Another reason not to be a Civil War revisionist

As if you needed one:

Although southerners rebelled against growing centralization of the federal government, they had no qualms about establishing a strong national state of their own.  Scholars have classified the Confederate central government as a form of "war socialism."  The Confederacy owned key industries, regulated prices and wages, and instituted the most far-reaching draft in North American history.  The Confederacy employed some 70,000 civilians in a massive (if poorly coordinated) bureaucracy that included thousands of tax assessors, tax collectors, and conscription agents.  The police power of the Confederate state was sometimes staggering.  To ride a train, for example, every passenger needed a special government pass…Political scientist Richard Franklin Bensel writes that "a central state as well organized and powerful as the Confederacy did not emerge until the New Deal and subsequent mobilization for World War II."

That is from John Majewski's excellent Modernizing a Slave Economy: The Economic Vision of the Confederate Nation.

One implication is that the United States kept "small government" for an artificially long period of time, due to North-South splits and the resulting inability to agree on what a larger government should be doing.

The Federal Employee Health Benefits Plan

Walton Francis has a new and very substantive book on health care policy, with the exciting title: Putting Medicare Consumers in Charge: Lessons from the FEHBP.  It starts with a simple premise:

During the last half-century, the United States has operated a half-dozen major health-care financing systems in parallel, each operating in its own world, and with only minimal attempts to observe and learn lessons in program A that could be useful in program B. 

Francis studies one of these programs, namely FEHBP, in detail.  He portrays FEHBP as "premium support" in contrast to the "defined benefit" approach of Medicare.  On top of it all are competing private insurance plans and the details of the plan you end up with are decided by competition, combined with some regulation.  I now think of FEHBP as a somewhat indirect voucher scheme, albeit with complications.  Francis argues that FEHBP is a better model for health care reform than is Medicare and that FEHBP is better for both offering diverse programs and inducing cost control.  The employee pays about a quarter of the price and FEHBP also covers many retirees, apparently with reasonable success.  Here is Wikipedia on FEHBP.  Here is the program's own home page and it does I should add touch the Cowen family.

One question I have is what FEHBP would look like when scaled up to an entire country, including to people who have never had enough human capital to work for the U.S. government.  (Here is one critique of a scaled-up FEHBP but I don't find it so convincing, at least not compared to the problems with other approaches.)  Still, this book is essential reading for anyone interested in health care policy.  I can't call it exciting, but it is a model of clarity and substance throughout.

Here is one report, from last night, that a modified version of the FEHBP idea will be substituted in for the public option.  I don't yet have reliable details on what this might mean, or who it might cover (just the people on the exchanges?) but that is why I am accelerating this post even though I do not have fully formed thoughts on FEHBP as a model for broader reform.

Addendum: Michael Tanner offers related comments.

Assorted links

1. Why do aphorisms and cynicism go together?

2. When did bank executives cash out?

3. In defense of managed care, with a pointer on median wage stagnation.

4. Chinese vs. Russian reforms.

5. Monkey language has syntax.

6. The final paragraph of the article: "But the big winner is the rabbi, a recent arrival from Brooklyn who is
working hard (against tough odds) to bring his Lubavitch movement to
Montana. He has been scouring the state for anyone who can speak
Hebrew, and is elated to have found a German shepherd he can talk to."

7. The encyclopedia of counterintuitive thought.

Condom Law: NSFW

The AIDS Healthcare Foundation is lobbying California to require the use of condoms in porn movies. Their argument is that this is an employee safety issue–like requiring workers to wear hard hats–and so should fall under the Cal/OSHA laws.

But in an op-ed at Forbes.com Alex Padilla points out that to fall under the law will require classifying porn stars as employees rather than as performers and that has surprising consequences. 

…the adult film industry would have to make every performer an employee to satisfy the California's Division of Occupational Safety and Health, better known as Cal/OSHA, laws. This would be detrimental: California's anti-discrimination laws prohibit requiring an HIV test as a condition of employment; therefore the adult film industry's current testing process, in which every performer is tested for HIV monthly, would be illegal. Nor would adult film producers be allowed to "discriminate" by refusing employment to HIV-positive performers. As a result, untested and HIV-positive performers would be able to work in the industry, raising the risks of HIV outbreaks–particularly since condom breakage or slippage can occur.

My suspicion is that the AIDS lobbyists are not really so concerned with the performers but they do want to increase condom use by the general public and they think seeing more condoms in porn movies will help with that goal.  A legitimate goal perhaps, but more likely the industry will move to Nevada or will further go online amateur.

Hat tip to Ed Lopez at Division of Labor.

Meta-list for fiction, best books of 2009

I've read through the lists of many other sources, and these are the fictional works which recur the greatest number of times, in my memory at least:

1. Lorrie Moore, A Gate at the Stairs.

2. Colum McCann, Let the Great World Spin.

3. Dan Chaon, Await Your Reply: A Novel.

4. David Small, Stitches: A Memoir.

By the way, via Literary Saloon, here is a French best books of the year list.  They pick Let the Great World Spin as the book of the year, non-fiction included.  I will be reading it soon.

My favorite works of fiction this year were the new Pamuk, Gail Hareven's The Confessions of Noa Weber, and A Happy Marriage, by Rafael Yglesias.

Online Education and the Market for Superstar Teachers

I have argued that universities will move to a superstar market for teachers in which the very best teachers use on-line instruction and TAs to teach thousands of students at many different universities.  The full online model is not here yet but I see an increasing amount of evidence for the superstar model of teaching.  At GMU some of our best teachers are being recruited by other universities with very attractive offers and some of our most highly placed students have earned their positions through excellence in teaching rather than through the more traditional route of research.

I do not think GMU is unique in this regard–my anecdotal evidence is that the market for professors is rewarding great teachers with higher wages and higher placements than in earlier years.

The online aspect, which enhances the market for superstars, is also growing.  Here from a piece on online education in Fast Company are a few nuggets on for-profit colleges which have moved online more quickly than the non-profits.

Today, for-profit colleges enroll 9% of all students, many of them in online programs. It's safe to assume they'll soon have many more….for-profits are the only sector significantly expanding enrollment — up 17% since the start of the recession in 2008….the University of Phoenix, which with 420,000 students is the largest university in North America.

Interesting explanation for why for-profits still lag:

Since there are no generally accepted measurements of learning in traditional higher education, the proxy for the value of a diploma on the job market is prestige. Rankings like those of U.S. News & World Report depend on reputation; spending per student, including spending on research; and selectivity — a measure of inputs, not outputs. On all these measures, for-profits come up short.

But how long can we expect the inability to measure to protect academia when there are big profits to be made?  Robin Hanson would argue that most of what is going on is signaling, i.e. that prestige is what is being bought and sold and not prestige as a proxy for some other measure of quality.  No doubt there is some truth to that but there are plenty of fields, dentistry, engineering, computer science where measurable quality matters as well.

It's true that the university equilibrium has lasted a long time but that doesn't mean it can't break down very quickly.

Addendum: Bryan Caplan laughs but Arnold Kling has the right idea.

Pirate credit, pirate collateral, and pirate price discrimination, in Somalia

Pirates don't even have to pay upfront. Those holding ships hostage that haven't yet received ransom can buy goods on credit — at elevated prices — and settle up their debts when the ransom money comes in, villagers say.

Here is evidence of price discrimination:

When villagers think the price of a cosmetic is too high, their reply is "we are not pirates," said Abdullahi.

The closer to the pirate dens one gets, the higher the prices go. In the nearby town of Eyl, a cup of tea costs three times as much as in Bossaso. In Eyl, pirates pay $5 for a shoeshine, compared with 50 cents in Bossaso, said Hashim Salad, a store owner.

The article is interesting through and I thank Cyril Morong for the pointer.

The power of arbitrage: ask Mr. Pickles

Enthusiasts of frequent-flier mileage have all kinds of crazy strategies for racking up credits, but few have been as quick and easy as turning coins into miles.

At least several hundred mile-junkies discovered that a free shipping offer on presidential and Native American $1 coins, sold at face value by the U.S. Mint, amounted to printing free frequent-flier miles. Mileage lovers ordered more than $1 million in coins until the Mint started identifying them and cutting them off.

Coin buyers charged the purchases, sold in boxes of 250 coins, to a credit card that offers frequent-flier mile awards, then took the shipments straight to the bank. They then used the coins they deposited to pay their credit-card bills. Their only cost: the car trip to make the deposit.

The story is interesting throughout.  There is this (unconfirmed) report:

One FlyerTalker, identified by his online moniker, Mr. Pickles, claims to have bought $800,000 in coins. He posted pictures of the loot on FlyerTalk.

He says his largest single deposit was $70,000 in $1 coins. He used several banks and numerous credit cards. He earned enough miles to put him over two million total at AMR Corp.'s American Airlines, giving him lifetime platinum-elite status — early availability of upgrades for life and other perks on American and its partners around the world. He also pumped miles into his account at UAL Corp.'s United Airlines and points into his Starwood Preferred Guest program account.

Project Cybersyn

Cybersyn was a project of the socialist government of Salvador Allende (1970-1973) and British cybernetic visionary Stafford Beer; its goal was to control the Chilean economy in real-time using computers and “cybernetic principles.”  The military regime that overthrew Allende dropped the project and probably for this reason when the project is periodically rediscovered it is often written about in a romantic tone as a revolutionary “socialist internet,” decades ahead of its time that was “destroyed” by the military because it was “too egalitarian” or because they didn’t understand it.

Although some sources at the time said the Chilean economy was “run by computer,” the project was in reality a bit of a joke especially in retrospect, albeit a rather expensive one, and about the only thing about it that worked were the ordinary Western Union telex machines spread around the country. The two computers supposedly used to run the Chilean economy were IBM 360s (or machines on that order).  These machines were no doubt very impressive to politicians and visionaries eager to use their technological might to control an economy (see picture at right.)  Today, our perspective will perhaps be somewhat different when we realize that these behemoths were far less powerful than an iPhone.  Run an economy with an iPhone?  Sorry, there is no app for that.

Indeed, you don’t have to read far between the lines of Andy “socialist internet” Beckett’s account to get a flavor of what was really going on:

Beer’s original band of disciples had been diluted by other, less idealistic scientists. There was constant friction between the two groups. Meanwhile, Beer himself started to focus on other schemes: using painters and folk singers to publicise the principles of high-tech socialism; testing his son’s electrical public-opinion meters, which never actually saw service; and even organising anchovy-fishing expeditions to earn the government some desperately needed foreign currency.

(Note the classic, ‘the visionary failed because others lacked idealism’ storyMeanwhile the visionary is off on an anchovy-fishing expedition.)

Recently, Jeremiah Axelrod and Greg Borenstein have put together an excellent video essay (fyi, 25 minutes) which gets to the heart (perhaps head would be a better word) of Cybersyn by focusing on the legendary “control room,” which they delightfully call the “inverted panopticon.”

Photograph by Gui Bonsiepe Design: Product Development Group, INTEC, Santiago de Chile. 1972/73.

 

It is no accident, say Axelrod and Borenstein, that the control room looks like the bridge of the Starship Enterprise because the whole purpose of the room was to exude a science-fiction fantasy of omniscience and omnipotence.  The fantasy naturally appealed to Allende who had the control room moved to the presidential palace just days before the coup.

The control room is like the bridge of the Starship Enterprise in another respect–both are stage sets.  Nothing about the room is real, even the computer displays on the wall are simply hand drawn slides projected from the other side with Kodak carousels.

Ironically, when rumors of the project began to circulate, the illusion of omniscience and omnipotence that Beer had created, the same illusion that so appealed to Allende and that had funded Beer’s visions and experiments, this illusion caused fear that an all-knowing big brother was on the way–and such fear may even have encouraged the coup.

After the coup, rather than destroying the project because of its “egalitarian” nature, the military regime was more likely to have been disillusioned and disappointed to discover project Cybersyn’s impotence.

Hat tip to Boing Boing.

Cato dialog on Tom Palmer’s new book

Here is a YouTube of Tom Palmer presenting his new book, with yours truly commenting, at the Cato Institute.  David Boaz summarizes part of my comment.  Here is my previous post on Tom's new book and the book, Realizing Liberty, is available for purchase on-line,  Tom points us to this podcast of him criticizing me; his comment reflects some of the differences in our points of view.

One question in the dialog was to what extent an adherence to liberty — at the level of an entire polity — is likely to be culturally specific.  I see pro-liberty ideas as more likely to be Anglo-American than Tom does or at least more northwestern European.  It is for this reason, I think, that he favors free immigration whereas I, although very pro-immigration relative to the political debate, favor legal limits in many cases, including the United States, Switzerland, and Iceland.  

A second question is to what extent ideas about liberty can be supported without encouraging "the paranoid style" in American politics.  Too often advocacy of individual liberty ends up bundled with the paranoid style of reasoning and overly simple good vs. evil narratives.  I have yet to see a good explanation for why.

Overall I am more suspicious of "ideology" than is Tom.  He sees ideology as having driven many very beneficial social movements, such as the abolition of slavery.  I accept that point but still fear that ideological reasoning is likely to end up biased away from an emphasis on abstract concepts.  That will mean ideology is often useful for ending very concrete social injustices, but that ideology is unlikely to bring people to a deep understanding of "better economics," especially when the distinction between the seen and unseen is important.  The strongest ideologies also tend to be nationalistic.

Markets in everything China contract of the day

She is now only allowed to beat him once a week:

The 32-year-old man, who was named by the Chongqing Evening News as Mr Zhang, took the unusual step after suffering intense abuse from his wife, who studies kung fu.

"I don't want to beat him, but arguments are inevitable and I can't help myself," his wife told the newspaper. She added that in the week before they signed the deal, she had beaten him up three times.

If she breaks the contract she has to return home to her parents for three days.

I thank Nathanael Minarik for the pointer.