DOJ to break-up Marginal Revolution?
Steve Kirchner at Institutional Economics is worried about a bubble in economics blogs. But he has a solution:
Clearly government intervention is required to bring order to this sector of
the blogosphere and prevent a blog boom-bust cycle from developing. As a
solution, I propose the nationalisation of blogs, starting with John Quiggin, who can
then educate us all on the merits of public ownership of the means of blogging.Marginal Revolution will be broken
up by the Justice Department into two separate blogs, one for Tyler and one for
Alex, to end its market dominance.
Ah, antitrust protectionism, it is the sincerest form of flattery!
Addendum: What’s good for farmers is surely good for writers too. So says Dan Akst in his own solution to the flooding of the market.
Associations for everything
A bisexual asexual, Jay began thinking of himself as asexual when he was 15 and came out as asexual while a student at Wesleyan…
Here is the story. Here is the assocation. Here is the on-line dating site. Here is an asexual debate on the wrongness of adultery. Thanks to www.politicaltheory.info for the link.
Dutch Treat
Holland’s Health Minister has proposed a system for organ donation similar to what I have called (in Entrepreneurial Economics) "no-give, no-take." Under the proposed system people who sign their organ donor cards would receive points which would raise them on the waiting list should they one day need an organ.
My main argument for no-give, no-take has always been efficiency, it would increase the incentives to donate. It’s fairness, however, especially as it intersects with the politics of immigration that is driving the change in Holland.
The Liberal VVD minister defended his proposal by pointing out that
Muslims often refuse to donate organs based on religious beliefs. This
is despite the fact they are willing to receive an organ if they are
ill. "That creates a bad feeling," he said."If you say: ‘I refuse to donate an organ because of my religion,
but I don’t want to receive one either’, than I will respect it. But I
won’t respect a one-sided attitude of receiving and not giving. I find
that problematic," Hoogervorst said.
Thanks to Dave Undis for the pointer.
Transhumanism: at what margin?
I tend to sympathize with transhumanist ideals, if only for the same reason that I do not hesitate to use antibiotics. Furthermore I have never had huge hang-ups over the "identity" concept; I don’t celebrate St. Patrick’s Day and I find it embarrassing to admit that I root for the Washington Wizards. "The Six Million Dollar Man" was one of my favorite TV shows as a kid, although even then I thought the price was too low.
That being said, the economist in me asks not "whether" but rather "at what margin"? Is there any margin at which concerns of identity should cause us to reject otherwise beneficial transhumanist improvements?
Most people want their children to look like themselves, and to some extent to think like themselves. We invest many thousands of dollars and many months of our time to acculturate our children. Now let’s say your children could be one percent happier throughout their lives, but this would mean they were totally unlike you, the parent. In fact your children would be turned into highly intelligent velociraptors and flown to another planet to live among their own kind. How many of us would choose this option? I can think of a few responses:
1. Transhumanism will bring improvements of more than one percent; we should forget about identity and let everyone become healthier and happier. What’s wrong with uploads?
2. Governments should not restrict transhumanist innovation. Let people and their children choose their degrees of identity continuity for themselves. (Isn’t there a collective action problem here? Everyone wants a more competitive kid but at the end humanity is very different.)
3. The parental analogy is not relevant for policy choices. Parents should be partial across identities, but governments should be more neutral. And surely uploads will still be allowed to vote, no?
4. Identity attachments are, very often, petty and small-minded to considerable degree. We should be cosmopolitan across chimpanzees and intelligent velociraptors, not to mention enhanced humans.
I still favor laissez-faire for transhumanist innovation. And all the listed arguments have force with me. But I would feel better rejecting the critics if I had a framework that would simultaneously recognize the value of identity while giving it limited weight to override medical progress.
These thoughts were stimulated by reading the new and useful More than Human: Embracing the Promise of Biological Enhancement, by Ramez Naam.
Addendum: Here is an excellent Nick Bostrom essay, which argues human evolution may otherwise deteriorate. He also wonders whether happiness and consciousness have evolutionary advantages in the long run. Thanks to the Vassar family for the pointer.
What I’ve been watching
1. Da Ali G Show: The Complete First Season. Is there a more powerful comic genius at work today? This British would-be gangsta rapper has at least four hilarious personae; Yana’s favorite is Funkyzeit mit Bruno, a gay Austrian fashion designer. Or imagine a funnier Howard Stern interviewing Newt Gingrich, Dick Thornburgh, Ed Meese, and Reed Irvine. His repeated portrayal of a hapless Kazakh man seeking sex has drawn repeated protests from the embassy; it is now what the country is known for.
2. Laibach: The Videos. Laibach was one of the leading Slovenian punk rock metal industrial fascist-mocking groups of the 1990s (the sentence is not a joke). Their Let it Be album redoes the Beatles, and their "Across the Universe" is my favorite Beatles cover, with Joe Cocker as a close second. But note: their Nazi-Wagnerian jackboots reconstruction of "Get Back" will send most of you running away.
3. Goodbye Dragon Inn, The first line of dialogue does not come until about halfway through this 80-minute movie. And much of the film is you watching other people watching a movie, how is that for meta? It is about the passing of the old Taiwan, the transitory nature of observation, the power of the image, and the fundamental sillness of watching a movie through. Not since Tarkovsky has a director used sound and silence so effectively, nor is anyone so good with restroom scenes. It is a help, not a spoiler, to tell you that the two old men are also (much younger) characters in the movie on the screen. Tsai Ming-Liang is one of the world’s seminal directors and this is one of his leading entries. Short enough to endure, even if this is not your cup of tea, and maybe you will love it as I did.
Are economic graduate students conservative?
Economists are often thought of as conservative, but that was not the case in the previous study [1985] nor in this one. In this study, 47 percent of the students classified themselves as liberal, 24 percent as moderate, 16 percent as conservative and 6 percent as radical. (Six percent stated that politics were unimportant to them.) These percentages are very similar to the last study, although the share of those identifying themselves as radicals declined (from 12 percent). The students perceived their views as slightly more liberal than those of their parents, 40 percent of whom they classified as liberal, 36 percent as moderate, 16 percent as conservative and 3 percent as radical.
By the way, Chicago graduate students are now less conservative than those at Stanford; Chicago is rapidly losing its uniqueness.
Do note that "liberal" economists are often fairly conservative, at least relative to the left as a broader political class. Economics gives plenty of reasons (whether you agree with them or not) to defend government intervention. At the same time the ideas of cost and constraint remain prominent.
I view most Ivy League economics graduate students as highly peer conscious. They want to fit into the views of the intelligentsia surrounding them, and above all they would find membership in the Republican party a source of great social embarrassment. They are fiscally conservative Democrats who are liberals on social issues, but don’t really much toy with the idea of becoming libertarian. They prefer to put themselves in the class of "good-thinking people," without always engaging in or welcoming the necessary debates.
The above quotation is taken from David Colander’s article in the Winter 2005 Journal of Economic Perspectives.
The definitive work on the policy views of social scientists is being done by Daniel Klein and Charlotta Stern, read more here. And I am pleased to announce that Dan will be joining us at George Mason next year as a new member of the faculty.
My idea of how to clean up the house
Take one of the many large piles of papers and books lying around the house, and start reading the material. By the time all the material is read, the pile is gone.
Marxist reforms for the NBA
The rules of basketball have changed often over the years, so I hope no one will object if I offer a few modest revisions to make this truly wonderful game even better:
First, I would charge an admission fee not only to watch the game but to play in it. And the more one pays, the longer one gets to stay in the game.
Second, there should be a price paid for each shot taken, and the easier the shot, the more it should cost.
Third, as for fouls, one should be able to pay the referees, so that they never call any fouls on you (or walking or double dribble violations for that matter).
Fourth – and maybe most important – there is no good reason that the baskets should be the same height for both teams. It should be possible for the team that pays more to have its basket lowered, and for double that amount to have the basket the other team is going for raised.
Under present rules, those players who are taller and better coordinated and can run faster and jump higher have all the advantages. My rules would exchange the advantages enjoyed by these people for other advantages that would benefit a different group, one that has been poorly served by basketball as now played. That group is the rich. With my rules, the rich would possess all the "talent" (what it takes to win) and – more in keeping with what occurs in the rest of society – never lose a game.
The (ostensible) goal is to educate people about how capitalism really works. But if we are going to play the game of caricatures, I’d like to see a "democratic NBA." The vote of the crowd determines who wins the game. Your points can be taken away from you at any time and given to the other team. And note that foreign policy — arguably the most important thing our government does — is determined solely by the vote of the crowd of the home team.
For those of you who care about real "regulated by a third party private intermediary" NBA basketball, here is an analysis of the top five contenders. The betting markets tell a different story.
Why are all movies the same price?
Well, not the same price in all cases. Before 6 p.m. is cheaper, there are numerous dollar theaters, and not all films allow for discount coupons. Nonetheless a multiplex will charge the same ($9.50 in my case) for the number one movie and for a flop. Nor is the price more expensive for Saturday night, or during the summer when demand is higher. Can any economic model predict these results? Here are a few observations:
1. Theater owners are trying to maximize profit across all screens. Spillover demand, from people who can’t get in to see their first choice, is a significant source of revenue. You don’t want markets to clear on a screen-by-screen basis.
2. Low prices encourage queuing, which attracts the young and hardy. Those same customers are most likely to spread the virtues of movies by word of mouth. A theater might rather have a young customer than an old customer.
3. Lines for a popular film are one way of generating valuable publicity.
4. A priori, I would have expected the number one movie to sell cheaper, not more expensive. Moviemakers wish to generate snowball effects for potential hits. (For purposes of comparison, it reflects commercial prestige to have your books sell for a low rather than high price.) This also predicts movies will be cheaper in early stages of their run, which does not generally seem to be true.
5. Maybe the whole theatrical thing is a shadowplay for popcorn sales and advertising for a subsequent DVD release. The theater owner, on his side, may not care so much about getting the profit-maximizing price right. So he invests in consumer good will by offering a flat price across all films.
6. The emergence of strict uniform pricing across movies appeared in the early 1970s; it is sometimes suggested that Paramount insisted upon such pricing (illegally) for the release of The Godfather. (The 1948 Paramount decision limited the involvement of the distributor in pricing decisions, but there is pressure nonetheless.)
7. Variable pricing would divert movie demand to weekdays, which would make it harder for a film to be number one at the box office for its opening weekend. And since a top movie will sell out in any case, why bother lowering the price for Saturday night?
8. With differential prices you might buy a ticket for a cheaper movie and walk into the more expensive movie.
You could ask related questions about why restaurants do not tack on a surcharge for Saturday nights, although I find this practice is becoming more common. As far as the movies go, I will put the most weight on #7. And I have turned on the comments section…
Plagiarism in economics
…nearly 24% of responding [journal] editors encounter one case of plagiarism in a typical year. In addition, the survey reveals that less than 19% of responding journals have a formal policy regarding plagiarism. Moreover, there is a great deal of variance in what is considered plagiarism and what an appropriate response to plagiarism should be. A majority of editors believe that the economics profession would benefit from a professional code of ethics.
Here is the paper. I believe I have been plagiarized twice during my career, each time by a well-known economist. Not word-for-word copying, but rather using a borrowed idea –and the major idea of the paper — rather directly without attribution. (In each case the instance was pointed out to me by somebody else as well, so I am inclined to dismiss the possibility of self-delusion on my part. Plus in each case I know the plagiarizer had access to the paper.) In each case the plagiarist took an unpublished paper and improved upon my original idea. In neither case did the plagiarist gain anything concrete from the action, nor have I suffered any real net harm. I am not convinced that the welfare consequences of economic plagiarism are very large, but arguably there is an ethical case for devoting more attention to the phenomenon.
The Big Bang
Compared to say quantum physics or relativity the big bang seems straightforward – there was a big bang, right? In fact, the idea of an expanding universe is as strange and intuition-defying as any in physics.
The strangeness of the big bang model first become clear to me when I quizzed Robin Hanson along the following lines. How can the universe be infinite (as some cosmologists think) when we know that the universe is some 14 billion years old and it is expanding? Doesn’t this mean that it must be finite?
Robin, who continues to publish papers in quantum physics as well as economics, explained that the universe is infinite and was already infinitely large when the big bang began, it’s space that has expanded. The big bang was not an expansion in space but an expansion of space. (My interpretation – think of the infinite number of points between 0 and 1 being mapped to the infinite number of points between 1 and 10.)
If that’s not clear, and I don’t suppose that it is, this month’s Scientific American has the best introduction to the big bang that I have ever read. I’ve also found this FAQ useful (see especially the answer to my question here).
Awkward questions about natural resource prices
One of my great joys is going to lunch with Bryan Caplan and torturing him with my contrarian opinions. I will even make up a temporary view toward this end.
Tuesday I told him that most commodity prices are, in real terms, higher than they were a decade ago. Furthermore in many cases both the futures and the spot prices have been rising.
Many MR readers will know that Julian Simon won his famous bet with Paul Ehrlich. Simon challenged Ehrlich to name five resources of his choice. At the end of the time period, those resources had fallen in real price, so Simon won the bet. But Ehrlich probably would have fared better had the bet expired today.
To be sure, most resources are still cheaper in real terms than in much earlier eras. But has the time passed when real resources will get cheaper every period? Is ever-increasing resource plenitude a thing of the past? Market prices seem to indicate so.
Of course you might expect real price declines to resume for most resources. You might cite a similar and premature commodity price scare from the early 1980s. Or you might claim that the special circumstances of Chinese economic growth have led the demand for raw materials to rise faster than the supply, but only temporarily. But would this be betting against market prices? Could we still cite market prices as a sign of Simon’s triumph over Ehrlich? And could we become rich by selling commodities short?
Isn’t it simpler to believe that market prices speak the truth and that the demand for raw materials will continue to outstrip the supply?
Now I am trying to decide whether this was a "contrarian, made up for lunch with Bryan" opinion, or a real opinion…And here is my earlier post on resource prices…
Addendum: Alex points out that the commodity price spike is less than ten years old. Four years would be a better estimate, but this does not change the logic of the argument. If one cites market prices as "sufficient statistics" of resource value, why not apply this logic consistently when real prices rise?
What I’ve been reading
The Big Picture: The New Logic of Money and Power in Hollywood, by Edward Jay Epstein. Why is opening weekend so important? "The benefits of prolonging a film’s run in the theaters are now negated by the loss that would be sustained by delaying its video opening past the point at which it can benefit from the movie’s advertising campaign." This is the best available work on the economics of cinema. How many books cite both Arnold Schwarzneger and Mises’s discussion of non-pecuniary goods?
King Lear: This is about my fifth reading. I had never fully realized that Lear had incestuous relationships with at least one of his daughters (for instance check out 1:2, 150-152, 1:4, 176-182, plus the entire Oedipus analogy). Furthermore he was ready to sell out his country to the French. Edmund, Goneril and Regan were not so bad after all.
Handbook of Economic Sociology, second edition, edited by Neil Smelser and Richard Swedberg. Yelp if you wish, but I see sociology as the most underrated social science. It is (some) sociologists who are the problem. Most of the advances in economics over the last fifteen years have actually come in sociology done by economists. Just look at Steve Levitt or behavioral economics. Since economists have not discovered any new "core mechanisms" since herd behavior (circa 1989 or so), I expect quantitative sociology to whup our collective behinds over the next twenty years. The only question is who will be doing it, us or them.
Art: A Field Guide, by Robert Cumming. This has been my favorite bedtime reading book of the last twenty years. The book gives two or three succinct paragraphs on why each of about 1500 famous artists is good, bad, or somewhere in between. No cultural relativism here, and obviously the guy should start a blog. Few good pictures are included, so you do need to know the works of the artists.
Pol Pot: Anatomy of a Nightmare, by Philip Short. One of the best studies of the anatomy of evil, the psychology of colonialism, and twentieth century Cambodian history.
What I wish I was reading: Going Sane, by Adam Phillips. I read all his books the day they fall into my hands. Phillips, a psychoanalyst for children, is the master of witty and paradoxical observations about human nature. I am told that this new book offers a partial "recipe for contentment," but so far it is available only in the U.K. and perhaps Commonwealth countries.
Choice: The Best of Reason
I’ve been enjoying Choice: The Best of Reason. Reason magazine’s byline has always been Free Minds and Free Markets but perhaps it ought to be Free Minds, Free Markets and Fun. Here’s Drew Carey (from long before Janet Jackson’s wardrobe malfunction):
The government is really into ‘protecting people’. The Federal Communications Commission (FCC) says you can’t broadcast certain words and certain pictures. It says it’s protecting citizens. But I’m sitting in my home with DirecTC and can watch whatever I want. I can afford the best pornography – laser-disc porn! The government’s not protecting me from anything.
All the government’s doing is discriminating against poor people. It thinks poor people are like cows, that poor people can’t think straight: If we let them hear dirty words or see dirty pictures, there’s going to be madness! If you’re poor and all you can afford is a 12-inch black-and-white TV and can’t pay for cable – you’re so protected. You’d probably be happier if you could see some pornography, a pair of titties, once in a while on free TV. But a pair of titties on free TV? The government figures if you saw that, you’d just explode!
Do gadgets make you happier?
I’m now at a point where if for some reason I can’t use my cell phone or iPod (because I forgot it somewhere, because it ran out of batteries) I miss it, even though before these gadgets existed, I managed to get along just fine without them. One might think, then, that there’s no point in ever acquiring such things. The happiness boost is merely temporary. But while that’s true of each individual gadget, the fact that new cool stuff is being invented and brought to market all the time is an ongoing process that creates many happiness-enhancing moments over the years. A growth-free society would be one in which people were basically deprived of such moments.
Matt Yglesias offers more.