There are women out there who still see dressing to please a man as some sort of Stockholm syndrome thing — participating in your own (flouncy, spaghetti-strapped) subjugation. So, it’s possible that those advising you “Don’t change for a man!” are just trying to help you be a modern and empowered woman. Of course, one could argue that actually being a modern and empowered woman means you don’t have to dress like you’re hoping to get a call to clean out a sewer line.
Maybe those in your advice coven really do believe they’re acting in your best interest. Maybe. Social psychologists Roy Baumeister and Jean Twenge report that it’s widely believed that men drive the “cultural suppression of female sexuality” — which could include shaming women for how they dress. However, in reviewing the research, they make a persuasive case that it’s primarily women (often without awareness of their motives) who work to “stifle each other’s sexuality.”
This is right in keeping with research on female competition. While men fight openly — “Bring it! I will ruin you!” — women take a sneakier approach. As female competition researcher Tracy Vaillancourt explains it, women fight for their interests using “indirect aggression,” like gossip, mean looks, disparaging remarks, and other underhanded tactics to “reduce the mate value of a rival.” Underhanded tactics? You know — like suggesting you’re selling out womankind if you wear a skirt or winged eyeliner.
Amy Alkon, “Casual Coroner”, The Science Advice Goddess, 2016-09-20.
May 15, 2019
QotD: Women competing against other women
April 4, 2019
March 3, 2019
QotD: Four ways to corporate monopoly
1. Proprietary technology. This one is straightforward. If you invent the best technology, and then you patent it, nobody else can compete with you. Thiel provocatively says that your technology must be 10x better than anyone else’s to have a chance of working. If you’re only twice as good, you’re still competing. You may have a slight competitive advantage, but you’re still competing and your life will be nasty and brutish and so on just like every other company’s. Nobody has any memory of whether Lycos’ search engine was a little better than AltaVista’s or vice versa; everybody remembers that Google’s search engine was orders of magnitude above either. Lycos and AltaVista competed; Google took over the space and became a monopoly.
2. Network effects. Immortalized by Facebook. It doesn’t matter if someone invents a social network with more features than Facebook. Facebook will be better than their just by having all your friends on it. Network effects are hard because no business will have them when it first starts. Thiel answers that businesses should aim to be monopolies from the very beginning – they should start by monopolizing a tiny market, then moving up. Facebook started by monopolizing the pool of Harvard students. Then it scaled up to the pool of all college students. Now it’s scaled up to the whole world, and everyone suspects Zuckerberg has somebody working on ansible technology so he can monopolize the Virgo Supercluster. Similarly, Amazon started out as a bookstore, gained a near-monopoly on books, and used all of the money and infrastructure and distribution it won from that effort to feed its effort to monopolize everything else. Thiel describes how his own company PayPal identified eBay power sellers as its first market, became indispensible in that tiny pool, and spread from there.
3. Economies of scale. Also pretty straightforward, and especially obvious for software companies. Since the marginal cost of a unit of software is near-zero, your cost per unit is the cost of building the software divided by the number of customers. If you have twice as many customers as your nearest competitor, you can charge half as much money (or make twice as much profit), and so keep gathering more customers in a virtuous cycle.
4. Branding. Apple is famous enough that it can charge more for its phones than Amalgamated Cell Phones Inc, even for comparable products. Partly this is because non-experts don’t know how to compare cell phones, and might not trust Consumer Reports style evaluations; Apple’s reputation is an unfakeable sign that their products are pretty good. And partly it’s just people paying extra for the right to say “I have an iPhone, so I’m cooler than you”. Another company that wants Apple’s reputation would need years of successful advertising and immense good luck, so Apple’s brand separates it from the competition and from the economic state of nature.
Scott Alexander, “Book Review: Zero to One”, Slate Star Codex, 2019-01-31.
February 26, 2019
Laissez-faire versus “Fairtrade”
In the Guardian, a sad tale of the fading bright hopes of the (relatively small number of) affluent westerners who passionately supported the “Fairtrade” movement:
When, in 2017, Sainsbury’s announced that it was planning to develop its own “fairly traded” mark, more than 100,000 people signed a petition condemning the move. Today, on the eve of Fairtrade Fortnight, the fact that most supermarkets have moved away from the standards developed by the Fairtrade Foundation is worrying.
While some grocery chains have sought the foundation’s stamp of approval, many have gone their own way. This means most consumers have little sense of which organisation is doing what to protect the wages and rights of developing world workers. Over the next two weeks, the foundation plans to focus its publicity efforts on cocoa farmers in west Africa and the way the Fairtrade mark can improve their lives.[…]
That is a sad situation. After the great financial crash of 2008, a commodity boom that lasted from 2013 to 2017 turned into a slump that has robbed farmers and developing world governments of vital cash. Just as they were managing to stabilise their finances and set aside money to invest, the world price tumbled and wiped out their profit. Fairtrade practices protect farmers from this sort of setback and allow them to plan for the future.
Of course they have their critics. These are most mostly from the US – people who favour unfettered markets and seek to undermine the Fairtrade ideal, saying it is a form of protectionism that dampens innovation and ultimately ruins farms.
Theirs is an almost religious adherence to the free market that discounts the gains in stability and security that Fairtrade provides, and the scope of the community premium to promote universal education and the rights of women.
But without large employers making strides to adopt the standardised and transparent Fairtrade practices put forward by the foundation, it will be left to consumers to drive the project forward.
At the Continental Telegraph, Tim Worstall responds:
The Guardian tells us that the Great White Hope of global trade, Fairtrade, isn’t in fact working. On the basis that no one seems to be doing very much of it. To which the answer is great – for the only fair trade is laissez faire.
This does not mean that Fairtrade should not have been tried – to insist upon that would be to breach our basic insistence upon the value of peeps just getting on with doing what they want, laissez faire itself. But the very value of that last is that we go try things out, see whether they work and if they don’t we stop doing them. If they do then great, we do more of them.
[…]
So, trying out Fairtrade, why not? Let’s go see how many other people feel the same way? In exactly the same way we find out whether people like Pet Rocks, skunk or Simon Cowell. Product gets put on the market we see whether it adds to human welfare or not. If people value it – and revealed preferences please, by actually buying it – at more than the use of those scarce resources in other uses then that’s adding to human welfare and long may it thrive. If it doesn’t, if it’s subtracting value from the human experience, then we’ll stop doing it as those trying go bust.
This is not an aberration of the system it is the system and it’s why laissez faire works. Peeps get to do whatever and we keep doing more of what works, less of what doesn’t.
Fairtrade? No, I never thought it was going to work as anything other than virtue signalling for Tarquin and Jocasta but that’s fine. Why shouldn’t Tarquin and Jocasta gain their jollies by virtue signalling? As it turns out, now that we’ve tried it, no one else gives a faeces*. So, we can stop. Except, obviously enough, for those specialist outlets like the Co Op where the odd can still gain their jollies. It being that very mark of a laissez faire, liberal, society that the jollies of the odd are still catered to in due proportion to the desire for them.
*From Gibbon, all the fun stuff’s in Latin.
February 6, 2019
“The haggis croquette is the most London-thing ever done in London”
At the IEA, Andy Mayer reports on the first attempted Burns Night Supper in the City of London:
Haggis is a traditional Scottish dish made with sheep’s heart, liver and lungs, and stomach (or sausage casing); onion, oatmeal, suet, and spices. It’s either a local delicacy or an elaborate joke played on the English (take your pick).
Photo by “Lordvolom1” via Wikimedia Commons.
Last week the City of London held their first attempt at a Burns night supper, with the First Minister and representatives of the Scottish Government as guests of honour.
It is a difficult tradition to get wrong. Largely it requires steaming piles of Scotland’s revenge on the sausage, poetry that the English politely pretend to understand while feeling vaguely threatened, and bonhomie to overcome it, enabled through litres of distillate infused with the flavour of an entire peat bog.
The City served haggis croquettes, with wine.
There’s possibly a Glaswegian satirist somewhere who’s just given up. “Ach I canne compete. The sassenach dough-monkeys just served wee Nicola a haggis croquette, on Rabbie Burns night! I’m breaking-me pen.”
Meanwhile in Shoreditch two Millenials have just set up the Haggis Croquette Cafe, serving Organic Iron-Bru made from recycled plastic girders. The haggis croquette is the most London-thing ever done in London.
I spent much of the evening talking to trade officials. Their job is to sell Scottish opportunity around the world and open up its markets.
This was interesting – how would descendants of Adam Smith visiting the birthplace of trade economist David Ricardo define their comparative advantage? What can Scotland do better than anyone else? What might they do well enough that they can carve out positions, despite larger rivals, better off leaving such things to Scotland? Fundamentally, how are they going to compete?
There was an uneasy pause after these questions. And then to paraphrase, “Oh no, we don’t want to compete, we want to cooperate! With everyone! Not being threatening, that’s our advantage!”
I feel very sure that Smith, on hearing this, would have reached out, to extend the invisible hand of history across time, to give this official a mild slap. “Encouraging competition, with and from other places, and then getting out of the way, is the whole point”, he might say.
December 6, 2018
QotD: The best “industrial policy” is not to have one at all
Which brings us to nub of the matter: how do we increase trade and productivity, given that productivity is the thing they claim the whole schemozzle is about. There is one simple and single policy which will do both. One policy which will increase British productivity simply by allowing more trade.
This policy is so simple that even the Treasury (yes, that’s our Treasury, the one in London) was able to get right, even when being run by George Osborne. As they set out in their analysis of Brexit repercussions:
“The benefits of trade in terms of increasing productivity are well understood… greater openness to trade creates a larger market which the most productive firms expand to serve. Openness also increases competition between firms, enhancing the incentives for domestic firms to innovate or adopt new technology… It increases returns on investment, and encourages UK firms to make greater use of new technologies, either by improving the quality of inputs, or through the more effective adoption of technological innovations. Greater openness to trade also increases consumer choice and reduces prices. Lower trade costs give consumers access to cheaper imported goods and competition reduces the price of domestically-produced goods.”
In plain English, it is the competition from imports which forces British firms to buck up their act and become more productive. So here is how we improve British productivity: we move to unilateral free trade. No barriers to imports, no tariffs, just the same regulation as domestically produced items.
British industry, facing the stiffest competition from the best in the world, would be forced to meet global standards of productivity. So the best industrial policy would be to stop trying to have an industrial policy about what we can and can’t buy from beyond Britain’s borders – and the rest should take care of itself.
Tim Worstall, “The best industrial strategy for Britain is not to have one”, CapX, 2017-01-23.
November 14, 2018
QotD: Protectionism and competition
The ITC [U.S. International Trade Commission] acts as if American companies have a right not to be injured by foreign competition, regardless of how poorly they serve their American customers.
James Bovard, The Fair Trade Fraud, 1991.
November 7, 2018
Quebec cabbies sue provincial government for declining revenues and lost capital cost due to Uber competition
William Watson makes the argument that it’s the ripped-off taxi customers who should be suing, not the cabbies:
There are at least two problems with the court case, one technical, one regarding fairness. The technical one: Cabbies want compensation for both declining revenue and the capital loss on their permits. But that’s double-counting. The permit is an entitlement to earn the revenues. Its value falls only because expected revenues have fallen. Give operators one or the other, if the law eventually says you must, but not both. They can have their compensation but not eat it, too.
The fairness question concerns where the taxi cartel’s surplus came from all these years, which is no mystery: It came from taxi users. But what are we, chopped liver? Why don’t we start a class action suit of our own to get back all the money ripped off from us over decades of artificially restricted taxi supply?
Basic fairness would certainly require that. Unfortunately, the law may not. The taxi drivers’ case against the government is that, despite statutes on the books about needing a taxi permit in order to provide taxi services, when Uber came along the government decided not to enforce the law. That created two classes of taxi driver: Uber drivers, whom the government turned a blind eye to, and regular taxi drivers, whom it continued to subject to close regulation. That double standard was an unfairness, yes, but a minor one compared to the long-lasting aggravated rip-off of consumers.
Bottom line: Taxi drivers lobby for and get a law allowing them to overcharge their customers. When in a bout of good policy sense (a “Taxi Spring” you might say) the government decides not to enforce it, the taxi drivers set about suing taxpayers instead. However unfair that may seem — and it’s exasperating! — I suppose, in the end, supply-and-demand must take notice of the principle of rule of law.
September 24, 2018
QotD: Entrepreneurs
We need entrepreneurs to decide what to do.The only alternative is governmental bureaucracy, which is good for national defense and a few other things, but very bad at most of what we do, from room rental to rock music. The entrepreneuseonly succeeds if people like what she does, and agree voluntarily to pay for it. A free society is one of choice. Entrepreneurs give choice, bureaucrats crush it.
Deirdre Nansen McCloskey, “Why We Need to Admire Entrepreneurs”, Peace Love Liberty, 2018-09.
September 23, 2018
How to use the stock market as a scorecard during a trade war
At the Continental Telegraph, Tim Worstall explains how even the financial journalists at Fortune are misunderstanding what the changes in stock market values mean during Trump’s ongoing trade disputes with China:
… how stock markets react is not a good guide to the positive effects of tariffs. Quite the opposite in fact. It’s a much better guide to how we’re all getting screwed by tariffs. That is, the better the US stock market does the more evidence we’ve got of the bad effects of tariffs and a trade war.
Think on it. Why is Trump imposing tariffs? To protect American business from competition by those dastardly foreigners. Who loses in the absence of competition from the Yellow Peril? Those American consumers who would have bought those better/cheaper Chinese goods if they were able to. Who gains from tariffs? American businesses who can now gouge the American consumer a little more in the absence of those items imported from East Asia.
So, a rise in the US stock market is a guide to how much more profit American business can screw out of the American public. It’s a measure, a reasonably good and precise one too, of how much we the people are losing from the trade war and tariffs. More exactly, it’s the capitalised value of the ongoing losses we’re suffering from this restriction of our choices, the competition those who supply us face.
That is, the better the stock market performance the higher those costs and the more we’re losing the trade war. That is, as long as you accept that it is consumers, not producers, that matter, but then that’s the standard economic assumption ever since Adam Smith even if it gets lost in Washington DC often enough.
The US stock market rising in response to US tariffs is evidence of the losses from tariffs, not the gains.
September 13, 2018
Mind Your Business Ep. 2: Aceable in the Hole
Foundation for Economic Education
Published on 11 Sep 2018Believe it or not, parallel parking is not an impossible task. Meet Blake Garrett, the entrepreneur who is using VR to teach people how to drive, without actually getting behind the wheel.
____________
Produced & Directed by Michael Angelo Zervos
Executive Produced by Sean W. Malone
Hosted by Andrew Heaton
Original Music by Ben B. Goss
Featuring Blake Garrett
August 24, 2018
From Software-as-a-Service to emerging Techno-Feudalism
The shift from selling software to selling software subscriptions was a major sea-change in the technology world. Here’s a bit of historical perspective from The Z Man to explain why this could be a very bad thing indeed for the average user:
Feudalism only works when a small elite controls the source of wealth. Then they can control the exploitation of it. In Europe, as Christianity spread, the Church acquired lands, becoming one of the most powerful forces in society. The warrior elite was exclusively Catholic, thus they had a loyalty to the Pope, as God’s representative on earth. Therefore, the system of controlling wealth not only had a direct financial benefit to the people at the top, it had the blessing of God’s representative, who sat atop the whole system.
That’s something to keep in mind as we see technology evolve into a feudal system, where a small elite controls the resources and grants permission to users. The software oligopolies are now shifting all of their licensing to a subscription model. It’s not just the mobile platforms. Developers of enterprise software for business are adopting the same model. The users have no ownership rights. Instead they are renters, subject to terms and conditions imposed by the developer or platform holder. The user is literally a tenant.
The main reason developers are shifting to this model is that they cannot charge high fees for their software, due to the mass of software on the market. Competition has drive down prices. Further, customers are not inclined to pay high maintenance fees, when they can buy new systems at competitive rates. The solution is stop selling the stuff and start renting it. This fits the oligopoly scheme as it ultimately puts them in control of the developers. Apple and Google are now running protection rackets for developers.
It also means the end of any useful development. Take a look at the situation Stefan Molyneux faces. A band of religious fanatics has declared him a heretic and wants him burned. The Great Church of Technology is now in the process of having him expelled from the internet. As he wrote in a post, he invests 12 years building his business on-line, only to find out he owns none of it. He was always just a tenant farmer, who foolishly invested millions in YouTube. Like a peasant, he is now about to be evicted.
How long before someone like this monster discovers that Google and Apple will no longer allow him to use any apps on his phone? Or maybe he is denied access to his accounting system? How long before his insurer cuts off his business insurance, claiming the threat from homosexual terrorists poses too high of a risk? Federal law prevents the electric company from shutting off his power due to politics, but Federal law used to prevent secret courts and secret warrants. Things change as the people in charge change.
June 4, 2018
The economic damage of tariffs
Tim Worstall fisks a recent Pat Buchanan brain fart article on the glories of erecting tariff walls against foreign trade:
Pat Buchanan has been going on for decades about how wondrous tariffs are and if only they were brought back then things would be just peachy. Sadly, this all seems to be based on his not understanding trade, tariffs, nor apparently even history. That’s not a good set of recommendations for a policy about trade and tariffs, one that has been tried many a time in history.
Now, it is entirely true that if we returned to a more Hamiltonian policy era then we’d all be richer. But that wouldn’t be because we had tariffs which paid for government rather than an income or corporate tax. It’s because government would be confiscating a very much smaller portion of what we all produce to pay for itself. If the Feds took 3% of everything we do instead of the current 18% or so then sure, we’d all be richer. But that’s true however that tax is raised.
[…]
His argument is that, protected from foreign competition, American business was able to develop and grow into being world beaters. No, I don’t think this is true – I insist that behind tariff barriers companies stagnate. Indeed it’s standard economics that the medium to long term effects of trade are that the competition from foreigners is what makes the domestic companies stronger and more productive. But put that argument to one side. Assume that Buchanan is correct.
For his conclusion to be correct then it must have been true that the total costs of trade were rising in that time period. Total costs being tariffs plus transport. Only if the total costs were rising was protection rising. The tariffs are only part of the story. And as it happens total protection was falling over this time period. The falls in the costs of transport – for the US externally primarily the steam ship – were greater than the rises in the tariffs. Thus the US was becoming more open to trade at this time when industry was booming and growing to world class levels.
That’s not an argument in favour of trade protection now, is it?
The U.S. relied on tariffs to convert from an agricultural economy in 1800 to the mightiest manufacturing power on earth by 1900.
Well, it’s also true that what the US was inside those tariff barriers was the largest free trade area in the world. I’m the guy insisting that free trade makes places grow, Pat the opposite. And the place with more free trade among more people than anywhere else grows fastest? That’s a point in my favour, no, not Pat’s? Remember, the US Constitution expressly forbids the individual states from having tariffs between them…..that regulation is left to the Feds who have never imposed them.
How have EU nations run up endless trade surpluses with America? By imposing a value-added tax, or VAT, on imports from the U.S., while rebating the VAT on exports to the USA. Works just like a tariff.
No, a VAT does not work like a tariff. In no manner at all does it do so in fact. As every economist keeps trying to point out. Within the EU all goods and services, no matter where they’re made, pay the exact same rate of VAT. Well, OK, ladies unmentionables pay a lower rate than motor cars, that’s true, but all unmentionables pay the same rate, all cars. There is no difference made between domestic and foreign production. It’s entirely unlike a tariff therefore, the crucial component of which is that distinction made between home and foreign production.
Stuff made in the EU and sold in the US pays no VAT. Stuff made in the US and sold in the US pays no VAT. Again, we’ve no distinction by source or origin, this is entirely and completely unlike a tariff.
April 21, 2018
QotD: “Pitiless” globalism
Kathleen Parker rightly criticizes Republicans for becoming a party of angry, fear-lathered excluders (“The GOP is becoming the party of exclusion,” July 31). But when she laments “the pitiless evolutionary march of globalization” not only does she reveal her own misunderstanding of the economy, she gives aid and comfort both to GOP excluders and to Sandersnistas who suffer many of the same misunderstandings.
In what way is globalization “pitiless”? Is it because it creates an ever-growing abundance of new goods and services that consumers choose to buy? Is it in the fact that it lowers the prices of food, clothing, furniture, electronics, communications, and (for example, by expanding the sizes of pharmaceutical-companies’ markets) medicines?
Is globalization “pitiless” because it allows many desperately poor workers in the developing world to earn incomes that enable them and their families to live above subsistence? Or perhaps globalization is “pitiless” because it obliges entrepreneurs and workers in the developed world – nearly all of whom are multiple times richer (thanks to globalization!) than are the foreigners about whom they complain they must compete – to adjust their actions to the choices of the consumers whom they serve?
Globalization is no more or less pitiless than is economic competition generally and what Deirdre McCloskey calls “market-tested innovation” – the same competition and innovation that over the past few centuries crafted our current high standard of living. So unless Ms. Parker believes that it is gentle and just for rich first-world workers to prevent poor third-world workers from improving their lives – unless Ms. Parker thinks it humane for consumers to be forced to accept whatever products are offered, and at whatever prices are demanded, by existing producers rather than motivate producers to work hard and creatively to please consumers – she should not describe globalization as “pitiless.”
Donald J. Boudreaux, letter to the Washington Post, 2016-07-31.
April 7, 2018
Car rental agencies look to government to quash upstart “personal vehicle sharing” companies
Steven Greenhut discusses yet another entrenched industry trying to get the government to protect them from disruptive competitors:
Real capitalism is a tough sport where entrepreneurs risk their capital in hopes of winning customers.
The “crony” version of it involves politicians rigging the rules to assure that the “right” people are winners. We see this ugly process on high-profile national issues, such as when Donald Trump promotes tariffs to boost steel makers at the expense of companies that use steel products. But most of this nonsense proceeds quietly in legislative committees, without garnering any headlines or vocal opposition.
One awful but illustrative example popped up recently in the California state Capitol. Assembly Bill 2246, by Assemblywoman Laura Friedman, D-Glendale, apparently is part of a national effort by rental-car companies to snuff out a burgeoning industry that just happens to be threatening its business model. The bill would redefine “personal vehicle sharing” companies as “car rental companies” — and then slam them with reams of new regulations. Similar measures have been proposed in Idaho, New Hampshire, Maryland and Maine.
Rental-car companies are facing the same challenges as other established business models in this internet and app-based age. Capitalism — the real sort — is defined by “creative destruction,” as economist Joseph Schumpeter called it. New companies are free to offer better products and services that appeal to customers. This is creative as new ideas flourish and consumers get a broader choice and lower prices thanks to competition. But it’s also destructive. Complacent old companies suddenly are forced to improve their offerings or shut their doors. The consumer is king.
For example, I recently grabbed a taxicab rather than my usual Uber and noticed the oddest thing. The cabbie had a modern app-based system for taking my credit-card payment. Until recently, paying by credit card was a hassle because cab services didn’t really want to take your card. I’ve also noticed a fleet of nice new cabs around my city. And the cab I took even sent an email with a receipt and a rating system. Sound familiar?
