How much music is enough?

by  Tyler Cowen in

I’ve been sampling the Bach box and I pronounce it worth buying.  Compared to the available full-price recordings, I give it a 7 out of 10 and that is for 65 cents per disc.  The sound is generally quite good, the performances of the chamber music are excellent, the harpischord occasionally stale (I prefer Bach on piano), the masses and passions are above average, and most of the cantatas are "good enough."  It won’t displace my very favorite Bach recordings, but these make good second choices pretty much across the board.  To be frank, even among experienced classical music listeners, no more than one person in ten can tell the difference and yes that means you.

Yesterday Jane Galt asked "how much music is enough."  Ha!  But two days earlier, after receiving the new Amon Tobin CD, I vowed not to buy another CD for an entire year.  It’s not a question of money, rather I am looking for a new listening experience.

Let’s see how long I last, I’ll let you all know when I snap.

The union wage premium, revisited

by  Tyler Cowen in

Ezra Klein, in his response to my post on the union wage premium, directed our attention to this article about the union wage premium in service industries.  The paper does find a wage premium, and in doing so offers up some juicy bits:

Our
research suggests that unions usually have little power to inhibit subcontracting
altogether, but that they can sometimes mitigate its negative effects
on their members.  The
hardest trend to fight has been the outsourcing of labor-intensive kitchen
tasks – baking, cleaning and chopping produce, making stocks and sauces. 
The purchasing of prepared foods has become such a ubiquitous and fundamental
business strategy in the industry that it has been almost impossible
for unions to stop it.  In the end, the economics of using pre-prepared
food are simply too compelling, and because the outsourcing is usually
done piece-meal, the union would have to fight over just one or two
jobs at a time.  However, when the numbers of jobs involved are bigger
and the economic advantages less clear – for example, subcontracting
an entire laundry unit – unions have been able to focus their efforts
and have had somewhat more success, slowing the process down or limiting
it.

Yes I can see the resulting wage premium within the union, but is this a good way to advance the state of the working man in the United States?

Thorstein Veblen

by  Tyler Cowen in

I never expected to write "Thorstein Veblen reminds me of Robin Hanson," but upon rereading Theory of the Leisure Class he does.  Everything is reduced to evolutionary biology.  Signaling and status-seeking are at the forefront of virtually every explanation.  Industrial habits spring from man’s biological nature, transplanted into a new and strange environment.  Had I reread this ten years (I first read it as a teen, and not since, then I hated it) ago, it would have been a revelation.  Now it sounds like a typical lunch discussion with the guys, with Spence, Hayek, and Geoffrey Miller sprinkled in.

Veblen, however, is a blowhard as a writer and Robin is not.

Here is Mark Blaug on Veblen.  Here are links to Veblen articles.  Here are more links.  Here is Mencken on Veblen.

I tried two other Veblen books and found them unreadable.  The guy deserves much more credit than he gets, especially from conservatives and libertarians, but read the evolutionary biologists first.

#20 in a series of 50.

The Capitalist Vanishes

by  Alex Tabarrok in

The I/B/E/S database purports to document the earnings expectations of research analysts.  The database has been used by academic researchers in hundreds of papers and is also used by the industry to rate and promote research analysts. 

A new paper, Rewriting History, claims that there has been massive tampering with the database.   Call it the capitalist vanishes.

Comparing two snapshots of the historical I/B/E/S
database of research analyst stock recommendations, taken in 2002 and 2004 but
each covering the same time period 1993-2002, we identify 54,729 ex post changes
(out of 280,463 observations), including alterations of recommendation levels,
additions and deletions of records, and removal of analyst names. The changes
appear non-random across brokerage firms, analysts, and tickers, and have a
significant impact on the overall distribution of recommendations across stocks
and within individual stocks and brokerage firms. They also affect trading
signal classifications, back-testing inferences, track records of individual
analysts, and models of analysts’ career outcomes in the three years following
the changes.

Hat tip to Mike Kellermann at the Social Science Statistics Blog.

The Paradox of Libertarianism

by  Tyler Cowen in

Here is my response to Brian Doherty’s CatoUnbound essay, and here is opening bit:

Brian Doherty asks: "Did this libertarian movement . . . actually accomplish anything of unquestionable significance?"

Yes: Bigger government.

Or try this:

The old formulas were “big government was bad” and “liberty is
good,” but these are not exactly equal in their implications.  The
second motto – “liberty is good” – is the more important.  And the older
story of “big government crushes liberty” is being superseded by
“advances in liberty bring bigger government.”

Libertarians
aren’t used to reacting to that second story, because it goes against
the “liberty vs. power” paradigm burned into our brains.  That’s why
libertarianism is in an intellectual crisis today.

100 Greatest Trips

by  Tyler Cowen in

That’s the title of a fun, new book.  Here is my personal selection of 10, in no particular order, and not counting the U.S.:

1. Glottertal to St. Maergen, through the Black Forest.  Maybe only two hours by car, but sheer magic.

2. The East Coast of Taiwan, Suao down to Hualien and then into Taroko, the marble gorge.  The best coastal route I know.

3. Mostar and Sarajevo, to remind us of the thinness of civilization.  They’re also beautiful cities with great food and moving graveyards.

4. Susten Pass, in Switzerland, the best route through the Alps.

5. The bus from Punta Arenas to Torres del Paine, Patagonia, Chile.  You see flamingos, rheas, and end up in a stunning national park.

6. The Panama Canal
— perhaps the most underrated sight; you feel like you are in the jungle,
you are in a jungle, then a large steamer comes by.  The tour of
Rotterdam Harbor is a close runner-up.

7. To and through the Tiong Bahru food stalls in Singapore.

8. Thingvellir, Iceland, home of the first Icelandic Parliament.  Such a long trip to see just four homes.

9. A walk through Ginza District in Tokyo, or perhaps Shinjuku subway station, with its dozens of maze-like paths to varioius streets.  Don’t even try the map, just be happy with wherever you end up.

10. Walking Paris end to end, pick just about any route.

I’ve never been to East Africa, and I’m not counting the Iron Market in Port-Au-Prince.

Tenure and mandatory retirement

by  Tyler Cowen in

…Is the university tenure system compatible with eliminating mandatory retirement?

Yes.  Unproductive old people are not, in academia, a huge problem.  Most of the research value comes from a small percentage of creators in the first place, and many of those people have done their important work by age 45 in any case.  To put it bluntly, the tenure system works because for many people their "output" doesn’t matter in the first place; tenure is however wonderful for the stars.  The goods produced in academia are often symbolic goods anyway, such as prestige. 

And what is the market trend?  Private universities strengthening the real value of tenure by raising salaries and lowering teaching loads.  That’s what the market test says.  Superstars are becoming more productive, in part because of the Internet and the greater ease of disseminating quality work.  For-profit universities, which typically don’t have tenure, have failed to take over the sector, once again showing there is usually competition between different organizational forms.

#19 in a series of 50.

Addendum: Here are Mankiw and Levitt on tenure.

The More Loving One

by  Tyler Cowen in

Looking up at the stars, I know quite well
That, for all they care, I can go to hell
But on earth indifference is the least
We have to dread from man to beast.

How should we like it were stars to burn
With a passion for us we could not return?
If equal affection cannot be,
Let the more loving one be me.

Admirer as I think I am
Of stars that do not give a damn
I cannot, now I see them, say
I missed one terribly all day

Were all stars to disappear or die,
I should learn to look at an empty sky
And feel its total dark sublime,
Though this might take me a little time.

– W.H. Auden

Making Knightian uncertainty operational

by  Tyler Cowen in

Tell us how "Knightian uncertainty can be made operational"…

Knightian uncertainty is not usually important when you are playing the first twenty (or is it these days thirty?) moves of a Ruy Lopez in grandmaster chess.  When Knightian uncertainty matters, we should observe market participants investing more in opportunities for serendipitous discovery.  This might, for instance, mean buying new books on a lark, traveling randomly around the world in search of insight, and in general mimicking wunderkind Ben Casnocha.

Do you think Knightian uncertainty is important in labor markets?  If so, go out and hire some people on the basis of rumors.

Norton A. Myers’s new and excellent Happy Accidents: Serendipity in Modern Medical Breakthroughs: When Scientists Find What They’re NOT Looking For is one of the best books I know of on science.

#18 in a series of 50.

Sarah asks about age and productivity

by  Tyler Cowen in

[Please discuss the] relationship between age and productivity.

Economics has a real problem.  The smartest people, by the time they are forty (if that), have extremely lucrative opportunities for consulting.  They can earn hundreds or thousands of dollars an hour.  Most of them cash in, even if they continue to produce good work based on 80 percent of their core attention and capabilities.  We get a steady stream of young innovators, but we have few truly deep thinkers at the top of their game. 

On the other hand, the economics profession stays broader than it otherwise would be.  Non-lucrative fields, such as public choice, economic history, and cultural economics, keep their best thinkers to a greater degree, relative to econometrics and finance.  But perhaps these low-paying fields attract fewer really bright people in the first place.

#17 in a series of 50.

I heart unions, unions are we

by  Tyler Cowen in

Ezra Klein tells me to go out there and tell people I support unions.  I do.  Alex likes unions too.  But we felt unions do not go far enough.  So we bypassed the capitalist altogether and started marginalrevolution.com.  (The sinister Jane Galt, on the other hand, rules over Winterspeak and Mindles with an iron fist and rakes in all that Amazon revenue for herself, surely they need to combine against her.)  MR is run solely by its laborers and when it comes to decision-making I can assure you there are no secret ballots. 

Labor-run firms are common in law, book agency, real estate, landscaping, and many other sectors; we even see them in airlines.  When labor in charge creates more value, labor starts its own firms or buys out the capitalist or buys greater control rights.  Growing capital markets make these evolutions easier all the time.  Cooperatives, which are governed by consumers, also are found.  Mutuals, non-profits, and yes unionized firms are common too.  I heart all of these organizational forms.  Keep in mind that if both workers and customers will be better off, yes it probably can happen; it is naive to think that liquidity problems are the major issues preventing workers from enjoying greater control rights.

In the short run, the mental model of the left-wing bloggers is a bunch of janitors trying to get better working conditions but opposed by employers.  In the longer run what is striking is the competition across different organizational forms.  It doesn’t always make sense to give labor residual control rights over capital goods, or the right to halt production.