Twenty questions
Co-blogger Alex Tabarrok is interviewed by Will Baude of Crescat Sententia. Read Alex on why he blogs, the Alien and Sedition Acts, his 7-point plan for financial security, why we do not have comments, and many other interesting matters.
Electronic voting
Many people fear electronic voting. What if there is an error? Don’t we need a paper trial? How can we be sure that the election won’t be stolen? My response is simple. Ever buy gas? When you buy gas do you pay cash or use a credit card? And when the terminal offers to print you a receipt do you take it, save it, and check it against your monthly Visa bill? Or do you press “no receipt” and drive away?
I have never once checked a gas receipt against my monthly credit card bill and I suspect most people don’t either. The credit card companies have big incentives to record transactions quickly and accurately. The system isn’t perfect but it’s good enough so that I don’t worry about being ripped off and, the key point, the electronic system is certainly more accurate than the primitive process of counting out paper and metallic tokens and handing them over to a minimum-wage cashier who repeats the process by counting out change. I see no reason why electronic voting should not be far superior to punch cards or other manual machine.
Obviously, we need to be careful, which brings me to a suggestion. How about open-source software for voting machines? Opening the source makes life easier for outsider hackers but harder for inside-hackers and open source is less-susceptible to bugs. Open-source would also be well, open – as in an open society.
I would say turn this project over to Linus Torvalds but he’s a Finn and we have to be careful about them but surely there are some skilled programmers who would like to lay the core for voting in the twenty-first century?
Addendum: Yup, here is an open-source voting project.
Are video games art?
Some time ago I asked whether video and computer games would provide the next artistic explosion. I concluded: “I’m still waiting to see the payoff.”
The New York Times ($) has nominated one such game, www.worldofawe.net as an aesthetically worthy experience, click on the link if you are curious. The game combines elements of music, travelogue, diaries, narrative, and digitally constructed artwork. One of the artworks has been included in the recent Whitney Biennial.
My take: Judge for yourself, but for me it is an interesting novelty more than a sustaining attraction. That being said, I didn’t like Faulkner at first either.
A nation turns its lonely eyes to you
Traveling last week and removing my shoes as I snaked through the rope-lines made me wonder whether the airline security people might not benefit from a consultation with the remarkable Temple Grandin. She works at finding ways at making cattle comfortable as they are led to slaughter. Oliver Sacks profiled Grandin, who is autistic, in his marvelous An Anthropologist on Mars.
Bootleggers and Baptists
The Arizona Daily Star reports that Nogales, Arizona will be opening a new state-of-the-art truck inspection station:
The governor touted the new Motor Carrier Inspection Station as a state-of-the-art facility that will improve homeland security while not slowing down international traffic between the United States and Mexico.
It gives state and U.S. federal officials a one-stop shop to inspect drivers’ immigration papers, the safety of their semi-trucks, and the quality and safety of cargo crossing into the country.
But a legal challenge hangs over the new facility:
Attorneys about to argue a federal lawsuit against the NAFTA plan allowing Mexican trucks into the United States aren’t satisfied. They will plead their case before the the U.S. Supreme Court on April 21.
The problem with the new station: It isn’t required to check emissions on incoming trucks.
That means they aren’t being held to the same standards as U.S. trucks and will only worsen air quality standards, said John Weissglass, the San Francisco-based attorney representing the International Brotherhood of Teamsters in the lawsuit. In 2002, the Teamsters, watchdog group Public Citizen, and environmental groups sued the U.S. Department of Transportation to stop the NAFTA plan, citing environmental concerns, which eventually forced the government to conduct a $1.8 million study looking at the plan’s environmental impact.
They say politics makes strange bedfellows, but the Teamsters and Public Citizen? Bruce Yandle of Clemson explains it with a theory he calls Bootleggers and Baptists. The bootleggers like prohibition because it gets rid of competitors. But a politican who wants to listen to the bootleggers needs a more high-minded cause to sell to the public. The Baptists give the politicians cover with the argument that drink is from the devil–it leads to social unrest, unemployment, higher social costs and so on. Same with Mexican trucks. Who can justify keeping out lower cost Mexican trucks just to keep the wages of Teamsters high. Enter Public Citizen. This isn’t about greed. It’s about keeping American air clean.
The appeal of self-righteousness partnering with self-interest also explains why companies often support regulation of their industry. They’ll claim a concern for safety or the environment but often such regulations fall more heavily on smaller competitors and will drive them out of business.
There’s nothing wrong with politicians having both high-minded and low-minded motives. The real problem is that the bootleggers always push the form of the regulation to create higher profits.
NAFTA was supposed to allow Mexican truck companies to compete in the US. We’re still waiting. Before the environmental issue, the alleged worry of the Teamsters was safety. My take on that claim is here.
Microsoft, bundling and all that
Brad DeLong argues that he has been harmed by getting IE for free with Windows.
Remember the days when there was not one single dominant browser that came preinstalled on 95% of PCs sold? Back then there was ferocious competition in the browser market, as first a number of competitors and then Netscape and Microsoft worked furiously to upgrade their browsers and add new features to them….Progress in making better browsers was rapid, because browser-makers wanted to make a better product and any new idea about what a browser should be was rapidly deployed to a large enough user base to make it worthwhile for web designers to try to use the new feature.
But why was competition in the browser market so furious? Hmmm… couldn’t have been because each firm knew that the winner would be a monopoly, could it? The alternative to Microsoft winning the browser war was not competition between many firms but a different dominant monopolist. Focusing on the economics, i.e. without getting into arguments about which firm was the better innovator etc., is there any reason to prefer one monopolist over another?
The double monopoly problem, first explained by Augustin Cournot in 1838, suggests that Microsoft might be the better monopolist. The double monopoly argument says that if two products are going to be monopolized its better if they are monopolized by one firm than by two (or more). The reason is that the single monopolist will take into account complementarities between the two products. The better the brower, for example, the more operating systems Microsoft will sell and vice versa. Separate the two products and you lose this added incentive to lower price and/or improve quality. (If you know the tragedy of the commons argument, the double monopoly problem is the same thing with the customers serving as the common resource).
An unappreciated aspect of this argument is that the reason that Microsoft might make the better monopolist is the same reason it will likely win in any battle with a stand-alone competitor. Microsoft has more to lose from losing and more to win from winning than does the stand-alone and will therefore put more resources into winning. This explains why the European directive requiring Microsoft to sell two versions of its operating system, one with and one without the media player, is pointless. Microsoft will simply sell the two versions at the same price – then which one would you choose?
Aside: I also think that Brad doesn’t appreciate enough the power of potential competition. Low marginal costs and ease of distribution in the software market mean that one of the now relatively small competitors to IE could grow very rapidly. Microsoft knows this and cannot rest on its laurels/behind (your choice). Consider how rapidly the browser substitutes known as RSS readers are growing.
Cuban art
Before leaving for Paris I had the chance to give a talk on Latin American art in Tucson. While preparing I spent some time browsing Google Images for fun. One of my favorite Cuban painters is the expressionist Tomas Sanchez, I like the lusciousness of how he paints forests.
Here is another Sanchez. Manuel Mendive has a more primitivist style, here is my favorite Mendive. If you would like something more avant-garde, try Jose Bedia.
Here is one place to buy some reasonably priced Cuban art.
And how about the economics in Cuba?
State-run galleries sell selected works to tourists and pay artists a percentage, but successful artists like Sandra Ramos and The Carpinteros (Dagoberto Rodriques and Marco Castillo) prefer to deal directly with collectors, inviting them into their homes and studios where they do business in dollars that allow them to support their entire families. The opening week of the biennial is a feeding frenzy of foreign buying with collectors arriving in tours organised by US museums or European travel agencies. (The US allows importation of Cuban art and educational materials.)
With such considerable interest in the biennial, the State has been quick to recognise the potential of the market: an art auction at the biennial raised more than $100,000 to benefit a children’s cancer hospital, with an anonymous collector from Monaco paying $11,000 for a drawing by Kcho, an artist whose signature motif is a simple boat that might be interpreted as an allusion to Cubans’ efforts to escape the island. Somehow Kcho has been co-opted as a quasi-official artist, painting backdrops for Castro speeches and occupying a huge government house.
The bottom line: Censorship or not, if you tax everything else heavily, a good deal of talent will go into the art market. Alex and I wrote about this in our paper An Economic Theory of Avant-Garde and Popular Art, or High and Low Culture (PDF).
Buckley visits Galbraith
William F. Buckley drops in on John Kenneth Galbraith whom he says absurdly is “the most influential U.S. intellectual of the 20th century.” The two old friends then proceed to have a rather doddering conversation.
Buckley asks, “What is it about Bush’s policies that makes them unworthy of conservative benediction?”
“Their ignorance,” Galbraith responds.
“What is Bush ignorant of?”
“Ricardo, for instance.”
Score one for Galbraith.
Later, however, Galbraith delivers what he sees as a crushing blow. “There is not one member of the faculty of Harvard University who is pro-Bush.”
Score several points for Bush!
Actually, it is not even true, Greg Mankiw is Bush’s CEA chair.
The creative commons
Larry Lessig has followed his principles and put his new book, Free Culture, online for free with full rights to redistribute, copy, or otherwise reuse or remix so long as you do so for non-commercial purposes and credit Lessig. Some enterprising bloggers have already taken advantage of the license to record each chapter in MP3 format. Surprisingly, the Lessig book is being simultaneously published by Penguin, which seems like a big risk for them – and having told you where you can get the book for free, will you now buy it at Amazon earning us our vigorish?
I haven’t read Free Culture yet but Lessig’s earlier book, The Future of Ideas, was excellent. Believe it or not, the Future of Ideas, is an argument for the virtue of the commons based upon insights from Austrian economics. A strange but compelling combination.
Addendum: Read Russell Roberts interviewing Larry Lessig here.
Piece work
Violinists at a German orchestra are suing for a pay rise on the grounds that they play many more notes per concert than their musical colleagues – a litigation that the orchestra’s director yesterday called “absurd”.
The 16 violinists at the Beethoven Orchestra, in the former West German capital Bonn argue that they work more than their colleagues who play instruments including the flute, oboe and trombone.
The violinists also say that a collective bargaining agreement that gives bonuses to performers who play solos is unjust.
Here is the full story. Here is a useful site on the labor theory of value. How about paying composers by the number of notes as well?
Bastiat’s house is for sale
The Dufaur de Gavardie de Monclar family, who jointly own Bastiat’s property in Souprosse, inform us that they have reluctantly decided to put it up for sale, as no one member of the family is able to purchase it. It consists of a fine 17th century manor house, with early 20th century alterations, approached via a long tree-lined driveway, a barn and an outbuilding, all set in grounds of 28,000 m².
The main house has a surface area of 200m², on three levels, that is 600m² of living space. The barn, with a timber-frame roof of outstanding architectural interest, has a surface area of 400m² and consists of three levels. The outbuilding is a house on two levels, with a surface area of 100m².
The whole property is for sale for 426,900 euros.
Here is the link, thanks to the Mises blog for the pointer. Here is a short biography of Bastiat that also contains links to many of his works. Perhaps I will stop by the house to pay my respects.
Nothing Secedes Like Secession
I’m in Tucson for a conference. Haven’t been here for a while and it’s striking how different the world looks here in the Southwest compared to the East Coast and most everywhere else. Desert. Cacti. The architecture. Javelinas–little wild boars. Saw some on the 18th hole of the resort’s golf course, wandering around. Even the squirrels are different here.
We take it for granted that this is part of America. But this nation from sea to shining sea could easily be lots of different countries a la Europe. Jay Winik in April 1865: The Month That Saved America talks about how unlikely it appeared in say, 1790 or 1820 that the US would become what it is today. Before the Civil War, the Whiskey Rebellion threatened to split off the western part of the United States. New England almost signed a treaty with England and split rather than join in on the War of 1812. California and Oregon considered forming a Pacific Nation.
By the end of the 1820s and into the early 1830s…when many Americans spoke of the Union, however much they had come to love it, they spoke of “our confederacy,” or more simply of “the Republic.” The Constitution, however revered, was a “compact.” The United States was just as often “the states United,” or “the united States,” or even “a league of sovereign states,” and was invariably spoken of as a plural noun.
Would it make any difference if Arizona were another country? Besides the hassle of going through customs for this conference, it might make a lot of difference. It would depend on the institutions and culture. Without American culture, trust, legal system and so on, there might not be a resort here, there might not be a booming Tucson. And of course, it could be even better. And had Arizona or other states broken away, it would have changed how the rest of the country evolved along the way.
Here’s David Friedman’s theory of the size and shape of nations.
The ten most successful kleptocrats?
Directly below you will find a list of the most influential businessmen in history. For purposes of contrast, Ben Muse refers us to a list of the ten biggest political kleptocrats, here goes:
1. Mohamed Suharto President of Indonesia from 1967-98: US$15 to 35 billion
2. Ferdinand Marcos President of the Philippines from 1972-86 US$5 to 10 billion
3. Mobutu Sese Seko President of Zaire from 1965-97 US$5 billion
4. Sani Abacha President of Nigeria from 1993-98 US$2 to 5 billion
5. Slobodan Milosevic President of Serbia/Yugoslavia from 1989-2000 US$1 billion
6. Jean-Claude Duvalier President of Haiti from 1971-86 US$300 to 800 million
7. Alberto Fujimori President of Peru from 1990-2000 US$600 million
8. Pavlo Lazarenko Prime Minister of Ukraine from 1996-97 US$114 to 200 million
9. Arnoldo Alemán President of Nicaragua from 1997-2002 US$100 million
10. Joseph Estrada President of the Philippines from 1998-2001 US$78 to 80 million
It depends, of course, on what you count as stolen. Arguably some Saudis should make the list, though they claim to own the oil legitimately. Of course relative to gdp, Haiti’s Duvalier is a clear number one.
Addendum: Here is a good article on how Suharto did it.
Who are the most influential businessmen in history?
Joel Mokyr offers his list:
Matthew Boulton (1728-1809) †¢ Powered Industrial Revolution (Marginal Revolution’s first post was on Boulton and his friends.)
Andrew Carnegie (1835-1919) †¢ Carnegie’s Steel Built America
Walt Disney (1901-1966) †¢ Mega Media Blueprint
Henry Ford (1863-1947) †¢ Democratized Transportation
Edward H. Harriman (1848-1909) †¢ Proto-turn-around artist
Henry J. Kaiser (1882-1967) †¢ Fathered the HMO
Ray Kroc (1902-1984) †¢ Founding Father Of the Fast-Food Nation
William Lever (1851-1925) †¢ Invented “The Brand”
Henry Luce (1898-1967) †¢ Mass Media Pioneer
J. P. Morgan (1837-1913) †¢ Saved Wall Street
Alfred Nobel (1833-1896) †¢ Invented Dynamite, Holding Company
John D. Rockefeller (1839-1937) †¢ Spawned Global Energy Industry
Meyer Amschel Rothschild (1744-1812) †¢ International Financier Pioneer
Alfred P. Sloan (1875-1966) †¢ The Perfect Organization Man
Gerard Swope (1872-1957) †¢ Wove Capitalism’s Safety Net
Sakichi Toyoda (1867-1930) †¢ Smarter Machines Sage
Sam Walton (1918-1992) †¢ Perfected Mass Retailing
Aaron Montgomery Ward (1843-1913) †¢ “No Store” Retailer
Thomas J. Watson Jr. (1914-1993) †¢ Wired Corporate America
Josiah Wedgwood (1730-1795) †¢ Invented Celebrity Endorsements
A good list, but it fails to reflect just how much business has transformed our society. How about Zukor, Laemmle, Fox, or Cohn, some of the early founders of Hollywood? You could add the Medici, the unknown father of double-entry bookkeeping, or how about Gutenberg for that matter?
Here is the complete article. Thanks to Lynne Kiesling for the pointer.
My whereabouts
Tomorrow I will be back at UNESCO, attending another meeting on cultural diversity. Several countries, most notably France, would like UNESCO to have the power to overturn the free trade commitments made through the WTO and the EU for that matter. Did you know that Brussels has told France that it must allow books to be advertised on television, something previously forbidden?
France and others would like to cement the principle of the “cultural exception” through as many international organizations as possible, UNESCO included. Of course the exceptions would not stop at culture, nor would the rubric of culture remain modest. Along other lines, some of the African experts at the meeting have come out for “enforceable sanctions” against countries that do not do “everything possible” to protect their native and indigenous cultures. I think this means us. I wonder if all of these people also favored sanctions against Saddam Hussein’s Iraq. In addition to his better-known crimes, Saddam went to great efforts to destroy the culture of the so-called marsh Arabs, draining the marsh was only part of his nefarious agenda. In these meetings I am arguing for…well, if you don’t know…you haven’t been reading this blog for long enough.
The timing for this visit is less propitious than my last trip. Then the Parisians were talking up cultural diversity while banning headscarves in the schools. Now U.S. officials are squawking because the WTO is telling us we cannot ban on-line gambling. Here is Republican Congressman Bob Goodlatte, sounding like a Frenchman: “It’s appalling…It cannot be allowed to stand that another nation can impose its values on the U.S. and make it a trade issue.” The Bush administration is planning to appeal the ruling.
So I will be busy. My personal posts will continue, but at a lower level than usual. Alex and our excellent guest bloggers will be active, and I will be back in full force upon my return.