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Geek vacation
1. Starring us, Alex is (correctly) judged the best dressed.
3. Linguistic abilities of the Presidential candidates; lots of Spanish but not just.
4. Half the bottled water in Beijing is fake?
5. Heterodox economics, covered by the NYT; like Don Boudreaux I am still waiting for someone to defend trade barriers across the 50 states.
6. Bet on whether women really do talk more than men
Posted by Tyler Cowen on July 11, 2007 at 09:42 AM in Web/Tech | Permalink
Comments
Re 5: I remember from living in Austin that there was a "Buy Greater Austin" movement that encouraged people
to buy goods only from the Greater Austin area. So, there they were defending a sort of domestic
protectionism. Of course, you've gotta laugh at that -- even from the *name* you can see how shaky the
ideology is. I mean, why buy *Greater* Austin? It's like when formulating the platform, they were thinking:
"Oh, we're not like *those* weirdo cranks who think you should *only* buy from within the Austin city
limits. That would just be ridiculous! To only buy from that narrow little region at the exlcusion of
the surrounding communities! We *completely* understand the case for only buying from *Greater* Austin ...
but not an inch outside!"
Posted by: Person at Jul 11, 2007 9:58:00 AM
Ithaca, NY created its own currency in order for money "to stay in our region to help us hire each other. While dollars make us increasingly dependent on transnational corporations and bankers, [Ithaca]HOURS reinforce community trading and expand commerce which is more accountable to our concerns for ecology and social justice."
Ithaca hours are available for purchase with US dollars. I think Itchy and Scratchy World has also instituted a similar system (although their's is fun).
Posted by: josh at Jul 11, 2007 10:11:51 AM
I'm still waiting to see an explanation by a libertarian about how the issue of poor quality and dangerous products from China fits into the theory that firms self interest prevents this from happening and that there is no need for safety and health regulations.
Posted by: spencer at Jul 11, 2007 10:23:27 AM
It sure appears that they are avoiding the question and pretending it does not happen.
Posted by: spencer at Jul 11, 2007 10:25:30 AM
OK Spence, you answer Tyler's question and then we'll get around to the issue of Chinese product safety. I think the libertarian argument about product safety is that if firms are selling poison then consumers face strong incentives to avoid those firms. Therefore those firms tend to go away unless they shape up. I guess you could have some sort of super faith about government regulation of food and product safety in general but for me Ill stick with Whole Foods and Underwriters Laboratories. Why so cranky Spencer?
Posted by: John Pertz at Jul 11, 2007 10:33:45 AM
One reason women are perceived to talk more than men is similar to the perception that any ratio of men to women which is more than 2/3 -1/3 is perceived as being female dominated. I imagine if they measure use of space you'd come up with the same ratio. So if women talk as much as men, they are perceived as dominating the conversation, whereas if they carry a third of the conversation, it is probably perceived as "just right."
Posted by: Pat Mathews at Jul 11, 2007 10:49:02 AM
Naturopaths tend to be "shut out" of medical schools. Maybe there are reasons for the inability of the heterodoxies to get a hearing...
Posted by: Bill at Jul 11, 2007 10:56:53 AM
"and the federal deficit is a meaningless term because the federal
government prints money in the first place".........
Two Words. Bond Traps.
Posted by: at Jul 11, 2007 11:10:58 AM
Here is quote from the WSJ article on Caplan:
"For him, democracy fails because it doesn't produce the most economically efficient results. He would prefer to see independent experts shape policy or to put more power into the hands of the unelected solons on the Supreme Court.
Such a strategy might be more efficient, but then again, American democracy has never been about efficiency. Hamilton and Madison (conspicuously absent in "The Myth of the Rational Voter") consciously set out to create an inefficient system that let one faction counter the other."
So, does the critic not realize that he's conflating two different concepts of efficiency. Caplan is complaining that democracy fails because it doesn't produce economically efficient results. (Presumably he's talking about something along the lines of Pareto-efficiency.) The critic responds by talking about how Hamilton and Madison wanted democracy to be inefficient. But the sense of "inefficient" here isn't "non-Pareto-optimal", but something "slow and difficult in getting legislation passed".
I can't believe this crap gets posted in the WSJ when it wouldn't merit a C in a high school social studies class.
Posted by: J. at Jul 11, 2007 11:15:06 AM
Spencer, are you trying to compare the incentive structure of a non-state owned firm with state-owned firms in a nation going through an industrial revolution?
Posted by: Jake at Jul 11, 2007 11:27:18 AM
I would have really liked to see a picture of Tyler's office...
Posted by: CD at Jul 11, 2007 11:28:14 AM
Isn't it odd for an article to point out the travails of those economists brave enough to challenge orthodoxy to cite tenured faculty at Harvard, Princeton, and UC-Berkeley (including a former vice chairman at the Fed) as among victims of the mainstream's supposed intolerance.
C'mon now. Card became well-known among economists because of his work, primarily because that work challenged prevailing wisdom. His complaint is what? Having to suffer through disapproving stares from senior faculty while sipping exploitation-free coffee at one of Berkeley's sunny cafes?
(I don't mean to pick on Card himself, who may well be a nice guy, but just to suggest the article lacks a little perspective.)
Posted by: Mike KP at Jul 11, 2007 11:29:15 AM
Maybe someone will defend them once someone calls for them
Posted by: James at Jul 11, 2007 11:41:16 AM
spencer,
First quality: People go for the poor quality because they choose to do so. Probably they are willing to sacrifice some quality to get the product at a fraction of the price of the high-quality version. Let's face it - today, people are well aware that the Chinese products sold in Walmart will not _on average_ have the same quality as top-notch brand products (although sometimes they actually do). It's not an informational problem on average. People have enough experience with goods sold in Walmart, and shopping there is a regular and repeated activity. But the price difference is mostly what makes people choose the cheaper version.
Surely, you would find anecdotal evidence about how a particular product was worse than what was expected. But you always find deviations from the average - in both directions (but the positive suprises simply don't make the news). Europeans always wonder how the generous returns policy in the retail business can work in the U.S. Well, if the Chinese products systematically underperformed in terms of people's expectations about the quality, retailers would be overloaded by returns. This does not happen - people apparently don't mind lower quality given the lower price.
And now risks: Let's put it into perspective. There are about 40,000 deaths from car accidents every year in the U.S. How many people died, or were seriously harmed by low quality products? However you exacerbate the problem, it will be a negligible number compared to those 40,000 dead on the streets. So here, people are simply evaluating risks correctly - because if they leaned away from the products which are so dangerous (in your view), they would have to stop driving in the first place. Today, the highest risk in buying any possible product is actually in driving to the supermarket.
I'm not saying that it's OK that people get harmed by some products. The problem is in the cost of regulation. If you wanted a perfect guarding system, it would cost an infinite amount of money. So it's always a cost-risk tradeoff. Today, 99% of the risks coming from potentially hazardous products are eliminated by the market. The FDA and other regulatory bodies sometimes help, but the marginal cost of saving one life with regulations is of orders of magnitude higher than for instance marginal cost of saving one life by making roads safer, or by investing into health research.
It is not firms' interest to create a product that is 100% safe, simply because such a product cannot exist by definition. But comments like the recent infamous column by Paul Krugman blaming Milton Friedman for food poisonings are beyond any reason. The spinach (was it spinach?) producers were definitely substantially punished by the loss in demand created by the public scare. And you can bet that producers do not want to face such consequences very often.
Posted by: pinus at Jul 11, 2007 11:54:24 AM
Quote from the article on Heterodox Economists...
[Dani Rodrik, an economist at the Kennedy School of Government at Harvard, for instance, said, “I fall into the methods of the mainstream, but not the faith,” which he defines as the belief that more markets and free trade are always good and government regulation is always bad...]
That statement disappoints me, because I feel it’s a gross exaggeration. I don't think I've ever read or heard an economist say that more markets are always better than government regulation. I learned about the concept of market failure in Econ 101... doesn’t everybody? I’d be shocked if 99% of economists didn’t concede that there are at least some cases in which a government solution may prove optimal.
There’s a big difference between the statements “market solutions are almost always superior to government regulation” and “market solutions are always superior to government regulation”. I think the former is much closer to what the Economists I’ve come in contact with believe.
Posted by: Whit Stevens at Jul 11, 2007 11:56:50 AM
There's a glass company that advertises on the radio here in Boston, and in the ads they say that you should use them instead of other companies because they use local people to replace your windshield. It's somewhat hysterical when they're saying, in so many words, "who knows who could be changing your windshield--they could be from Ohio!" Every time I hear that it makes me chuckle thinking of how someone can mess up installing your windshield because he's from Ohio.
Posted by: Hei Lun Chan at Jul 11, 2007 12:41:46 PM
I understand the point, Tyler, but there is a very, very big difference between free trade within a nation and free trade globally.
1) Relatively standard environmental and labor regulations
2) Free movement of labor across states
3) A country is (rightly or wrongly) seen as a "community"
The economics certainly supports free trade globally, but I don't think it's inconsistent to oppose free trade across nations and argue for free trade across states.
Posted by: cure at Jul 11, 2007 1:17:46 PM
pinus -- what is the source of your statement that 99% of risks are eliminated by the market?
Were the growers of the spinach actually hurt and if so how did the damage compare with the cost of assuring that the spinach was not dangerous?
You seem to be making a lot of factual claims.
Can you support any of them?
Posted by: spencer at Jul 11, 2007 1:20:12 PM
Two Words. Bond Traps.No, Mister Bond. I expect you to suffer hyperinflation.
Posted by: triticale at Jul 11, 2007 2:37:43 PM
My vote for most disingenuous quote:
“Economists can’t pretend that the consensus for free markets and free trade that existed 30 years ago is still here,” said Robert B. Reich, a public policy professor at Berkeley who served in President Bill Clinton’s cabinet.
Anyone who was around at that time should know that Robert Reich can't pretend he was part of that consensus 30 years ago.
Whit: It might help for you to realize, if you don't already, that the NY Times is not a vehicle for conveying news, it's a vehicle for telling stories. Stories are more interesting with straw man representations of the characters rather than the nuances and continua that can spoil a good plot.
Posted by: M. Hodak at Jul 11, 2007 3:21:56 PM
On the one hand the NYTimes sez:
David Card and Alan B. Krueger, an economist at Princeton, found that contrary to what free-market theory predicts, employment actually rose after an increase in the minimum wage.
And on the other:
“Economics is insufficiently scientific,” Alan Blinder said. “Mathematics may be useful, but mathematics is not scientific. It doesn’t generate refutable hypotheses.”
I assuming that he means the mathematics economists use. Otherwise, the second half of the quote is a non-sequiter of numbing grossness. But But but!!! How is both possible for free-market theory to make predictions, as indicated in the first quote, while also at one and the same time be incapable of generating "refutable hypotheses." Heterodoxies! It's gotta be one or the other. It can't be both. Even though it makes your case look stronger.
Posted by: Rue Des Quatre Vents at Jul 11, 2007 3:30:57 PM
The language log claims Spanish for Ron Paul, but if you follow the 'source' link it shows the resume of a restaurateur of the same name, not the politician. Oops!
Posted by: bbartlog at Jul 11, 2007 3:31:01 PM
"David Card and Alan B. Krueger, an economist at Princeton, found that contrary to what free-market theory predicts, employment actually rose after an increase in the minimum wage."
I guess the NY Times forgot this part
"They also found that the AER published the paper, which turned out to suffer from massive sample selection issues due to the survey technique that Card and Krueger used. Coincidentally, the editor of the AER at the time had an office right next to Krueger's."
They may be great economists for other reasons, but Card and Krueger are full of it on this one. They pretend to be outsiders when they actually got a very poorly done paper published in the top professional journal precisely because of their insider status.
Posted by: Keith at Jul 11, 2007 3:57:50 PM
Ron Paul wears many hats.
Posted by: Christopher at Jul 11, 2007 3:58:58 PM
Beware a man with two first names.
Posted by: fustercluck at Jul 11, 2007 6:21:24 PM
