A lot of what constitutes “thinking like an economist” involves asking the right questions. Those questions typically involve looking for the incentives people face in a particular situation.
For instance, one response to inflation — a sustained increase in an economy’s general price level — is to think that making it illegal to charge more a fixed amount for any given product would solve the problem. That is, you see an outcome you don’t like, and without understanding why it is the way it is, you try to impose what you think is a better outcome. In the case of price ceilings, the consequence is chronic shortages.
Similarly, a common response to rising residential rents in some cities is to declare, “the rent is too damn high!” (In fact, there’s a political party in New York that actually calls itself The Rent Is Too Damn High Party.) This declaration is usually followed by a demand for regulations that would make it illegal to charge more rent than someone in authority thinks is necessary.
On the other hand, if an economist determines that rents are indeed too high in a district, she will then ask how they got that way. (The all-too-common answer — greed — doesn’t go far, because self-interest is no more a cause of high rents than air is a cause of fire.) In many cases, it’s because the supply of residential property has been artificially restricted — perhaps by building codes, minimum parking requirements, and landlords “warehousing” livable buildings in order to escape existing rent-control policies. Armed with some basic economic principles, she would try to figure out what choices people made that caused rents to rise and why they made those choices.
This is another way of saying that incentives matter.
Sandy Ikeda, “Incentives 101: Why good intentions fail and passing a law still won’t get it done”, The Freeman, 2014-11-13.
January 8, 2016
QotD: Thinking like an economist – incentives matter
January 7, 2016
QotD: The right to record police officers
Some advice for the beleaguered and backward states of Illinois, Massachusetts, et al.: If police are not obliged to ask our permission before recording their public encounters with us, then we should not be obliged to ask their permission before recording our public encounters with them. That states generally dominated by so-called progressives should be so insistent upon asymmetric police powers and special privileges for government’s armed agents is surprising only to those who do not understand the basic but seldom-spoken truth about progressivism: The welfare state is the police state.
Why Illinois Republicans are on board is another matter, bringing up the eternal question that conservatives can expect to be revisiting frequently after January: What, exactly, is the point of the Republican party?
Illinois is attempting to resurrect what the state’s politicians pretend is a privacy-protecting anti-surveillance law; in reality, it is the nearly identical reincarnation of the state’s earlier anti-recording law, the main purpose of which was to charge people who record police encounters with a felony, an obvious and heavy-handed means of discouraging such recording. Illinois’s state supreme court threw the law out on the grounds that police do not have a reasonable expectation of privacy when carrying out their duties, though police and politicians argued the contrary — apparently, some part of the meaning of the phrase “public servants” eludes them. The new/old law is, by design, maddeningly vague, and will leave Illinois residents unsure of which encounters may be legally recorded and which may not.
Here is the solution: Pass a law explicitly recognizing the right of citizens to record police officers. It is important to note that such a law would recognize a right rather than create one: Government has no legitimate power to forbid free people from using cameras, audio-recording devices, or telephones in public to document the business of government employees. The statute would only clarify that Americans — even in Illinois — already are entitled to that right.
Kevin D. Williamson, “Prairie State Police State”, National Review, 2014-12-10.
January 6, 2016
QotD: De-institutionalization and mental health
Look, part of the whole problem with the deinstitutionalisation of the mentally ill, which goes all the way back to the early seventies at least, and as far as theory is concerned probably a lot further, is that health professionals started, DELIBERATELY blurring the lines between mental illness and mental health.
Part of this was – I think – a genuine effort to make it possible for some people classified as “mentally ill” to be able to make a go of it in the community. A lot of new psychiatric drugs had been discovered which, while they didn’t heal, masked the symptoms of mental illness and therefore made it possible for these people to integrate in normal society – provided they would take their meds (more on that later.)
The other part – I know, my SIL took the mental-health portion of her MD in the late seventies – was the insane “equivalence brigade” which tried very hard to convince themselves that the US too did EXACTLY the same things the USSR did. Since the USSR put political dissenters in mental hospitals, then the people in US hospitals MUST be also political dissenters. This was hard to prove, since the Soviet system provided ideological support for mental treatment of dissenters: i.e. the Marxist system was perfect, so anyone disagreeing must be mad, while the American system mostly tried to get people off the streets who would do harm to themselves and/or others. However the medical profession found their justification in an upside-down of the Marxist system. Since Capitalism was bad for humans and other living things, then everyone who went mad under capitalism were, ipso facto, political dissenters. So, if you happened to be a woman who liked to throw rocks at strangers and go into bizarre monologues on the subject of cabbage, you weren’t mad, you were a feminist protesting male aggression.
Now I have no proof this was intentional or a coordinated AGITPROP operation. It’s entirely possible it was (merely) the predictable mix of ill-intentioned agents and well-intentioned idiot fellow travelers.
However the end result was making people too crazy to live alone into political victims and incidentally to give the USSR room to claim the capitalist system created homelessness.
Sarah A. Hoyt, “I’m Not Crazy, I’m Just A Little Unwell – A blast from the past post 10/12”, According to Hoyt, 2015-10-12.
January 5, 2016
January 4, 2016
QotD: The Science Czar
I have noticed a tendency of mine to reply to arguments with “Well yeah, that would work for the X Czar, but there’s no such thing.”
For example, take the problems with the scientific community, which my friends in Berkeley often discuss. There’s lots of publication bias, statistics are done in a confusing and misleading way out of sheer inertia, and replications often happen very late or not at all. And sometimes someone will say something like “I can’t believe people are too dumb to fix Science. All we would have to do is require early registration of studies to avoid publication bias, turn this new and powerful statistical technique into the new standard, and accord higher status to scientists who do replication experiments. It would be really simple and it would vastly increase scientific progress. I must just be smarter than all existing scientists, since I’m able to think of this and they aren’t.”
And I answer “Well, yeah, that would work for the Science Czar. He could just make a Science Decree that everyone has to use the right statistics, and make another Science Decree that everyone must accord replications higher status. And since we all follow the Science Czar’s Science Decrees, it would all work perfectly!”
Why exactly am I being so sarcastic? Because things that work from a czar’s-eye view don’t work from within the system. No individual scientist has an incentive to unilaterally switch to the new statistical technique for her own research, since it would make her research less likely to produce earth-shattering results and since it would just confuse all the other scientists. They just have an incentive to want everybody else to do it, at which point they would follow along.
Likewise, no journal has the incentive to unilaterally demand early registration, since that just means everyone who forgot to early register their studies would switch to their competitors’ journals.
And since the system is only made of individual scientists and individual journals, no one is ever going to switch and science will stay exactly as it is.
Scott Alexander, “Reactionary Philosophy In An Enormous, Planet-Sized Nutshell”, Slate Star Codex, 2013-03-03.
January 3, 2016
QotD: Another ten selected Terry Pratchett quotes
41 Most gods throw dice, but Fate plays chess, and you don’t find out til too late that he’s been playing with two queens all along.
42 Pets are always a help in times of stress. And in times of starvation, too, of course.
43 Captain Quirke was not actually a bad man; he didn’t have the imagination; but he dealt more in the generalised low-grade unpleasantness which slightly tarnishes the soul of all who come into contact with it – rather like British Rail.
44 Goodness is about what you do. Not what you pray to.
45 The intelligence of that creature known as a crowd is the square root of the number of people in it.
46 They say a little knowledge is a dangerous thing, but it’s not one half so bad as a lot of ignorance.
47 Time is a drug. Too much of it kills you.
48 It occurred to me that at one point it was like I had two diseases – one was Alzheimer’s, and the other was knowing I had Alzheimer’s.
49 I commend my soul to any God that can find it.
50 So much universe, and so little time.
Selected by Martin Chilton for The Telegraph, 2015-08-27.
January 2, 2016
QotD: Where did all those helicopter parents come from?
One of the things you might notice about novels from the 1950s and 1960s is how many of the affluent people in them are engaged in trades like selling insurance, manufacturing some dull but necessary article, or running a car lot. These people are rarely the heroes of the novel (even then, writers found it much easier to imagine themselves as doctors or lawyers or, for that matter, as rough-hewn working-class types than as regional office-supplies distributors). But it is telling that those novelists took for granted that the writers and professionals would be intermingled with the makers and sellers, something that comes across as distinctly odd to the residents of the modern coastal corridors. Few of my friends even run a budget outside their own households, much less a profit and loss statement, and very few indeed have ever gone on a sales call.
The change in our novels reflects a change in our economy: the decline of manufacturing; the rise in the number and remuneration of professional jobs; the increase in the size of service firms; and the resulting shift toward salaried positions rather than partnerships or sole proprietorships. As a result of these changes, the upper middle class has found itself in a curious bind. In some ways, its economic fortunes are better than ever: They make more money, more reliably, than they used to. But because they are employees rather than business owners, they have a very limited ability to pass their good fortune onto their children.
A parent who had built a good insurance business in 1950 had a valuable asset that he could hand over to his sons. As long as they put a full day in at the office, they too would be able to take home a good living. That calculation applies across a broad range of manufacturing, retail and service businesses that used to form the economic bulwark of the prosperous middle class.
An MBA, however, is not heritable. Neither is a law degree, a medical degree, or any of the other educational credentials that form the barriers to entry into today’s upper middle class. Those have to be earned by the child, from strangers — and with inequality rising, the competition for those credentials just keeps getting fiercer.
Of course, parents have always worried about their kids making it; small family firms were often riven by worries about Uncle Rob’s ability to settle down to the business. But those were worries about adults, at an age when people really do settle down and become less wild. These days, we’re trying to force that kind of responsibility onto teenagers in their freshman year of high school. Of course, we don’t tell them that they need to earn a living; we tell them they need to get into a good college. But the professionalization of the American economy means that these are effectively the same thing for large swathes of the middle class.
Many teenagers — and I include myself at that age — do not quite have the emotional maturity and long-term planning skills for the high-stakes economic competition they find themselves engaged in. So their parents intervene, managing their lives so intensely that their child doesn’t have much opportunity to, well, act like a child instead of a miniature middle-aged accountant. Since the professional class can’t pass down its credentials, it passes down its ability to navigate the educational system that produces the credentials. The more inequality widens, the more obsessively they will manage their kids through school — and the more economic mobility will stagnate, since parents outside the professional class will have grave difficulty replicating this feat.
Megan McArdle, “What Really Scares Helicopter Parents”, Bloomberg View, 2015-11-30.
January 1, 2016
Georgia: the birthplace of wine
Michael Cecire sings the praises of Georgian wine:
“America’s New Hot Wine,” blared a Washington Post headline. “Older and Wiser,” counsels the venerable Financial Times. “The next big food and wine destination,” offers Mashable, the beating heart of the web 2.0 zeitgeist. For Georgia and its ancient winemaking tradition, the plaudits have recently come thick and fast.
And for good reason: Georgian wine is generally superb. The country boasts an embarrassing bounty of unique native grape varietals, and ancient methods that continue to confound and delight the winemaking world. And in Georgian wine, geopolitically aware connoisseurs are offered a fine pairing for their onglet a l’echalotte (for me, I recommend the dark, fierce depth of the saperavi varietal) that doubles as a kind of repudiation of Russian militarism, while giving nods to a steadfast and dependable Western friend.
But Georgia’s wine is about far more than rich tastes or a convenient reflection of a simmering contemporary conflict. Georgia’s relationship with wine is deeply, nearly indescribably old and admixed into the very core of its culture. And it’s that ancient heritage and long history that imbue it with geopolitical significance even today.
Georgia is the birthplace of wine. According to recent archeological evidence, proto-Georgian inhabitants cultivated grapes and made wine as far back as 6000 BC. Some linguists even suggest the Georgian word for wine, ghvino, is what gave wine its name. Just as striking, many of the same methods that early Georgians used to make their wine — such as using wax-lined earthenware vessels known as qvevri buried in the ground — are traditions that continue even today. Qvevri winemaking is not only historically interesting (UNESCO recognized it in its list of intangible cultural heritage in 2013), but is increasingly dealing shocks to oenophiles for the complexity and varied tones of its wines.
Georgia’s wine is not only the national drink of choice, but a symbol of Georgian identity and civilizational continuity. There are not many places where grapes are seen tended and growing in central districts, on apartment block balconies, in storefronts, and even from dingy iron-doored garages, but the Georgian capital Tbilisi is festooned with vines. Almost every family, it seems, grows grapes and makes their own wine. Indeed, some of the very best vintages in Georgia may never come from a decanter, but from the spout of a repurposed Fanta bottle drawn from a makeshift marani, or rustic Georgian wine cellar.
QotD: When capsaicin invaded America
Consider spicy-hot food — and consider how recent it is as a mainstream phenomenon in the U.S. In 2002 many of us cheerfully chow down on Szechuan and Thai, habaneros and rellenos, nam pla and sambal ulek. Salsa outsells ketchup. But it wasn’t always that way.
In fact it wasn’t that way until quite recently, historically speaking. I’ve enjoyed capsaicin-loaded food since I was a pre-teen boy in the late 1960s; I acquired the taste from my father, who picked it up in South America. In those days our predilection was the peculiar trait of a minority of travelers and a few immigrant populations. The progression by which spicy-hot food went from there to the U.S. mainstream makes a perfect type case of cultural assimilation, and the role and meaning that the stuff has acquired on the way is interesting too.
(Oh. And for those of you who don’t understand the appeal? It’s all about endorphin rush, like a runner’s high. Pepper-heads like me have developed a conditioned reflex whereby the burning sensation stimulates the release of opiate-like chemicals from the brainstem, inducing a euphoria not unlike a heroin buzz. Yes, this theory has been clinically verified.)
Baseline: Thirty years ago. The early 1970s. I’m a teenager, just back in the U.S. from years spent overseas. Spicy-hot food is pretty rare in American cuisine. Maybe you’d have heard of five-alarm chili if you’d lived in Texas, but chances are you’d never have actually eaten the stuff. If you’re from Louisiana, you might have put Tabasco sauce on your morning eggs. Aside from that, you wouldn’t have tasted hot peppers outside of a big-city Chinatown.
[…]
This probably evolved out of the tradition, going back at least to the late 1940s, of defining barbecue and chili as what an anthropologist would call a “men’s mystery”. Despite the existence of male professional chefs and men who can cook, most kinds of domestic cooking are indisputably a female thing — women are expected to be interested in it and expected to be good at it, and a man who acquires skill is crossing into women’s country. But for a handful of dishes culturally coded as “men’s food”, the reverse is true. Barbecue and chili top that list, and have since long before spicy-hot food went mainstream.
For people who drive pickup trucks, spicy-hot food went from being a marked minority taste to being something like a central men’s mystery in the decade after 1985. I first realized this in the early 1990s when I saw a rack of 101 hot-pepper sauces on display at a gun-and-knife show, in between the premium tobacco and the jerked meat. There’s a sight you won’t see at a flower show, or anywhere else in women’s country.
The packaging and marketing of hot sauces tells the same story. From the top-shelf varieties like Melinda’s XXX (my favorite!) to novelty items like “Scorned Woman” and “Hot Buns”, much of the imagery is cheeky sexiness clearly designed to appeal to men.
Nor is it hard to understand why the association got made in the first place. It’s considered masculine to enjoy physical risk, even mostly trivial physical risks like burning yourself on a sauce hotter than you can handle. Men who like hot peppers swap capsaicin-zap stories; I myself am perhaps unreasonably proud of having outlasted a tableful of Mexican college students one night in Monterrey, watching them fall out one by one as a plate of sauteed habaneros was passed repeatedly around the table.
There’s a sneaky element of female complicity in all this. Women chuckle at our capsaicin-zap stories the same way they laugh at other forms of laddish posturing, but then (as my wife eloquently puts it) “What good is a man if you rip off his balls?” They leave us capsaicin and barbecue and other men’s mysteries because they instinctively grok that a certain amount of testosterone-driven male-primate behavior is essential for the health of Y-chromosome types — and best it should be over something harmless.
Eric S. Raymond, “The capsaicinization of American food”, Armed and Dangerous, 2002-11-02.
