such wanton ways. Never before in history has a higher percentage of the Amish remained in the fold.

Muzak

It’s not surprising that background music can have a significant effect on how people shop (fast versus slow has the expected effect on shopping and dining time, for example). I am amazed, however, that the style of music can affect what people buy. British researcher Adrian North (includes many abstracts of North’s music research) and colleagues split up a wine shelf into French and German wines. On alternate days they played French and German music.

When the tape deck wafted French accordion tunes down the aisle, shoppers bought a total of 40 French wines and only eight German wines. On days when the pounding beat of a German oompah band greeted shoppers, they bought only 12 French wines but 22 bottles of German wine.

The economic importance of glass

Without glass:

…there can be no light switch, for there is no glass for the light bulb…There are no contact lenses or spectacles to help us.
There is no clear mirror in the bathroom to shave by, no bottles of ointment or glass for our toothbrush. There is no television in the living room, for with no screen it cannot exist. When we look out of the windows we see no cars, buses, trains or aeroplanes, for without windscreens none of them can operate (and they almost certainly have not been developed anyway). The shops in town have no window displays…
…There would almost certainly be no electricity, since its first generation depended on gas or steam turbines, which required glass for their development…Our fields would produce less than one twentieth of their current yield without the fertilisers discovered by chemists using glass tools…Telescopes, microscopes and spectacles let us see the distant and the near in ways which the human eye unaided cannot do.

From The Glass Bathyscaphe, by Alan Macfarlane and Gerry Martin (these links on the authors are more interesting than usual), a distinguished historian and an industrial expert on glass, note that Martin is also Macfarlane’s patron.

The authors examine twenty critical experiments that changed our world, chosen at random, fifteen of them could not have been performed without glass. For largely accidental reasons, glass manufacture was rising in the West while it was declining in China, Japan, and the Islamic world. Better use of glass, and better science, led to a spiral of technological improvements that enabled the rise of modern science and the Industrial Revolution. Here is a short summary article by Macfarlane.

The authors offer an on-line essay on glass in India. Here are some film clips on the importance of glass in history. Here are press reviews of the book. The authors are properly subtle and qualify their thesis in the required ways, the book is also well-written and entertaining, recommended reading.

What goes around, comes around

The FBI is investigating Jefferson County in southwestern Mississippi, a poor area with fewer than 10,000 residents. Apparently the county is known for its very high tort settlments. For instance, when the makers of fen-phen were sued, the five plaintiffs from that county received $150 million. The 800 other fen-phen cases received a total of about $400 million.

One source notes:

Since 1995, lawyers say, Mississippi juries have returned at least 19 verdicts of $9 million or more, including 5 that exceeded $100 million each, although plaintiffs sometimes settle for less as the appeal process proceeds. Lawyers seek clients through aggressive advertising.

Mississippi state now has limited suit rewards by law, but there remain many cases filed before the relevant deadline for this limitation. One settlement recipient remarked that juries “awarded these people this money because they felt as if they were going to get a cut off of it.”

The above link offers this jaw-dropping fact:

Jefferson, with 9,740 residents, is a small county, but litigation there is a big business. An affidavit filed in June by a researcher in one case, who combed the files of the Circuit Court, said that more than 21,000 people were plaintiffs in Jefferson County from 1995 to 2000.

The possible corruption runs deep:

Bankston Drug Store, the only pharmacy in Jefferson County, has been named in hundreds of suits since the fen-phen settlements as a way for mass claims to be filed in the county.

Hilda Bankston, the pharmacy’s former owner, was subpoenaed earlier this year by the same grand jury that indicted…the others.

Bankston was asked to turn over, along with customers’ personal and prescription histories, customer and pharmacy records “that appear to be false or not produced by your company.”

Something is rotten in the state of Denmark, as they say.

Organ trafficking

I learned the following today:

1. Most sales of body organs involve kidneys.

2. Patients who receive a kidney from a living donor have a much better chance of surviving.

3. In the developing world the going rate for a kidney is between $1000 and $2000.

4. In the Philippines there is essentially a free market in bodily organs. The “grey market” is growing rapidly in many countries.

5. Two different studies suggest that kidney sellers do not benefit in the long run. Most sellers pay off debts with the money, and end up back in debt, their acts of desperation do not succeed. Many end up with long-run health problems, or can no longer perform heavy labor.

From this week’s New York Review of Books (electronic subscription required), “The Organ Market,” by Sheila and David Rothman. The authors are involved with an “organ watch” movement, which seeks to stop organ sales abuses.

My take: I can believe the “behavioral irrationality” argument that most kidney sellers do not benefit very much, if at all. But the Rothman piece never tries to estimate how many lives are saved by the practice. Furthermore, many of the selling “victims” might have performed some other desperate act instead. So the organ selling idea, although repugnant to many people, in my mind remains in the running as a serious policy proposal.

There is a moral hazard problem, namely hospitals and doctors may take kidneys from people when they shouldn’t. Or a hospital or doctor may let a patient die, to harvest the kidneys. Are more lives lost through the moral hazard problem than are saved through the kidney sales? I doubt it. Do the kidney buyers benefit more than the kidney sellers lose? Probably.

Utilitarian calculations are not the only value at stake here, but so far they point toward allowing organ sales. The best argument against is to cite the likelihood of accompanying rights violations, which are real, and claim that such a factor outweighs the utilitarian benefits of the practice.

Addendum: On point number two, the authors write: “patients who receive an organ from a living donor have far better prospects than those who receive an organ from a cadaver.” Co-blogger Alex sends me the following link, which shows a correlation of about ten percentage points more of survival, if you receive an organ from a living donor, the causal relationship may be weaker, given the differing ages of various recipients. Alex wonders if allowing kidney demanders to “buy from the dead” would reduce the problems of sale from the living. This is a good point, but I am not sure it eliminates the basic problem. First, sales from the dead may not displace sales from the living; I cannot determine whether the Philippines (not to mention other locales) restricts sales from the dead but it is not obvious that such differential restrictions exist. Second, many of the buyers are relatively wealthy. If a “live kidney” raises the chance of survival by only a single percentage point, they may still pay for that, which would continue to prop up the market in kidneys from the living. Kidney middlemen may find it easier, and more profitable, to buy from the living for a thousand or two, rather than pursue cadavers, where the quality of the kidney is presumably harder to determine.

Should libertarian economists vote Democrat?

Jeffrey Frankel, a member of President Clinton’s CEA, charges (Milken Institute Review, registration required) that:

When it comes to economic policy, Republican and Democratic administrations have switched places since the 1960s. The Republicans, who were so long identified with free markets and less-is-more government, have become the party of fiscal profligacy and market intervention. Democratic presidents have (by comparison) become the agents of fiscal responsibility and arms-length microeconomic policies.

Robert Ekelund and Mark Thornton have a rebuttal in the latest issue of the MIR (3rd quarter, 2003) but it’s a strange “rebuttal” that begins:

We certainly agree with Jeff Frankel (Milken Institute Review, 1st Quarter 2003) that the “Republicans have become the party of fiscal irresponsibility, trade restriction, big government and failing-grade microeconomics.” However, we would argue that there is less mystery to this exchange of economic platforms with the Democrats than meets the eye. The Republican Party was established in the 19th century as a party of big government and economic intervention.

For my take see my earlier post, The Beast Isn’t Starving.

Manufacturing fallacies

Some fallacies just keep coming back no matter how many times they have been exploded. Jobs in the manufacturing sector are disappearing and have been doing so for 30 years. The reason this has occured, however, is not because we have “sent the good jobs overseas” and it is not because our manufacturing sector is “rusting.” Jobs have disappeared because the manufacturing sector has been spectaculary successful. When measured in terms of what ultimately matters, output, the U.S. manufacturing sector has more than doubled in size over the past 30 years. We are now producing more “stuff” than virtually ever before and because of productivity improvements we are doing it with less labor. The graph below from The Economist is for the G7 countries, not just the U.S., but it conveys the correct idea. (For the US data see Robert Hall’s recent testimony before Congress).

“Job destruction” is a vital aspect of progress. If we had not destroyed millions of farm jobs most of us would still be working in agriculture today.
manufacturing.gif

Franco Modigliani, in memory

Nobel Laureate Modigliani passed away several days ago. Read this tribute, which explains Modigliani’s views on religion, his flight from the Mussolini regime as a boy, and his opposition to Berlusconi. Here is one of the more personal bits:

When I saw the holes in his socks I liked and admired him even more. I thought, here is a man who doesn’t give a damn about appearance; someone who is all meat, no smoke.

Is “dollar pessimism” justified?

Brad DeLong reproduces and responds to a well-reasoned critique of the pessimistic view that he and Paul Krugman share about the prospects for the American dollar.

The main point of the critique:

These authors–and the conventional wisdom generally–miss two, closely related points. First, foreign investors’ risk exposure to dollar assets has essentially nothing to do with the current account deficit. Second, the ability of U.S. households, firms, and the government to service their liabilities has essentially nothing to do with whether those liabilities are owed to foreign or domestic investors.

Click on the link to read Brad’s response, it is not easily summarized.

My take: Given the composition of my assets, my implicit position in the dollar market is long, but probably more because of inertia than anything else.

This link will keep you busy for a long time

“The philosophers have only interpreted the world, the point, however, is to change it.” So said Karl Marx. Economists Ian Ayres and Barry Nalebuff agree, though not in a way that Marx would have imagined. Their new book: Why Not: How to Use Everyday Ingenuity to Solve Problems Big and Small offers their ideas on how to make the world a better place.

How do you feel about brake lights that indicate how fast you are decelerating?

Or how about “animal repelling devices”?

…[there are] a disturbing number of dead animals along [the road]. I personally did everything in my power to avoid hitting anything (there is a racoon on US301 that owes me his life since I nearly lost mine!) So I spent a lot of time thinking about it. Maybe a device that would be like a license plate on the front bumber, emitting ultrasonic sounds and infrared light? Wild colors, loud sounds, & flashing lights might displace the animals from the road area until things quieted down.

The new idea I need least: Movie titles at the end of movies, so you know what you just watched on TV.

The new idea I need most: A special signal for when your car is making a U-Turn.

The authors also want to offer Palestinians stock in Israeli companies, in return for a peace settlement. Here is a pre-publication New York Times review, which refers to “Daredevil Ideas from the Anti Dilberts.”

And sorry Barry, but I have to vote “no” on “colored salt,” I don’t care how bad my eyes get.

Does Hollywood like the free market?

Read this interesting paper by law professor Larry Ribstein, link courtesy of Ben Muse and ProfessorBainbridge.com. The question is why so many movies appear to be so anti-business. A money quote:

This article seeks to provide a plausible explanation of films’ bias against capital. It is not business itself that filmmakers do not like, but the capitalists who control it. This may sound like Communism, but it is not the classic view of the struggle between capital and labor. Filmmakers display little concern with the problems of the workingman, and they do not usually blame firms’ social irresponsibility on the fact that capital rather than labor is in control. Rather, the filmmakers’ main problem with capital being in control seems to be that the filmmakers are not. The “workers” that are oppressed are often creative types, and middle managers who stand in for them, who are being denied adequate opportunity to display their creativity. The point of displaying the evil that firms do seems not to stop it, but to show how much we need the artists and seekers among us to do the finding…

We are told that as technology lowers costs, and moviemakers become less dependent on capitalists, the problem will diminish. If this is true, drama should be less anti-capitalist than costly special effects spectaculars. I am not sure I buy this, but the paper nonetheless makes for interesting reading. For an alternative perspective, see my earlier post on movies for entrepreneurs.