Speaking in rural West Bengal
1. My hosts retitled my lecture "Globalization Destroying the World Culture."
2. I arrived on time but the talk started over ninety minutes late. Even after the midpoint of the talk, more people were filing in.
3. I was put on a dais at least twelve feet high. A large purple, gold, and pink ribbon was pinned on me, perhaps to indicate I was the speaker.
4. Everyone listened with absolutely rapt attention, but it seemed only the communists understood much English.
5. Those same communists were greatly agitated about American world hegemony and the onset of "Hollywood lesbianism" in India.
6. Before speaking I was fed a delicious fish and shrimp curry in Bengali mustard sauce.
Indira Gandhi after twenty years
The Indian magazine The Week (Nov.7 issue) polled 1,274 people in ten cities, and found that Indira Gandhi remains a political idol.
69 percent of the people wish they could vote for her today.
54 percent believe that she would go to war with Pakistan over Kashmir.
47 percent approve of "The Emergency," her suspension of civil liberties; only 38 percent oppose it.
67 percent believe that the Nehru-Gandhi family should be in politics.
Indira’s two greatest achievements are seen as victory in the 1971 Indo-Pak war and nationalizing the banking system.
Here is my previous post entitled "Are Indian Voters Irrational?"
My question: Does Karl Rove understand Indian politics better than we think?
Miss Digital World
Is Hollywood encroaching on Bollywood?
I’ve seen statistics that domestically produced films capture up to 95 percent of the Indian home market. While I’ve always doubted the veracity of the numbers, there is no doubt that most Indians prefer Indian movies. But might this change in the foreseeable future?
I see two reasons to be (relatively) pessimistic about Bollywood. First, theaters in the wealthier suburbs show a higher percentage of Hollywood movies. A look at the Delhi movie pages showed an English language presence of about one-third, although one of these movies (the fun Bride and Prejudice) was Indian in its cast and partly in style. Removing that movie would bring the total Hollywood presence down to about a quarter.
If India continues to develop, the Hollywood style might find greater favor with the new middle class. It is in the rural areas where Indian films capture the entire market, and of course development brings urbanization.
Second, movie traditions based upon music usually protect their home markets well against foreign competition. Musicals don’t travel well abroad, and the production of music has long been more decentralized than the production of film. But for how long will Indian film remain a dominant means of marketing Indian music? Won’t radio, cassette players, CDs, MP3s, and other innovations capture an increasing share of the music market in India? (Recall that in the U.S. movies often generated hit songs forty years ago, today they hardly ever do.) And if music becomes less central to Indian movies, will those movies then prove more vulnerable to Hollywood or perhaps other external suppliers?
If Hollywood becomes more important within India, will cultural diversity go up or down? Many Indians will have more choice but a national tradition would become weaker. And Bollywood is not the entirety of Indian cinema. Bollywood often outcompetes the more regional Indian issues, such as are filmed in Tamil. If you were a small-scale regional Indian moviemaker, would you rather compete with Hollywood or Bollywood?
Where prison is a step up
Charles R. Jenkins, the Vietnam deserter who fled to North
Korea nearly 40 years ago but was recently returned to Japan with his Japanese
wife (who herself had been kidnapped by the North Koreans), was demoted,
dishonorably discharged and given a 30-day prison sentence. It’s seems a remarkably light punishment for
a deserter. On the other hand, Jenkins
has been living in a prison, without heat, hot water or electric lighting for
nearly forty years It’s hard to see how
we could punish him more than that. It’s unfortunate so many innocents continue to rot in the prison that is North Korea.
Environmentalism and Wealth
Daniel Ben-Ami has a nice essay at spiked-online about environmentalist thinking (click here). He notes that since the Enlightenment people have thought that human progress comes from mastery over nature and from being more productive, but many environmentalists think that human well being is harmed by being more productive. It’s an important point that leads to some real policy differences. If you think that we have too many green house gases, then you have two choices: stop manufacturing or learn to manufacture without as much pollution. Too many environmentalists opt for the first choice, which is bad because so much of the world’s poor look to gain from industry. Ben-Ami notes this as a disturbing trend among certain segments of the green movement – too many are calling for roll backs of technology, rather than searching for better and cleaner technology.
A good defense
How can neuroscience inform economics?
Colin Camerer, George Loewenstein, and Drezen Prelec have produced the longest and most substantive survey article on neuroeconomics to date. For those of you familiar with the basic methods, the punchlines start on p.30.
Neuroeconomists don’t just do brain imaging. Most generally they study how the human nervous system interacts with economic phenomena.
What is the bottom line to neuroeconomics? Does it offer new (and valid) predictions?
Wikipedia makes an ambitious claim:
…neuroeconomics may lead to significant changes in how we educate children, plan finances, manage employees, react to advertising and marketing, elect politicians, regulate government and industries, prove guilt beyond a reasonable doubt, select courtroom juries, monitor terrorist threats, and much more.
Neuroeconomics, in its current state, is most effective at helping adjudicate outstanding normative controversies. Do ads brainwash or inform us? When are savings decisions made on the basis of long-term planning? Which parts of the brain help us choose politicians? Do we allocate money the same way we allocate time? Think of neuroeconomics as a measuring device rather than a new body of theory. Look for better and more reality-tested answers to extant questions, not novel predictions, at least not yet.
Over time neuroeconomics will make our theories less universal and more context-dependent. This development will prove most important for normative economics and policy analysis, where realism is at a premium. If you’re still talking about how Friedman 1953 and how plants maximize received sunlight, neuroeconomics won’t make you very happy.
What I would want most: A testable neuroeconomic theory of why risk premia vary over time in securities markets. But that is very far away.
Here is my earlier post on neuroeconomics, replete with additional links. Here is Randall Parker’s excellent post on Coke vs. Pepsi, as measured by brain imaging.
Tyler’s Ideas for Bush’s Second Term
Here from an earlier post are Tyler’s ideas for a second term. Good ideas all. Keep your fingers crossed.
1. Eliminate all farm subsidies, tariffs, quotas and price supports.
2. Tell Western Europe it is paying for its own defense from now on.
3. Admit that the Medicare drug prescription bill was a mistake. Repeal it, and consider a revenue-neutral benefit that does not discriminate against prescription drugs. Introduce means-testing for Medicare to stop that program from bankrupting us. I would rather cut this benefit than repeal the tax cuts [tax shifts, correctly, though spending discipline could turn them into real tax cuts.] The long-run benefits of greater capital accumulation remain significant.
4. Negotiate bilateral free trade agreements as rapidly as possible. Start with Japan, the second largest economy in the world.
5. Strengthen America’s commitment to science. This will have implications for educational policy, immigration policy, and regulatory policy. Don’t restrict stem cell research. Hope that science comes up with affordable and politically sustainable solutions for global warming and clean energy independence. You might have libertarian objections to science subsidies, but the realistic alternative today is more government intervention.
6. Strengthen early warning systems against infectious diseases. Increase research into cures, vaccines, immunity, and the like. We don’t want the world to lose fifty million people to avian flu or some other malady.
7. Take in more immigrants, but demand higher levels of skills and education. At the very least, take in any revenue-positive immigrant.
8. Abolish the Department of Education.
9. Abolish the Department of Energy.
10. Repeal all corporate welfare.
11. Repeal the corporate income tax. Repeal the Alternative Minimum Tax. Admittedly these are “ifs,” depending on fiscal considerations.
12. Get on TV and tell the nation that a free economy is a critical source of our strength. Tell them you mean it, and then mean it. Economic growth is the greatest long-run gift we can give to the world.
Outsourcing Bangalore
I mean outsourcing from Bangalore, not outsourcing to Bangalore. Apparently production costs are rising out of control in a city that accounts for a third of India’s software exports. The major culprit is congestion; a seven-kilometer commute can now take ninety minutes. Population has grown by a third since 1995, and the new metro and airport are badly behind schedule. Bombay has had similar problems.
The remedy? Madras (Chennai) is rising in popularity as is Calcutta, despite its propensity to elect communist governments.
The bottom line: Indian infrastructure is chaos. This economy has only a limited ability to absord outsourcing ventures. For instance it is common for current enterprises to supply their own electricity and other public services.
I have drawn on conversations and the November 1 Business Week.
Genius
My talk as reported by The Hindu
“His ideas might give most art lovers, especially the die-hard supporters of the culture cause in Bengal, more than a sleepless night. But Tyler Cowen, Professor of Economics at George Mason University in the United States, firmly believes that Beethoven, Mozart, Bach, Leonardo da Vinci and even Shakespeare were businessmen and is willing to prove it.
“They were all businessmen, they wrote for money. Art and commerce have always been linked. The countries that have been commercially well off have been leaders in the arts and we have to embrace that. There is nothing evil about marketing,” says Dr. Cowen, who was in Delhi to attend the Liberty and Society Seminar organised by the Centre for Civil Society this past week.
While equating Beethoven with a businessman might be hard to digest for those who believe that creativity can never be commercial, the professor’s thoughts on globalisation will also not fit into their book as ‘acceptable’.
First, he claims that globalisation does not lead to homogeneity of cultures but encourages heterogeneity and will help endangered forms of art, an argument which is neither “Right” nor “Left”.
“I don’t think that India has anything to worry about on the count of culture. It has a vibrant culture; it has a great food culture too. India is growing and the purchasing power of people is also increasing. There is more foreign culture that is coming into India, but India has always had the ability to integrate different influences from the Mughals to the British and make it distinctly Indian. The earlier styles were a fusion of culture from Persia, China, but always with an Indian touch,” he says.
With the market forces better developed in the modern world, it is easier for craftsmen as well as artists to reach their consumers that would help in preserving the traditions of the past — an angle that might escape most people. But one that Dr. Cowen points out in his book, “In Praise of Commercial Culture”. “There would be areas where diversity would have gone down, but there is enough evidence in the 65 countries that I have travelled that in most areas like literature, paintings and music it has increased. Globalisation has led to the system of notation to be used in Indian classical music, which will preserve music for longer. If the stuff is good, people will buy it, I bought about 20 CDs of Indian classical music myself. I know everyone is not like I am, but I am pretty optimistic about classical music,” he remarks.
A “hero” that most commercial Hindi movie directors would love, his theory resemble the ideas they have been have been selling for years. “I know people criticise Hindi movies saying that it is not like Satyajit Ray. But I think that they require as much talent as a Ray film. They have a dreamlike quality, similar to Shakespeare. It appeals to universal human emotions and everyone wants to fall in love,” he adds.”
Poll Positions III
It’s past midnight for me, but we have some reasonable data so far: Bush will likely win the popular vote because Kerry did worse in the Gore states and Bush will either tie or win the Electoral college with about 275-285 votes. Ohio might tighten as the morning wears on and absentee ballots/early votes are counted. The massive number of absentee/early ballots in New Mexico might flip the state to Kerry. So I’ll wait till tommorrow to see the final EC count, but I can safely say the following…
The following folks were right:
1. The final round of pre-election polls by major news organizations and the reputable polling organizations. If you average them, you got a Bush lead – not huge – but it was there. Individual polls were wrong, but the batch was right as a whole.
2. The Iowa Electronic Markets up till Monday. The Bush vote share was selling at $.51 – probably close to final number.
3. My sociology undergraduates (scroll down to the “Poll Positions II” post below) collectively predicted a clear Bush popular vote win. The students predicted about 49.7% for Bush. They might have done better if they had not overestimated the Nader vote.
The following folks were wrong:
1. Fabio Rojas. Following the incumbent rule, I believed that the undecideds would go for Kerry. I was wrong. Plain wrong. [Note: There is a slim chance that my electoral college prediction might come true.]
2. John Zogby – Early on election day, polling world demi-god Zogby predicted a Kerry blow out. Even if Kerry wins the electoral college, it might be because of slim Kerry win in Ohio and the New Mexico lead evaporating for Bush. Kerry could take the day, but not because he won the popular vote.
3. Exit polls. I tell people that I have a very low opinion of exit polls. They are often poorly executed and are easy to misread. Today is yet another peice of evidence against exit polls.
4. Iowa electronic market on tuesday. There was a short panic when Kerry contracts sold for more than Bush contracts. I guess some traders panicked when they heard about the exit polls. Shame on them!
That’s it for now. Now back to our normal blogging at Marginal Revolution…
Poll Positions II
More election day fun:
1. In exchange for some extra credit on their upcoming exam, I asked students in my two classes to guess what the popular vote breakdown will be today. As a good rational choicer, I only give the points for accurate predictions. I averaged their predictions: 49.7% Bush, 48.7% for Kerry and Nader gets 1.9%. Let’s see how the Indiana Extra Credit Market pans out tomorrow…
2. Dave from Colorado (see item #7 in yesterday’s post) got someone to write in Vernon Smith in Washington DC. Good going, Dave!! Anybody want to write in either Tyler or Alex?
Should you vote?
Jordan Ellenberg says yes and offers some mathematics in response to Steve Landsburg. He sees a voter in a swing state as having a very real chance of being decisive. Economists, of course, are known for their long-standing insistence that your vote has virtually no chance of swaying an election.
My take:
This entire debate goes down the wrong lines. Let us start with a simpler question. Should you always make decisions by considering your marginal product alone?
Let’s say you were asked to join a firing squad of ten expert marksmen, all shooting at an innocent man, and so good they never miss. Still, they want a louder execution with eleven bullets instead of ten. In return they will donate five dollars to your favorite charity. Should you join and shoot?
Most of us would say no, even though your bullet has no chance of changing the final outcome. Once you buy this conclusion, it is easy to see why people might vote. Most moral judgments reflect some mix of estimated marginal and average products, not just marginal products alone. In part morality means the ability to take a longer-run, universalizable, or more rules-based perspective. So you need not feel guilty if the economist tells you not to vote. Maybe you are not rational in one sense of the word, but surely having a disposition to be moral can be justified.
That being said, voting may still be a mistake.
The best argument for not voting is the following: in lieu of voting you should earn extra income and donate it to the very poor. Or perhaps take the day off and work at the soup kitchen. After all, why should voting be the most important collective good you can contribute to? And even if voting has a special importance, maybe you should work harder, earn more money, and use the funds and your time to get other people to vote. Spend a day driving people to the polls rather than voting, for instance. [Or donate to the poor in India and write a blog? Alex]
It does not suffice to talk about doing both voting and charity; substitution at the margin is always possible. You might think that voting is relatively cheap, but so is helping Indian beggars.
Another argument against voting involves holding the meta-rational belief that you are unlikely to improve upon the collective wisdom of others. Your chance of figuring out how to help the poor probably exceeds your chance of picking the right candidate. Of course few people will admit this.
Overall I view voting as a selfish act, usually done for purposes of self-image. But this has some altruistic and some non-altruistic ramifications.
I fondly recall Gordon Tullock’s point: “The paradox is not why people vote, but why everyone doesn’t vote for himself.”