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The Nude Deal
Larry Flynt's plea for a porn stimulus plan has attracted much ridicule. Nevertheless, during the thirties burlesque was part of FDR's National Recovery Administration. Here's Jonathan Bean at The Beacon on the history.
The National Recovery Administration (NRA) was the first New Deal effort at recovery. The agency mandated that all industries draft “Codes of Fair Competition” to benefit business and labor. NRA codes — all 700 of them –corporatized the entire economy. Wage and price fixing was o.k. as the experimenters rid themselves of old superstitions that price fixing was somehow harmful to Mrs. Consumer. As long as everyone put in the “fix,” all would be well. The Supreme Court disagreed and ended the experiment in May 1935 (Schechter v. United States).
Yet there was an upside to the code-making. It made Americans realize how complex the economy had become by 1933. After all, there were codes for the Dog Food Industry (Code 450), Curled Hair Manufacturing and Horse Hair Dressing Industry (Code 427), Shoulder Pad Manufacturing (Code 262), and the Burlesque Theatrical Industry (Code 348). The latter limited burlesque dancers to four strip teases per evening. The goal was to spread the work, and it simply wasn’t fair that the pretty girls got to strip more than the other gals.
Posted by Alex Tabarrok on January 12, 2009 at 07:35 AM in History | Permalink
Comments
Chris Dillow is worth reading on this topic
Posted by: Luis Enrique at Jan 12, 2009 7:43:03 AM
Yet there was an upside to the code-making.
It made Americans realize how complex the economy had become by 1933.
What do you think it will take to make us realize how much
MORE complex the economy is in 2009?
Posted by: Superheater at Jan 12, 2009 7:46:20 AM
What's the argument against this? Does it not have the same Keynesian multipliers?
Can Keynesian theory distinguish between stimulating the porn industry vs stimulating some other industry?
If it can't, doesn't that make it clear that the money is being politically allocated and economic theory really has nothing to do with it?
Posted by: Marcus at Jan 12, 2009 8:41:02 AM
"What do you think it will take to make us realize how much
MORE complex the economy is in 2009?"
Our economy is not complex. Our problem is simple. "greedy corporatists".
Posted by: Jay at Jan 12, 2009 8:41:15 AM
One thing I sort of suspect is that the complexity of the economy increases at a slower rate than computing power. I don't think we'll be there for some time but I think the time will probably come when it would be possible to centrally plan an economy and get results better than or equal to market results as far as hedonic outcomes.
Posted by: Michael Foody at Jan 12, 2009 9:12:59 AM
I'm more in favor of a porn industry bailout than an auto industry bailout. At least the porn industry has been a technological driver over the past 30 years. What benefit has the auto industry given us technologically, aside from cup holders and in-vehicle DVD players to anesthetize the kids?
Posted by: Grant Austin at Jan 12, 2009 9:16:22 AM
Print pornography has been hurting for years. The Internet has done the damage to media like Hustler far more than this downturn. If anything, I suspect that for some people, porn consumption is up during downturns insofar as it's used to escape from the difficulties of being unemployed.
Posted by: jason voorhees at Jan 12, 2009 9:31:53 AM
Larry Flynt's plea for a porn stimulus plan has attracted much ridicule.
Hello? It was a joke!
Posted by: RCinProv at Jan 12, 2009 9:32:38 AM
Michael, unless you are talking AI, someone has to program the computers. No amount of computing power will solve that problem.
Posted by: Cliff at Jan 12, 2009 9:34:28 AM
Is where the term 'naked greed' comes from?
Posted by: The other Eric at Jan 12, 2009 10:00:28 AM
Yeah I agree with RCinProv. If you look at some of the quotes from Flynt and others, I think they are doing a modern-day Petition of the Candlemakers. Don't get me wrong, they'd probably deposit the check if Congress wrote one, but I think they were mostly doing it for the publicity and to be funny.
Posted by: Bob Murphy at Jan 12, 2009 10:15:23 AM
It was my understanding, having read Laura Knipkis's book Bound and Gagged, that Hustler has been in the red for years, and the Larry Flynt was publishing the magazine out of sheer spite. He has never run tobacco ads as a matter of general principle, and liquor advertisers wouldn't touch the magazine with a ten foot pole. The type of advertising that is run in the magazine just doesn't pay the bills, nor is the subscriber base large enough to pay the bills.
Flynt's secret? He makes more money as a magazine distributor, and has applied his knowledge of catering to a speciality audience, to speciality topics of a less prurient nature.
Posted by: Mark at Jan 12, 2009 10:35:56 AM
Cliff, it really depends on what the problem is. Checkers was recently solved, is not a terrifically difficult programing problem but it has 500 billion possibilities, and it took many computers running since 1989 to solve. So I am talking about 'solving' of a huge dynamic optimization problem with an amazingly large number of variables and a huge data set. This sort of problem might lend itself to a brute force 'solution'. Now also keep in mind that markets aren't perfect, they are just the best tool available (by far) for solving certain types of problems, it isn't so out there to assume that this will not always remain the case.
Posted by: Michael Foody at Jan 12, 2009 10:52:48 AM
" ...but I think the time will probably come when it would be
possible to centrally plan an economy and get results better
than or equal to market results as far as hedonic outcomes."
So long as the people controlling the programmers/planners get
to define what "better" means ... we've always been able to do
this. But that has always been the fundamental problem.
You and I couldn't possibly agree on what defines a successfully
"planned" economy ... because by my view and philosophy of life,
such an thing is nonexistant, a oxymoron. No one can adequately
define for me my supplies and demands except me (and sometimes I
don't do such a hot job of it either! I.e., I change my mind
about something.)
Now perhaps you are speaking with regard to some gargantuan
utilitarian average ... but on a long enough average, we're
all dead. Utilitarian theory, inherently Stalinist, when
applied to criminal law, says it never matters if we catch the
guilty for punishment, so long as we punish somebody for the
crime. The deterrent function is accomplished either way; inducing
fear of legal transgression. The injustice to the punished is
overwhelmed by the utility of the deterrence.
Thanks, but no thanks. I'll pass on central planning.
Posted by: ruralcounsel at Jan 12, 2009 1:21:54 PM
Michael,
I suggest you talk to a few economist who use the tools of Complexity Science before you get too optimistic. For a pretty easy to read primer see "The Origin of Wealth".
The trouble is one does not "solve" a complex system like one can solve the sorts of closed form analytical problems you might see in a graduate Macro class. Complex systems may not reach equilibrium in the way we would like in order to "solve" for the proper parameters of a centrally run economy.
What Complex Systems analysis can do is help us gain further insights into how the real economy works and possibly design better institutions and regulations that will stop cascades from happening.
Posted by: goodnessOfFit at Jan 12, 2009 1:23:45 PM
I think ruralcounsel is right here too. We do run up against Arrow's theorem pretty quickly even in current neo-classical Welfare Economics. Imagine the problems with as many parameters as you would have in a Mass Macro model.
Never-the-less I do think Michael that you are right that there will be tremendous gains to our understanding of Macro as economist embrace the sorts of computer modeling that are now mainstream in the Hard sciences.
Posted by: goodnessOfFit at Jan 12, 2009 1:27:22 PM
Flynt makes a conservative political point every few years. He decided that the bailouts were ridiculous, hence the story.
Posted by: rhhardin at Jan 13, 2009 6:35:36 PM
