Re: Private urban green space
On 2004-08-03, Fred Foldvary uttered: Public goods means collective goods, used simultaneously by some group. This is a completely different meaning from public as in public sector. Precisely what I meant. Solved publicly is ambiguous because it can mean solved by a group or solved by government officials. I should have been more explicit, but you evidently get the meaning. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Private urban green space
On 2004-08-01, Fred Foldvary uttered: Economists are not hostile to public goods. Still, knowledge of economics tends to make you more receptive to the idea of the invisible hand and the possibilities of private economic organization. Hence, it makes you more libertarian. And libertarians are sure hostile to the public goods scene, because there the emphasis is on things that *need* to be solved publicly. Public goods are facts to which economists apply theory like any phenomenon. There is nothing inherently good or bad about public goods. I agree. Public goods are also highly interesting because they perfectly illustrate how hard econ can be. I mean, the simple rationality assumption we often apply to people clearly ceases to apply in case of public goods and all the various private ways people deal with their existence. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Siberia and Canada
On 2004-04-08, Bryan Caplan uttered: Question: If there were free migration between the U.S. and Canada, would Canada lose a lot of population to California, Florida, and other more desirable locations? In fact we might expand the rationale to something I once asked: in the event totally free economy ever came about, and transportation continued to get cheaper, would the total populus of the Earth eventually live in a narrow band centered on the equator? Alternatively, if the center of this band was too hot or the tilt of the Earth with respect to its orbit around the Sun required some correction, would we witness some other circular concentration of population, or perhaps two separate bands centered on a great (perhaps tilted) circle around the planet? -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: How do I convince New Agers that not everybody should get the same wage?
On 2004-01-19, Kevin Carson uttered: By competition. And how does that arrive at this solution? Simply by depreciating below their labor value the commodities which are by reason of their quality or quantity useless or unnecessary, ...and in making the producers feel, ...that they have manufactured articles absolutely useless or unnecessary, or that they have manufactured a superfluity of otherwise useful articles. Yep. In fact seem to remember that Popper also takes note of this in Open Society, when he argues that Marx should have just forgotten about labour value and taken exchange value more seriously. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Too many choices
On 2004-01-06, Fred Foldvary uttered: He says that as the number of choices we have grows (for products) we become less happy, Is he just guessing, or is there evidence for this? I seem to have heard of some controlled experiments to this effect, in the psychological literature, so I think there might be a small grain of truth to the claim. (As usual, no cite. Take the grain of truth with a grain of salt.) But I also think the problem is elsewhere. Basically, lots of choices are only a problem when you habitually look back, mull over the opportunity cost, and start to hesitate with choice because costs are involved. That's a sure sign of a mindset where people refuse to understand that choices are by definition about not having it both ways. Some of the problem also comes from not acknowledging that sunk costs are indeed sunk, and that that's just fine. From this perspective the idea that lots of choices are bad is simply a symptom of people's unwillingness to conceive of choice the way orthodox economics does. But what really makes me wonder is why these ideas are becoming so commonplace right now. Have people in fact been more economically savvy in the past, or what? And if they have, why the change? (It shouldn't come as a surprise that, as a libertarian, I'm prone to blaming creeping socialism for these sorts of things. ;) -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Why is a dollar today worth more than a dollar tomorrow?
On 2003-12-05, john hull uttered: For some reason, I can't get it straight in my head why the risk-free rate of interest would be higher than zero. The easiest example I know of is, would you be happy saving all of your income for the next year, without receiving a formidable compensation? That'd kill you, after all, because eating is consumption. This shows us that people have at least some urgent desires which aren't interchangeable with longer term ones. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Why is local currency good or bad or neither?
On 2003-10-30, Fred Foldvary uttered: So basically this is a response to credit constraints. Another reason people may be inclined to use local currencies is that the narrow circulation and informal accounting usually associated with them make it difficult to collect taxes on the associated transactions. At least in some cases we can analyse local currencies as instances of tax evasion. Another common reason why local currencies are used is unemployment. When people are unable to earn a living on the open market, they'll have to rely on friends and neighbours for help, which easily leads to reciprocal trade in services. That can easily spread and give rise to a new, local currency when bilateral trade no longer suffices. From this perspective local currencies can also be a means to circumvent labor market rigidities. I've heard of a couple of examples here in Finland where the system has basically started out as a mutual help collective, then undergone expansion and the usual problem with a commons, and finally adopted some unit of accounting. A list of currently operating LETS's (Local Community Exchange Group) in Finland lives at http://hammer.prohosting.com/~msurakka/suomi.htm . It seems that a dislike for hard currency is a big part of why they exist. What I can't fathom is why these people engage in indirect trade, use what is essentially money and even compete, but still think that it's somehow more neighbourly or human to do all this in an alternative currency. The funniest part is that in many cases local currencies are started by different kinds of socialist collectives who wish to fix the hourly wage or simply do not like hard currency. It's really quite funny to see a bunch of sworn communists denounce money, only to reinvent it in another form a couple of months later. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Why is local currency good or bad or neither?
On 2003-10-31, Fred Foldvary uttered: At least in some cases we can analyse local currencies as instances of tax evasion. So why not just use federal paper dollars for that? Because if you get caught, you'll pay for it. In case of local currency, the tax authorities do not bother as easily because of the cost and the trouble with drawing the line between mutual help and legally taxable transactions. (From the econ standpoint, there's no such line. If we were to be perfectly logical about it, tending to your children is a service to your spouse with a taxable value.) From this perspective local currencies can also be a means to circumvent labor market rigidities. Again, why not just use federal cash? Because it isn't always available if the relevant markets are rigid. Local cash on the other hand can be created on demand, and even neglecting that, is somewhat decoupled from the ordinary cash economy. What is more neighbourly is the local organization and the relationships it fosters. So why not just use federal paper dollars for that? -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Why is local currency good or bad or neither?
On 2003-10-31, [EMAIL PROTECTED] uttered: People also often suffer from a confusion between income and money. They tend to think of the two as synonymous, that anything not received in money isn't income and therefore isn't taxable. Precisely. If we drop the distinction, we can for instance easily see that all sex is actually prostitution of one kind or another. Not that I'd easily argue that in public... ;) -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Senators Denounce Policy Analysis Markets
On 2003-07-28, Robin Hanson uttered: FYI, our DARPA project (www.policyanalysismarket.com) has just been denounced by two senators: http://wyden.senate.gov/media/2003/07282003_terrormarket.html It's still a nice plan. Much like Brunner's delphi pools in Shockwave Rider. (BTW, if anybody ever tried to patent artificial markets like these, it'd be highly interesting to know whether sufficiently exacting scifi qualifies as prior art.) What I'm wondering, though, is asymmetric information. General contingent markets are basically complicated markets in risk, and the claims traded a form of insurance based on risk sharing. So the same problems apply to them that do to insurance. If we're betting on diffuse, difficult to influence risks, there's no problem. But if we bet on something individual market participants can change, we have to consider things like moral hazard and adverse selection. I mean, because of the efficient market hypothesis, the ideal contingent market only allows profits to someone bringing in new information. That's why betting on whether someone will be assassinated will give an unreasonable edge in information to an assassin, and will actually spawn assassinations. (Assassinations are probably cheaper than defending against them if true anonymity is present.) That's also why the market could turn into a twisted incarnation of Assassination Politics (http://jya.com/ap.htm). Furthermore -- unlike the original AP proposal -- these are futures markets where you can speculate and win without pulling the trigger. Rational bubbles can form, and those will in case turn the bet on an assassination into a self-fulfilling prophecy (early investors will have an incentive to rig the wheel, so to speak). When this happens, the ill effects of moral hazard will be amplified, and we can't rely on the resulting assassinations being reasonable even to the degree we can with garden variety AP. To someone with a penchant for conspiracy theories, then, all this would probably count as one of DARPA's tacit aims. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: fertility and government
On 2003-07-14, Wei Dai uttered: 1. Why is fertility higher in dictatorships? Do dictators like bigger populations, and democrats like smaller populations? Maybe they're poorer in aggregate? I mean, sustenance-level poverty is one of the prime causal precedents of high fertility, and most dictatorships are poor ones, because of ineffective rule of law and wide-spread corruption. Sure, there are a few wealthy dictatorships (Saudi Arabia comes to mind), but that's because of independent factors (which usually do not touch the entire population). Does population growth influence choice of government? Under extreme poverty, likely not -- poverty would drive people to take care of their own business, not politics. Under other conditions, probably yes -- relative poverty and the greed thereoff is how we got the welfare state. We would expect the per capita lack of income in young generations induced by population growth to affect at least redistributive policy. For example, I wouldn't be surprised if that was the precise description of how politics in India works right now. If the latter hypothesis pans out, we have to be real grateful that industrialisation proceeded so rapidly in the West, unhindered by full-grown democracy. Otherwise we never would have tunneled onto the level of wealth which throttles population growth, without bumping into a democratic political wall with the working class requiring income transfers -- the latter slows growth, so we could well have become stuck in between. 2. Should economists try to maximize GDP, or per capita GDP? Neither, I think. Maximizing GDP would not be conducive to general welfare. Maximizing per capita GDP today would also violate individual choice, if we also take into account individuals' time preferences. I would take full heed of the principle of revealed preference, and just let people choose. Another interesting piece of information in this article is that democratic regimes are more frequent in more developed countries, but it's not because those countries are more likely to become democracies. Rather it's because they are less likely to revert back to dictatorships. Among democracies that have collapsed, the one with the highest per capita income is Argentina in 1975 -- US$6055. I would side with Robert Kaplan (http://www.theatlantic.com/issues/97dec/democ.htm) and conjecture that democracy can only survive in a relatively homogeneous population, constrained by the rule of law. Secondarily I would claim that democracy can only survive where its transaction costs and the steadily increasing dead weight it produces can be absorbed by economic growth. Such conditions seem to sweep most of the unsuccessful democracies from the picture. They might sweep us under the rug as well. The conjecture might be false, but at least it supplies some basis for the claim that growth is necessary (which it of course isn't in any purely economic framework). -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Family Businesses and Licensing
On 2003-07-10, John Perich uttered to [EMAIL PROTECTED]: In my informal experience, fathers and sons tend to work together full-time only in professions with strict licensing or training requirements. That's an interesting one. My first stab is that we might go about it the other way. Why do such professions need strict licencing? One explanation would be that these professions are crafts where the best way to learn the job is to do it. In such professions we wouldn't expect there to be strict outcome based criteria on what one needs to know, but we do know that a certain learning process is more successful than others. So, if we want to assure safety and efficiency, we can't just test for an applicant's skills -- there'd be a problem with information. Thus the market orients itself along the learning process, the uncertainty about the outcomes makes the professions more amenable to legislative intervention, and the eventual legislation then follows the process oriented reasoning. Also - why is it more often father/son, and not mother/daughter or mother/son? Or father/daughter? Perhaps self-selection in occupations, so that parent/child combinations with different sexes do not benefit from intergenerational knowledge transfer? That leaves the mother/daughter pairing. Perhaps that's because of self-selection into lines of work which are less crafty? -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Russia Needs More Inequality
On 2003-07-07, Bryan Caplan uttered to [EMAIL PROTECTED] and Tyler Cowen: But I can't remember hearing anyone drawing the obvious lesson: Russia needs more inequality to persuade the brains to stay. It doesn't. Just as you say, it needs better inequality, which in this case most likely means less inequality. The point is, the distribution shouldn't be forced. It should be let to evolve. Until now, it hasn't been, because of all the rent-seeking and corruption you mentioned. Thus, equality vs. inequality isn't the right basis in which to analyse Russia's situation. The right basis, as always, is rule of law vs. no rule of law, or efficient law vs. inefficient law. As Alex Tabarrok pointed out to me, even Rawlsians should embrace this conclusion. This sounds interesting and I might not have been present at the time. Could you perhaps provide me with a cite? -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: some people are optimizers
On 2003-07-01, Marko Paunovic uttered to [EMAIL PROTECTED]: However, I don't think that there is any evidence, except in social insects, for this kind of specialization that you are suggesting. The existence of two sexes appears an obvious counter-example. There are also some reasons to expect that the principle might work at a finer-grained level. I don't have a reference at hand, but I've once read a highly interesting sociobiology account of why homosexuality might be one such specialisation (that's where the childcare idea came from). I've also heard some speculation about the possibility of warrior genes (i.e. genes which cause aggression bordering on self-sacrifice). The same goes for novelty seeking (troubled youth), which I understand has been extensively studied. From the economic standpoint the ratio between novelty seekers and steady people determines the community's collective risk profile. So I wouldn't dismiss the possibility of genetic occupations (a wonderful term, BTW) just yet. Otherwise we're in vigorous agreement. -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
Re: Marketing vs. Economics
On 2003-06-29, alypius skinner uttered to [EMAIL PROTECTED]: But would this really give us economic models more useful than the simplified ones currently used? Taking more factors into account may make the models so hard to maximize that there is no net gain in predictive accuracy. Thoughts, anyone? I think rules are already a large part of economic reasoning. I mean, what are game theory and institutional economics if not rule based econ? Also, there are plenty of mathematical tools which can be used to maximize even hugely complicated rule based models -- there's a lot of theory and software for finite automata, Markov models and the like. (Presuming maximization is a concept which fits easily with rules.) Even if solving such systems exactly is infeasible, numerical solutions would appear tractable across the board. So yes, I think rules might have their place. It's just that they probably won't be needed in easy, more or less competitive markets with money, but in inconventional ones like the marriage or public choice ones. (My first post, so I should probably introduce myself. I'm a 24-year old Finnish student of math and computer science. Economics is more or less a hobby to me, largely thanks to my libertarian political background. Armchair economics describes my interests perfectly: institutional econ, black markets, voting theory, market failures, the complications with IP rights, transaction cost economics, and so on. I'm looking forward to some interesting discussions.) -- Sampo Syreeni, aka decoy - mailto:[EMAIL PROTECTED], tel:+358-50-5756111 student/math+cs/helsinki university, http://www.iki.fi/~decoy/front openpgp: 050985C2/025E D175 ABE5 027C 9494 EEB0 E090 8BA9 0509 85C2
