Marginal Revolution

Getting serious

Saudi Arabia's religious police have announced a ban on selling cats and dogs as pets, or walking them in public in the Saudi capital, because of men using them as a means of making passes at women, an official said on Wednesday.

...Othman said that the commission has instructed its offices in the capital to tell pet shops "to stop selling cats and dogs".

Here is the full story.  This is, of course, a net benefit for the offenders to date.  The newly created artificial scarcity increases the conversation value of the already owned animals and also confers a positive wealth effect on the wrongdoers.  Is it not better to stop xxxx by giving everyone a pet and thus eliminating its conversational value?  By the way, if this edict is enforced, we can expect an increase in the pet birth rate and also a greater number of abandoned pets.

The final question, of course, is how do you use a pet cat to make a pass at a woman?  I've heard of people walking their cats, but I expect it is not an easy experience.  To limit sex, cats should be subsidized, not taxed.  No?

John Cochrane on the Milton Friedman protest letter

Read John's response here (the original letter is here).  In my view the damning bit is this one:

...it is to me sadder still how atrociously written this letter is. These people devote their lives to writing on social issues, and teaching freshmen (including mine) how to think and write clearly.  Yet it’s awful.

Recommended for those who like polemic and mutual recrimination.

I thank a loyal MR reader for the pointer.

David R. Henderson asks

This is from the comments and in the context of the financial market bailouts:

"Why aren't you free-marketeer crusaders screaming your heads off?!"

My answer is that I have been. Reporters have interviewed me about it and sometimes they report my "screams" and sometimes they don't. Re Tyler's blase response, I'm reluctantly coming to the conclusion, after having read his site almost daily for over a year, that Tyler is not a free-market crusader. He's a first-rate economist, but his passion seems to be almost solely about the analytics rather than the policies.

Am I wrong, Tyler?

I would note a few points:

1. I have very much favored the "bailouts" to date.  I don't favor that they were necessary but of course that latter attitude may or may not be libertarian in its derivation.

2. My tone stems from my personality, namely that I rarely get mad.  And in any policy debate, I don't assume that the people on my side intellectually are somehow morally superior or more honest.  In any particular case I usually give that 50-50.  It's also worth noting that perhaps we shouldn't judge partisanship from tone, just as we shouldn't judge linguistic fluency from the quality of a person's accent (which we tend to do).

3. A good blog should be subversive and help you see the faults in the author's own positions.  Ask whether the blogs you are reading in fact provide that service.  Self-subversion ought also, in the long run, to benefit liberty and other important values.

4. I think very often in international terms, so I see even most left-wing Americans (e.g., Ezra Klein) as having a relatively similar world view to my own.  Why focus on the local political conflict when so many presuppositions are shared?  When it comes to all-important questions about "how should we live?" it may well be that Ezra and I are pretty close together.  We should attach greater value to those commonalities of perspective.

5. I am very libertarian compared to the American center but moderate compared to most libertarians.

I am not sure I have answered David's question.

Why did the HMO revolution fail?

Mark Thoma cites this passage from Paul Krugman:

During the 1990's it seemed, briefly, as if private H.M.O.'s could play that role. But then there was a public backlash. It turns out that even in America, with its faith in the free market, people don't trust for-profit corporations to make decisions about their health.

Read the whole link for a recap of Mark's debate with Arnold Kling.  In my view what people objected to was not the for-profit status of HMOs per se but rather that they could be told they can't get all the care they want.  That view will remain.  That's one reason why covering 45 million or so additional Americans will lead to rising rather than falling health care costs.

On the administrative expenses of private health insurers, that is, at best, a one-time savings and health care costs still will be rising.  It's also hard to argue that a) the really sick people are often denied care or coverage by private insurance, and b) we can pick up those same people and still lower total costs.  It's the sick people who account for most of the costs, at any margin, and most of those costs come from medical procedures.

As the possibility of a real Democratic majority draws closer, expect to see more and more cognitive dissonance on this issue.  There's a perfectly coherent case for greater government involvement based on the desire to spend more resources to alleviate the financial insecurity of many sick Americans.  But you are going to hear the "free lunch" version of the argument instead, based on the belief that the properties of American and European health care systems are somehow interchangeable at will.

That said, people on my side of the issue should admit that we could lower overall health care costs (or at least slow their rise) by having a true single-payer plan and putting most doctors on fixed salaries in small cooperatives, thereby altering their incentives to spend on wasteful capital expenditures.  (How many years would it take for costs to fall?)  That's not, however, what we'll be getting, so beware the bait and switch.  Under any plausible health care reform scenario, health care expenditures in America will rise rather than fall.  If only we had a betting market on this...

Addendum: Here is Arnold's more direct reply.  Here are related remarks from Megan McArdle.

The ancient Greek computational mechanism

We now know a little more:

After a closer examination of the Antikythera Mechanism, a surviving marvel of ancient Greek technology, scientists have found that the device not only predicted solar eclipses but also organized the calendar in the four-year cycles of the Olympiad, forerunner of the modern Olympic Games.

The device also had a likely connection with Archimedes.  Here is the full story.

Why blogs should cover some topics randomly

Think of a blog as competing with both Google and Wikipedia, among other aggregators.  If you knew you wanted to read about "the minimum wage," you could bypass Tyler and Alex and Google to the best entries (some of which might include us, of course).  But with Google and Wikipedia you must choose the topic.  A good blog writer can randomize the topic for you, much like a good DJ controls the sequence of the music.  Sometimes you might trust us more than you trust other aggregators, but we can't count on that and arguably the other aggregators improve at a rate faster than we do.

Flying puffin!

Sentences to fear

Covered bonds issued by "too big to fail" banks are basically equivalent to mortgage backed securities guaranteed by Fannie and Freddie.

Here is much more, though I cannot see that the credit of the United States government is in danger.  There is a) the printing press, and b) our location on the left side of the Laffer Curve.  The point remains that additional debt for the major banks, while arguably necessary, weakens the off-balance sheet position of our government.

Markets in everything, the riches of Japan once again

So much for fixed costs, this time it's weird drinks.  How about "Bilk": 70 percent beer, 30 percent milk?  That's only the beginning.  There's a cheese drink, desalinated seawater (hey, isn't that expensive?), placenta drink (made from swine placenta) and eel soda.  And if that's not enough for you, here is last year's list.  As I like to say, if you're not thinking about Japan every day, you've yet to wake up.

Why isn't Asian music more popular?

Going back to some old requests, Eric H., a loyal and perceptive MR reader and commentator, asks:

Why do the US (a wealthy country) and Africa (a poor continent) put out more influential modern music than Asia (a populated continent of both wealthy and poor extremes)?

Where do I start?

1. Most African music has scales very similar to those of European music and thus we are arguably considering a unified and indeed accessible style.

2. Many African musics emphasize rhythms and rhythm is arguably the most universal element of music and thus it is relatively easy to export.  American music has in this regard a strong African component, for obvious historical reasons.

3. The micro-tonal musics, as we find in India and the Middle East, don't spread to many countries which do not already have a micro-tonal tradition.  Cats wailing, etc., though it is a shame if you haven't trained your ear by now to like the stuff.  It's some of the world's finest music.

4. Many Asian musics, such as some of the major styles of China and Japan, emphasize timbre.  That makes them a) often too subtle, and b) very hard to translate to disc or to radio.  African-derived musics are perfect for radio or for the car.

5. African music is really, really good.  And America is really, really good at entertaining people.  It's an unstoppable alliance.

Artistic disintermediation

A small menagerie of new Damien Hirst pickled animals took a bow yesterday, including a new shark, a zebra, a calf with solid gold horns and hoofs valued at up to £12m, and even a unicorn - a white foal fitted with a resin horn, rather than an apparition from a fairytale.

All have been churned out by his small army of assistants this year for an auction at Sotheby's in September which will sell more than 200 pieces. The auction is predicted to raise £65m, comfortably setting a new world record for the artist, and blazing a trail which other artists will watch with interest, of bypassing the gallery and dealer system and going straight to auction.

Both the Gagosian Gallery, and Jay Jopling's White Cube, his American and British dealers, have given the auction their blessing, possibly through gritted teeth...

If you are a dealer this is big news and indeed bad news.  But why not?  Hirst doesn't need gallery publicity or buyer recruitment.  Since galleries tend to sell their best works to loyal repeat buyers ("why?" is a good question), this implies that "seniority" will matter less and less for assembling a good collection.  That favors foreign buyers and hedge fund types.  Here is the link.  Here is Felix Salmon's very good post on the economics of contemporary art.