Markets in everything, Thorstein Veblen edition

by  Tyler Cowen in

A watch that doesn’t tell time.  Oh, it costs $300,000.  And:

He added that anyone can buy a watch that tells time – only a truly discerning customer can buy one that doesn’t.

And here’s the best part: The watch sold out within 48 hours of its launch.

I thank Darren Klein for the pointer.

Addendum: I am reminded of Borges on Veblen: "When, many years ago, I happened to read this book, I thought it was a satire.  I later learned it was the first work of an illustrious sociologist."

Should smart men prefer the fiction of the past?

by  Tyler Cowen in

Razib thinks so:

I think that it is somewhat peculiar that many
of us find fiction from the past more engaging than popular
contemporary works. Aupelius’ Golden Ass gets my attention; most contemporary fiction does not.  I
am arguing here that this is partly due to the fact that in the past
those who read copiously were, on average, much more like me than they
were like the typical human. Not only were readers by and large
men (usually of some means and comfort), but they were often also
disproportionately eggheads who were eccentric by their nature. How
many elite scholars were there such as Claudius
who were not attracted to the public life of politics and do not appear
in the annals of history? With the printing press, cheaper paper, and
the rise of mass literacy, things changed, the distribution of taste shifted.  And so did the distribution of genres.

Read the whole thing.  I believe that literary "market taste" was closest to mine in the 1920s, a remarkable decade that saw the publication of major works by Proust, Mann, Joyce, Rilke, Kafka, and numerous other masterpieces.  That may be more a "spirit of the times" effect than an audience composition effect, since I prefer it to earlier and more elite periods as well.  (Or maybe only by then did fiction get dumbed down to my level!)

When it comes to Roman literature there is also a significant selection effect, namely what later manuscript collectors thought was worth preserving and protecting.  Many novels were written during Roman times, but not many of them have come down to us and thus the average quality of Roman literature may look artificially high, just as the average quality of today’s literary menagerie looks artificially low.

Charles Tilly dies at 78

by  Tyler Cowen in

Here is one obituary.  Tilly was a historical sociologist but he had an influence on economic history as well, including the New Institutional Economics:

Dr. Tilly mined immense piles of original documents for raw data and
contemporary accounts – including municipal archives, unpublished
letters and diaries – that he used to develop theories applicable to
many contexts. A particular interest was the development of the nation
state in Europe, which he suggested was partly a military innovation.
In his 1990 book “Coercion, Capital, and European States, AD 990-1990”
(Blackwell), he argued that the increasingly large costs of gunpowder
and large armies required big, powerful nation states with the power to
tax.

In 1985, he gave early indications of his argument that war
made states in an article that said nation states, with their
monopolies on violence, function like gangsters’ protection rackets. He
said that governments emphasize, create and stimulate external threats,
then ask their citizens to pay for defense.

I think of his mid-career work as being most important, such as his The Formation of National States in Western Europe.  In any case America has lost one of its leading social scientists.  Wikipedia offers good links.  Here is Tilly on how to do social science work, recommended.

Make dentistry cheaper

by  Tyler Cowen in

Can you see what is coming?:

But to the Alaska Dental Society and the American Dental Association, the clinic is a place where the rules of dentistry are flouted daily. The dental groups object not because of any evidence that the clinic provides substandard care, but because it is run by Aurora Johnson, who is not a dentist. After two years of training in a program unique to Alaska, Ms. Johnson performs basic dental work like drilling and filling cavities.

Here is much more.  Get this:

The number of dentists in the United States has been roughly flat since 1990 and is forecast to decline over the next decade. A study last year from the Centers for Disease Control showed that Americans’ dental health was worsening for the first time since statistics began to be kept.

In Alaska, the A.D.A. and the state’s dental society had filed a lawsuit to block the program that trained people like Ms. Johnson, who are called dental therapists. The groups dropped the suit last summer after a state court judge issued a ruling critical of the dentists. But the A.D.A. continues to oppose allowing therapists to operate anywhere in the lower 49 states. Currently, therapists are allowed to practice only in Alaska, and only on Alaska Natives.

The opposition to therapists follows decades of efforts by state dental boards, which are dominated by dentists, to block hygienists from providing care without being supervised by dentists.

The dental associations say they simply want to be sure that patients do not receive substandard care. But some dentists in public health programs contend that dentists in private practice consider therapists low-cost competition. In Alaska, the federally financed program that supplies care to Alaska Natives pays therapists about $60,000 a year, one-half to one-third of what dentists typically earn.

The Alaska program is small, with fewer than a dozen therapists practicing so far. But the early results are promising, according to dental health experts who are studying the program.

As someone who has spent a lot of time at the dentist, I very much like the assistants and I think of the dentist himself as a kind of middle-level manager and salesman.

I thank Greg Rehmke for the pointer.

Eminent Domain and Civil Rights

by  Alex Tabarrok in

“[t]he burden of eminent domain has and will continue to fall disproportionately
upon racial and ethnic minorities, the elderly, and economically disadvantaged.”
Unfettered eminent domain authority, the NAACP concluded, is a “license for
government to coerce individuals on behalf of society’s strongest interests.”

That is the NAACP quoted in an op-ed by David Beito and GMU law prof Ilya Somin. 

Hat tip to The Beacon.

Exporting Electrons

by  Alex Tabarrok in

Everyone knows that Caterpillar is an exporter.  But last week Google reported record profits and Google stock rose nearly twenty percent.  Why were profits up?  Google’s foreign revenues shot head of its U.S. revenues because of a weaker dollar.  Google is an exporter.  Who knew?  And what does Google export?  Patterns of electrons.

Thanks to David Levy for discussion.

How to behave when you’re old

by  Tyler Cowen in

Bryan Caplan presents us with his dilemma:

When I’m old, I want to be the octogenarian that the Young Turks
come to with their crazy new ideas. I don’t want to be the senior
professor that the whippersnapper assistant profs avoid. Above all
else, I never want to be a lunch tax – I like lunch too much.

Unfortunately, by the time I’m 80 I’ll probably be too befuddled to
figure out how to do any of this. So I want to figure it out now, tape
it on my office wall, and refer to it when the time is ripe.

…Not mentioning any names, what
are the biggest social mistakes elderly faculty make? What are some
simple strategies for them to ingratiate themselves to the next
generation? If you’ve got some good advice, I’ll thank you when I’m 80.
If I remember!

I remain a fan of Richard Posner’s book on old age, one of his best.  I ask Bryan: would he still take the advice that his 12-year-old self might have taped to a door?  Neurological changes aside, the elderly simply have less incentive to be deferential and to court their younger colleagues; Aristotle knew this too.

Bryan’s best lunchtime bet is that, when he is eighty, I am still around at ninety.

An alternative strategy is to find — today — the eighty-year olds who are still fascinating and run your new ideas by them.  Most of them will gladly receive you.  I used to fly out to Ann Arbor occasionally to meet with the great Marvin Becker, but in general I haven’t done much of this in my life.  Call that my failing but it’s another reason why so many eighty-year-olds don’t bother to appeal to Young Turks as a constituency.

Overall I am struck by how little beneficial trade there is between the generations.  I find this one of the most striking stylized facts of the social sciences; one simple model is that people don’t want to leave groups that produce fun and high relative status for them, and that is what switching across the generations usually entails.

Do you all have any other advice for Bryan?

Sentences of interest

by  Tyler Cowen in

The libertarian point is that the illegality and attendant marginalization of polygamy pushes it into isolated, authoritarian, quasi-state cult compounds where these kinds of crimes are most likely to take place.

That’s Will Wilkinson and the point reminds me of recent party debates on drug legalization.  I don’t mind legalizing polygamy (though I disapprove of the practice), but would such legalization prevent an FLDS type of episode?  Maybe the goals of the perpetrators are rape, abuse, and power-mad intimidation, rather than polygamy per se ("polygamy: merely a means to an end.")  In that case polygamy legalization won’t limit their ability to set up isolated, authoritarian, quasi-state cult compounds for their nefarious purposes. 

Alternatively, if illicit polygamy is a marketing point that draws people to the compound in the first place, legalization may well help.  Oddly legalization helps most when the religious belief (in polygamy) is relatively sincere and the abuse accumulates through evolutionary processes of increasingly bestial behavior; legalization helps least when the religious belief in polygamy is for cynical reasons of control and could easily be replaced by some other marketing point.

Limited Liability

by  Alex Tabarrok in

“The limited liability corporation is the greatest single discovery of modern times. Even steam and electricity are less important than the limited liability company”.

Professor Butler President of Columbia University, 1911.

"This limited liability corporation is the bedrock of the market economy…And what do we, the citizenry, get in return for this generous public grant of limited liability? Originally, we told the corporation what to do. You are to deliver the goods and then go out of business. And then let humans live our lives. But corporations gained power, broke through democratic controls, and now roam around the world inflicting unspeakable damage on the earth."

Russell Mokhiber and Robert Weissman, Mother Jones 1999

What’s a New York Times ad worth for a book?

by  Tyler Cowen in

Dani Rodrik tries an experiment:

Princeton University Press ran a small ad for my book last Sunday in the New York Times book review. I was curious if it would have any effect on sales, so I ran a little experiment.  I checked the book’s sales ranking in amazon.com at periodic intervals starting on Saturday afternoon.

But the ad didn’t matter so much (see also the comments on the post).  I would note a few points of speculation:

1. Below the top tier, a book can rise rapidly through the Amazon rankings without selling so many extra copies.

2. Amazon buyers are better educated and not representative of the market as a whole.

3. It is an open question whether the Amazon rankings are "honest," or strategically designed to sell what is hot at the moment, by making it look especially hot.

4. The best question to ask is: Is your book in Wal-Mart and Costco?

5. The next best metric is to check its location in Barnes and Noble.

6. Success of a book in Borders is less representative of overall success than it used to be; Borders (which is on the verge of going under, I might add) is now closer to an "indie" book store in many ways than it is to B&N.

Addendum: Chug writes in the comments: "display ads for books are not to sell books. they are for good relations between the publisher and the author…."

The McCain health care plan

by  Tyler Cowen in

Mr. McCain’s health plan centers on eliminating the tax breaks for
employers who provide health insurance for their workers – a marked
departure from the current system – and giving $5,000 tax credits to
families to buy their own insurance. His goal in shifting from
employer-based coverage to having people buy their own policies is to
encourage competition and choice, and to drive down the costs of health
insurance.

Here is more.  Portability is good but so many of the uninsured families do not pay $5000 in taxes.  Will this boil down to a subsidy to those who don’t need it or to health insurance vouchers?  InTrade says there is a 39.6 percent chance we will find out.  And here is some vagueness:

Mr. McCain proposed that the federal government work with the states to
cover those who cannot find insurance on the open market. With federal
financial assistance, states would be encouraged to create high-risk
pools that would contract with insurers to cover consumers who have
been rejected on the open market.

Here is more detail; in part it sounds like revived HillaryCare (part I), but only for the high-risk cases rather than for the entire population.  The "notches" problem is obvious as people at the relevant margin hold out for the subsidized pool, thereby making the pool size larger and larger.

McCain also emphasizes lifestyle as a factor behind health; that’s empirically important — more so than health care — but after cutting various stupid subsidies the government should not be the main driver there.  Megan McArdle comments overall.

Trade aside, so far I’ve yet to see many actual policy proposals from the McCain camp.  Mostly I’ve seen attempts to signal that they won’t do anything too offensive to the party’s right wing.  Very few of these trial balloons seem to be ideas that McCain had expressed much previous loyalty to.  I don’t even think we should be analyzing these statements as policy proposals.  We should be wondering why the Republican Party has given up on the idea of policy proposals.