Marginal Revolution

Best of 2007 lists

Here are the links to the lists, again courtesy of the awesome Rex Sorgatz.  Last year this link cost me a good $200.  Rex adds more to the list as the links pop up, so do revisit the site periodically.  Oddly I can't get this link to work on every computer or browser, I am not sure why not.  Thanks to Jason Kottke for the pointer.

Laissez-Faire Marriage

Should the state be involved in marriage?  Writing in the NYTimes professor of history Stephanie Coontz notes:

The American colonies officially required marriages to be registered, but until the mid-19th century, state supreme courts routinely ruled that public cohabitation was sufficient evidence of a valid marriage. By the later part of that century, however, the United States began to nullify common-law marriages and exert more control over who was allowed to marry.

By the 1920s, 38 states prohibited whites from marrying blacks, “mulattos,” Japanese, Chinese, Indians, “Mongolians,” “Malays” or Filipinos. Twelve states would not issue a marriage license if one partner was a drunk, an addict or a “mental defect.” Eighteen states set barriers to remarriage after divorce.

It's no accident that the state began restricting and intervening in the marriage contract at the same time as it was restricting and intervening in economic contracts.  It was of course the evil Oliver Wendell Holmes Jr. who dissented in Lochner v. New York and who also upheld forced sterilization laws in Buck v. Bell (writing that "three generations of imbeciles in enough.")  Economists don't like to talk about social externalities but the connection between economic and social regulation is very clear in the progressives.

I think it's time to restore freedom of contract to marriage.  Why should two men, for example, be denied the same rights to contract as are allowed to a man and a woman?  Far from ending civilization the extension of the bourgeoisie concept of contract ever further is the epitome of civilization.  Our modern concept of marriage, for example, is simply one instantiation of the idea of contract.

People will claim that this means a chaos of contracts for every form of marriage.  This is wrong factually and also conceptually misguided.  Factually, we already allow men and women to adjust the marriage contract as they see fit with pre-nuptials.  Moreover, different states offer different marriage contracts with some offering more than one type.  Partnerships of other kinds have access to all manner of contractual arrangements without insufferable problems. 

More importantly, the chaos of contracts argument is fundamentally misguided.  The purpose of contract law is to give individual's greater control over their lives.  To make contract law a restraint on how people may govern themselves is a perversion of the social contract.  To restrict people from accessing the tools of civilization on the basis of their sexual preference is baseless discrimination. 

It is time to restore freedom of contract to marriage,  Laissez-faire for all capitalist acts between consenting adults!

Thanks to Daniel Akst for the pointer.

My favorite things Honduran

1. The best known Honduran painter is Jose Antonio Velásquez, here is a typical image.

2. America Ferrara, who plays Betty in Ugly Betty, is of Honduran parents.  I like that show, I don't love it.

3. This guy did lots of scientific work, including the laying of some foundations for Viagra, and he married a Belgian princess.  I've yet to benefit from his existence.

Plus I would cite a few personal acquaintances, past and present, of whom I am very fond.  That's what I can think of folks, and I wouldn't have found #3 without Google.  This website assures us "There are famous people from Honduras," although the link to the list of them is broken.

I have also read one short story from Honduras, from an anthology of Latin American short stories; it is entitled "Malaria."

I might add I am very fond of airfares to Honduras; right now the roundtrip is cheaper than the one way shuttle to New York City.  And maybe the flight is quicker too, no holding patterns over LaGuardia!

Most of all I like places where no one else goes, and I expect this short weekend trip to be very worth its while.

Medicare for everyone?

Medicare spends billions of dollars each year on products and services that are available at far lower prices from retail pharmacies and online stores, according to an analysis of federal data by The New York Times. A comparison of Medicare figures with retail catalogs reveals dozens of instances of the program’s paying above-market costs.

For example, last year Medicare spent more than $21 million on pumps to help older and disabled men attain erections, paying about $450 for the same device that is available online for as little as $108. Even for something as simple as a walking cane, which can be purchased online for about $11, the government pays $20, according to government data.

These widespread price discrepancies, including those for oxygen services, have been noted in dozens of regulatory reports.

But when officials and politicians have tried to cut these costs, they have often encountered a powerful foe: the companies that sell these devices, who ask their elderly customers to serve, in effect, as unpaid lobbyists, calling and writing to their representatives in Congress, protesting at rallies, and even participating in political attacks against individual lawmakers who take on the issue.

Here is the full story.  You are correct to think that not all versions of a single-payer system need discourage innovation.  You are also correct to think this is what they look like.

Illegal immigrant fact of the day

Illegal immigrants from Mexico and other Latin American countries are 50% less likely than U.S.-born Latinos to use hospital emergency rooms in California, according to a study published Monday in the journal Archives of Internal Medicine.

Here is the link.

A plea for more anthropology of ideology

I've been pondering Daniel Davies's attempted takedown of Milton Friedman, or for that matter Jon Chait's book on supply side economics, and so I slip beneath the fold...

What strikes me is that these writers, and also their counterparts on the Right, see so little need to adduce anthropological evidence to characterize other people's views.  When it concerns the Laffer Curve, or global warming, or the correct measure of civilian deaths in Iraq, the concern is for the highest standards of evidence.  Yet the question of what other people "really believe" also can be treated in more or less sophisticated form, most of all with the tools of anthropology.  Web quotations are relevant, but there is no substitute for getting out there and speaking to those people, for a start.

I'd like to propose a new research convention.  Anytime a writer or blogger talks about what The Right or The Left (or some subset thereof) really wants or means, I'd like them to list their personal anthropological experience with the subjects under consideration.  Davies presents Friedman as a shill for the Republican Party; I'd like to know how many (public or non-public) conversations he has had with Friedman about the topic of the Republican Party.  I've been present for a few, and while I'm open to feedback from Davies, my guess reading his post is that he hasn't been there for any.  Yet he writes with a tone of certitude: "it's clearly not intellectual honesty that makes American liberals act pretend that Milton Friedman wasn't a party line Republican hack." 

Is it really true that "The ideological core of Chicago-style libertarianism has two planks. 1. Vote Republican.  2. That's it."?  And Davies's own quotation of Milton Friedman does not support his core claims; he simply asks us to believe that Friedman is lying.  I would ask Davies to apply the same standards of argumentation and evidence that he does to the Lancet study of Iraq or the many other topics he has written excellent blog posts about.

How many supply-siders has Chait talked to?  It might be a lot, but again I'd like to know.  Has he met with the people who write The Wall Street Journal Op-Ed page?  How many of them?  How many leading Republican donors and strategists does he know?  Did they really chat with him, or were they in controlled "interview mode"?  How motivated are they by supply-side doctrine?  What did those say who weren't so motivated?

How many intelligent pro-life Republicans do you know?  How many southern racist Republicans do you know?  Have they confided in you?  Do they trust you?  Do you really think you know what they believe?

I don't mean to suggest that such anthropological research will always yield sanitizing answers.  Nor do I believe that the Left is worse in ignoring the anthropology of ideology than is the Right. 

It is sad that anthropological research has such a low status among so many smart people.  It is fashionable to open up data sets for replication.  So let's do the same for research into ideology or even just proclamations about the ideology of others, especially those you disagree with.  Tell us how much field work you did, who you did it with, how much they trusted you, and what you wish you could have done but didn't.  That is easy enough in the on-line world. 

The demand for authenticity

Eric Jorgensen, a programmer at Microsoft, has invented PixelWhimsy, a computer program that allows toddlers to sit at a regular computer and bang away on the keys to create sounds and colors and shapes, but without damaging the computer.

Asmin Jalis, who also works at Microsoft and whose 2-year-old boy, Ibrahim, has been using PixelWhimsy, said his son liked it better than his toy computer. “We have a toy laptop for him, and he knows it’s a fake,” he said.

Or more generally:

Cellphones, laptops, digital cameras and MP3 music players are among the hottest gift items this year. For preschoolers.  Toy makers and retailers are filling shelves with new tech devices for children ages 3 and up, and sometimes even down. They say they are catering to junior consumers who want to emulate their parents and are not satisfied with fake gadgets.

Constructive suggestions about foreclosures

Francisco Torralba writes:

First of all, settle on a bankruptcy text and stick to it. The latest overhaul of the Bankruptcy Code took place as recently as 2005. Regulatory uncertainty inhibits lenders.

Second, lawmakers should give the two parties in a contract more leeway to renegotiate their loans. I applaud the congressmen’s proposals to allow modifications of the terms of the original loans, but they could go further. For example, they should allow converting 30-year adjustable rate mortgages (ARM) into 50-year fixed-rate mortgages.

The modifications could be proposed by the court, but then they should require consent from both mortgagee and lender. Two of the bills under consideration -- the ones by Senator Durbin (D-IL) and Representative Miller (D-NC) -- allow the bankruptcy court to modify the terms of the loan without restrictions, not even agreement in writing between the parties. Giving such power to the court has at least two effects. First, it tilts the balance towards the consumer -- in a free negotiation between mortgagee and bank, the latter would have the upper hand. Second, it increases the uncertainty of the bank's payoffs. Both effects reduce the supply of debt.

Congress should also modify the Code so that the least creditworthy borrowers have more incentives to file for Chapter 7 instead of Chapter 13.

Going beyond the current problems, better ex ante disclosure would be welcome. Most borrowers don’t understand 95 percent of the legal mumbo jumbo on their contracts. Mortgage applicants should be given worst-case scenario simulations of their monthly payments.

We could also set a floor on “teaser” introductory mortgage payments. Hybrid ARM's, for example, start out carrying a low, fixed rate. Two to five years later the interest rate resets to a higher, floating level. Option ARM's let the borrower initially make interest-only payments, minimum payments (often below the interest accrued), or fixed, low-rate payments, also until the first reset date. Any of those schemes make mortgages affordable, but only for the first few years. Legislation could provide, for example, that initial monthly payments never be below 80 percent of the expected payment after the first reset date.

Here is Francisco's blog, if you don't already know it.

Assorted links

1. How economists lose weight

2. Does it matter if leaders are female?

3. Cory Doctorow on what is wrong with Facebook

4. Gretchen Rubin on Inner Economist and how to get people to tell the truth

China Story of the Day

"Dad," said the 6-year old, "can we go to China?"

"Hmmm...maybe.  Why do you want to go to China?"

"That's where they make all the toys."