Division of Labour: March 2011 Archives
March 31, 2011
Hey Maine! Thanks for nothing c. 1911

From the March 31, 1911 NYT:

The Maine Legislature ratified the proposed constitutional amendment authorizing a Federal income tax late this afternoon, after having turned down the measure at the morning session and passing a State income tax bill instead.

The action was reversed in each instance owing to the action of Gov. Plaisted in demanding an amendment to the State bill increasing the minimum income on which tax should be levied from $2,000 to $5,000. The Democratic leaders would not consent to this and as the Governor declared his intention of vetoing the State bill unless the amendment was adopted, the vote was reconsidered and the Federal income tax plan indorsed (sp) in its stead.

Senator Staples, the Democratic leader in the upper branch, fought the Governor's proposition, but could muster only five votes. Both party platforms declared for an income tax. Party lines were broken on the measure in both House and Senate.

The adoption of the proposed income tax amendment in the Maine Legislature brings the total number of States that have adopted the amendment up to twenty-three. Twelve are still uncommitted. The attitude of the different State Legislatures toward the amendment is shown in the following table.


So that's what we get with bi-partisanship?

The table points out the following states against the amendment (at the time):

Louisiana
Massachusetts
New York
Rhode Island
Virginia
Arkansas
New Hampshire
Utah
Vermont
West Virginia
New Jersey

Those states uncommitted (at the time)

Connecticut
Delaware
Florida
Minnesota
Nevada
North Carolina (!)
North Dakota
Pennsylvania
Tennessee
Washington
Wisconsin
Wyoming

Unfortunately my home state of Georgia had already thrown in with the amendment, along with the rest of the South and most of the Midwest. Hmmm...I am shocked that poorer, agrarian states would try to use the power of the state to redistribute tax burden (and ultimately governmental largess).

Posted by Craig Depken at 11:32 AM in Economics

March 30, 2011
The Thirteen Million Dollar Band

In college, I played trombone in the University of Alabama Million Dollar Band. Incidentally, the Wikpedia page on the MDB is more informative than the official website. The band earned the title "Million Dollar Band" in 1922. Adjusting for inflation with the CPI, the Million Dollar Band should today be the Thirteen Million Dollar Band.

Posted by Art Carden at 09:52 AM in Economics

Round Up

As Berry prepares to host Steve Forbes tomorrow, here are a few things that have caught my attention over the past few days.

1. A nice piece by my former student Shawn Regan: Debunking myths about free-market environmentalism

2. Paging Art Laffer: NY raises its cigarette tax and collects less revenue (though some of the decline may result from less police action against smuggling).

3. Bootlegger alert: Nealy [sic] 60 Maryland Business Owners Endorse Minimum Wage Increase

4. Words of wisdom from Bill Shughart: Silicon Valley, beware of feds bearing R&D gifts

5. Surprise, surprise--a paper in Econ Inquiry finds no long term economic benefit from hosting the Olympics. (But I bet they do provide a golden opportunity for graft.)

6. Paging Paul "broken windows" Krugman: Another paper in EI finds that natural disasters (at least the 1993 Midwest flooding) are economically harmful.

Posted by E. Frank Stephenson at 08:26 AM

March 28, 2011
Trade is made of Charlie Sheen Win, Part 2

Posted by Art Carden at 02:19 PM in Economics

March 27, 2011
Lanny Friedlander, R.I.P.

Lanny Friedlander, the founder of Reason, the flagship magazine of libertarianism, has passed away. Nick Gillespie has a nice memoriam here.

Posted by Brad Smith at 02:47 PM in Culture

Early evidence shows benefits of Citizens United, SpeechNow.org decisions

The early evidence continues to support the wisdom of the Supreme Court's decision in Citizens United v. Federal Election Commission, and other recent court decisions striking down campaign finance regulations on First Amendment grounds, most notably SpeechNow.org v. Federal Election Commission. I discuss the latest bits of data here.

Posted by Brad Smith at 02:34 PM in Politics

March 24, 2011
A Harsh Wrist Slap Is in Order

So the FAA is suspending the dozing air traffic controller. I would expect the harshest possible treatment*, given the dire implications of this incident: It calls into question the reason for the FAA's existence.

I mean, after all, what could have been worse than having two airliners land without incident while this guy was asleep?**

*Not sure how harsh that can be, given some recent accounts of the difficulty in disciplining public servants.

**Rhetorical question

Posted by Wilson Mixon at 02:32 PM in Misc.

March 22, 2011
The Profit Motive: ˇˇArriba!!

Foreign Languages Acquisition: Self-Learning and Language Schools
Jean J. Gabszewicz, Victor A. Ginsburgh, Didier Laussel, and Shlomo Weber
Review of Network Economics: Vol. 10: Iss. 1, Article 1.

Abstract We examine patterns of acquiring non-native languages in a model with two linguistic communities with heterogeneous learning skills, where every individual faces the choice of self-learning the foreign language or acquiring it at a profit-maximizing linguistic school. We consider a one-school model with divisions in both communities and various two-school settings with a school in each community. We compare the number of learners and welfare implications under self-learning with those obtained under various schooling contexts. In particular, we show that for communities with similar size, introducing language schools always increases the number of learners with respect to the exclusive self-learning option.
Posted by Edward J. Lopez at 06:07 PM in Economics

March 21, 2011
On Sausage Making c. 1911

We like to think that public policy is advanced in the spirit of public service, trying to address market failures and moral dilemmas in a way that is both inspiring and appropriate. Well, that was me when I was growing up - then I discovered cynicism, economics, and the paper from 100 years ago (not necessarily in that order). This article from the March 21, 1911 NYT bakes the cake - or rather, shows us exactly what the heck is in the sausage:

It cost Senator John Godfrey Saxe of New York $12 for two seats in the fifth row when he attended a theatrical performance in his district last Friday night. That fact led him to introduce a bill to-night to put ticket speculators out of business.

The bill provides that any person who in a city street or public thoroughfare sells or offers for sale any ticket of admission to any theatre or other place of amusement shall be deemed thereby to commit a public nuisance and guilty of a misdemeanor.

"Nearly all the principal theatres are in my district," said Senator Saxe to-day, "and the best seats are in the hands of scalpers who charge from $3 to $4 for each seat. The Aldermen have tried to meet the situation by passing an ordinance, but this is to be fought. This is a nuisance that affects my district and I hope the bill will be passed."

So, one politician is put off by something and that leads to potential public policy, regardless of the efficiency concerns? Perhaps there is a more standard rent-seeking story in the background - perhaps theater owners wanted the scalpers to go or perhaps only scalpers with places of business wanted to legally be able to sell tickets (notice how specific the law is towards those scalpers on the streets). As bad as anti-scalping laws are, at some level I will throw the nod of respect toward the rent-seekers for their moxie. Perhaps the rent-seekers are preferred to a process where legislation leaps from the brows of individual law-makers like so many disfigured Athenas.

Posted by Craig Depken at 02:23 PM in Economics

The Beefy Crunch Burrito Is Too D@#$ High

The Beefy Crunch Burrito incident
Man upset by price gets in shootout with police

Posted by E. Frank Stephenson at 08:36 AM

March 19, 2011
Just Wondering if ...

...the middle schoolers in this news headline are related to the guy I went to college with who smoked parsley thinking it was pot. For more giggles--one of the middle schoolers is named Adam Grass.

Virginia Middle School Students Suspended for Oregano Possession

Posted by E. Frank Stephenson at 10:35 AM

March 18, 2011
Perverse Incentives in "Canadian Bacon"

This clip has a great illustration of perverse incentives. See roughly 1:00-1:45.

Posted by E. Frank Stephenson at 10:53 AM in Economics

Krugman & Hoover, Once Again

It's been awhile since I've beaten the dead horse of Herbert Hoover being some sort of fiscal conservative. It's also been awhile since I've taken a swipe at Paul Krugman so here's the Krugster making the mistake (yet again):

In early 2009, John Boehner, now the speaker of the House, was widely and rightly mocked for declaring that since families were suffering, the government should tighten its own belt. That’s Herbert Hoover economics, and it’s as wrong now as it was in the 1930s. But, in the 2010 State of the Union address, President Obama adopted exactly the same metaphor and began using it incessantly.

Dude--Hoover increased spending by 50% in his term. Some belt tightening, eh?

Posted by E. Frank Stephenson at 10:38 AM in Economics

North America Dominance Threatened in Econ?

Is the hegemony of American economists in "top" journals being threatened by our European colleagues?

Internationalisation has meant a growing voice for Europe within the economics literature...Some Americans pooh-pooh Europe’s rise. Many new journals have started up in recent years, and European papers are far more common in their pages. But this cannot fully explain the fall in North America’s market share. Controlling for new journals, the share of European papers still rose markedly...Americans need not panic. Economists affiliated to North American institutions contribute 76% of articles in the top journals. They receive a disproportionate number of citations." [The Economist]

(Credit: The Economist)
Nod to Kevin Lewis

Posted by Michael Munger at 09:25 AM in Economics

March 17, 2011
SJSU Econ: THE All-Tournament Team!

Of 11 tenure/tenure-track faculty, 10 of us have our Ph.D.'s from tournament teams.

Faculty name followed by ph.d institution

1. Doris Cheng, Notre Dame
2. Colleen Haight (on leave), George Mason
3. Matt Holian, Ohio State
4. Jeffrey Hummel, texas university
5. Ed Lopez, George Mason (plus Texas A&M undergrad)
6. Tom Means, UCLA
7. Lydia Ortega, George Mason
8. Yeung-Nan Shieh, Texas A&M
9. Emily Skarbek, George Mason
10. Edward Peter Stringham (on leave), George Mason

The only exception above is my awesome colleague and office mate, Mike Pogodzinski (SUNY Stony Brook). Here is a complete list of our faculty.

Go GMU, TAMU, UCLA, t.u., Notre Dame, and OSU!!!

Posted by Edward J. Lopez at 06:19 PM in Funny Stuff

Tragedy of the Commons: Mali Fishing Edition

Posted by E. Frank Stephenson at 01:39 PM

March 15, 2011
Quick Hits

I've mostly been away from the office the past few days but here are a few things that caught my eye:

1. The curious task of economics is ...: Doctors are swamped with patients wanting prescriptions for over the counter meds in order for the expenses to remain eligible for flexible spending account reimbursement under Obamacare.

2. Oh Uncle Sam, Oh Uncle Sam, ...: Professor Cornpone Gingrich blames his patriotism for his marital infidelity. Reading this dreck makes me even happier that George Will characterized old Newty (and others) as "careless, delusional, egomaniacal, spotlight-chasing candidates to whom the sensible American majority would never entrust a lemonade stand, much less nuclear weapons."

3. The genius behind the spectacular failure known as the Global Transpark has a book called "Aerotropolis" out. Readers would be advised to keep a tight grip on their wallets because the WSJ's reviewer says the book is "imbued with a rah-rah cheerleader tone."

4. ABC recently ran an awful, anti-trade series called "Made in America." Scott Lincicome and Cato's Daniel Ikenson have great responses.

ADDENDUM: DOL has a bug with permalinks; we hope to have it resolved soon.

Posted by E. Frank Stephenson at 08:57 PM

Incentives and Market Design in Forensic Science
[There is] an important point too often forgotten in the economic analysis of the law: The rationality assumption applies to enforcers as well as enforcees. In constructing legal institutions we cannot simply assume that legislators, judges, and police will go out and do good—in the economist’s version, promote efficiency. We have to think about their incentives too.
That is David D. Friedman writing in Law's Order (2000), p.274.

We might say the same of forensics experts who support primarily the criminal justice part of the legal system. If they have bad incentives, they'll generate bad outcomes like convicting innocent people. As I've written on DOL in recent years (links below), Roger Koppl's research program on forensic science moves us very far down this road of analysis, and pushes the issue further with detailed reform measures to improve incentives and efficiency in forensics (move from government monopolies with little test-redundancy to market competition with much test-redundancy, broadly speaking). Yesterday Radley Balko posted a new Reason article that covers much of this interesting ground. The final paragraphs of Radley's post allow that these reforms can be costly to implement. Interestingly, Roger's chapter on fingerprinting in The Pursuit of Justice (2010) calculates conservative estimates that "rivalrous redundancy" would be a money maker due to recovered incarceration costs of wrongfully convicted.

Earlier posts:
"Koppl in Forbes on Forensics"
"Bad Incentives in the Legal System"

Posted by Edward J. Lopez at 02:00 PM in Economics

Sowell quote

I've been reading Thomas Sowell's Basic Economics during the ten minutes it takes my office computer to boot up and be usable. Good quote from today's reading (2004 revised expanded ed., p 363-4):

Greed for power is no less dangerous than greed for money, and has shed far more blood in the process. Political authorities have often had "non-economic values" that were devastating to the general population.

Does a free market, as a mechanism for mutual accomodation, facilitate greed as it facilitates the fulfillment of people's other desires? It certainly does not prevent greed, though it does exact a quid pro quo--providing others with something that they want, in order to get them to part with their money. A more relevant question, however, is whether other economic systems, including those founded on altruistic and egalitarian principles, actually end up with less greed than an economic system that depends on prices to allocate scarce resources...

Greed can flourish under very different economic systems. The only real question is: What are its actual consequences under these systems? Where the desire for a fortune can be satisfied by finding ways to lower prices and thereby expand the market for one's output, that is very different from a system where that same desire is more readily fulfilled by imposing political power. In other words, greed is not the product of one particular economic system, but something that all economic, political, and social systems have to cope with in one way or another.

Posted by Tim Shaughnessy at 11:16 AM in Economics

The Enemy of My Enemy

My article at Reason HnR Blog.

We have a new Kirkpatrick doctrine that explains much of contemporary U.S. foreign policy. Instead of communism, the new mutant ideology is Islam.

The story goes like this: Islam is perpetual and expansionist. Any country that goes theocratic will never again be democratic. So even a bad authoritarian dictator is better than an Islamic totalitarian. Repression, torture, secret police, and thousands of political prisoners are all acceptable, provided the favored dictator is the enemy of our enemy. And once again our enemy is an idea. In Egypt, millions of people are struggling for self-determination. But democracy activists have to be careful not to be labeled “pro-American,” because that would destroy their credibility. In other words, by supporting anti-Islamist thugs like Mubarak, we have contributed to the very problem we hoped to solve.

Posted by Michael Munger at 11:11 AM

Silicone killed the snake TV star?

I'm not sure what to say. Video.

It's a classic Hollywood story. Girl meets snake. Snake bites boob. Snake dies. Some commentary.

Not sure I buy the story. I'm betting she squeezed the bejezus out of the snake. Silicone is just not that poisonous. Also, if all the silicone leaked out, Ms. Fox is going to look somewhat...lopsided. Was this some kind of Garden of Eden thing, except it was the snake who bit the (apple)? And then the snake died? Tough justice.

(nod to Anonyman, who said it was too gross to watch, so he watched ten times)

Posted by Michael Munger at 11:00 AM

March 14, 2011
On Full Information c. 1911

From a letter to the editor in the March 14, 1911 NYT:

I would like to know what the law is regarding the washing of dishes in restaurants. I noticed to-day, in a little, popular-priced restaurant where I am accustomed to eat occasionally, that drinking glasses were brought from the tables, placed on a shelf, and, when needed, used again, sometimes without the formality of emptying what the last diner had left in them, sometimes with the formality of wiping them with a napkin.
It would seem no law would be needed in this case as all diners have full information about what is and what is not happening with the used dishes. The popular-priced restaurant might survive nicely with this arrangement if the quality and price of the food offset the additional costs (both physical and aesthetic) of eating there.

However, there would seem to be a problem as soon as the dishes are taken behind closed doors, e.g., to the kitchen for washing or non-washing. It is then that the consumer no longer has full information ex ante, which suggests a potential inefficiency in the market. However, wouldn't those restaurants with dirty dishes eventually be pushed out of the market - albeit perhaps with some customers receiving food poisoning or worse?

The transient consumer might not know which restaurants have clean dishes and which ones don't - but that is where the Internet (oops, okay, the 1911 equivalent of the internet) could help out. Granted, the publication of a "diner's guide" might not be practical or efficient, but a private health inspection system that would inspect and report on restaurants would seem feasible. This third-party could be supported by the firms, in which case the possibility of corruption would seem high, or supported by the customers, in which case there would perhaps be greater costs to a restaurant not being rated (which would encourage restaurants to participate) but would suffer free-rider problems.

I could envision an argument that the privately provided health-inspection scores would be under-provided due to free-riding on customers and this is where the state has a role in internalizing the free-riding (one "market failure") to deal with the information asymmetry problem with clean dishes (another "market failure").

Yet, anecdotal evidence suggests that state or locally-run health laws and inspection systems also suffer corruption from time to time and it is not clear that the information they provide is even all that useful.

Posted by Craig Depken at 01:42 PM in Economics

On Moving Pictures c. 1911

From the March 14, 1911 NYT:

TWO-SIDED ATTACK ON PICTURE SHOWS

Children's Society Going Before the Legislature and Conference Appeals to the Mayor

"The Children's Society's opposition is based upon the objection that men may sit beside children in the darkness attending the performances in moving picture houses, and it is advocating a State law for segregation of the sexes and the showing of pictures while the lights are on.

No mention about content of the movies - that agenda will come later.

Posted by Craig Depken at 01:25 PM in Culture

Warren Nutter on Arthur Okun on political speech

Whenever Josh Hall visits me I always find myself revising my reading agenda. Last week over coffee in my living room, Josh mentioned in passing that Warren Nutter probably warrants more play these days. Wouldn't know, I said. Haven't read him directly, just indirectly through Pete Boettke, Jim Buchanan, and intellectual histories of the Viginia School. Thankfully a few years ago I was gifted the Liberty Fund catalog up to 2008, so the next day I found on my shelf a lonely copy of Political Economy and Freedom: A Collection of Essays, published in 1983, four years after Nutter's death. I was drawn immediately to the essay, "A Comment on Okun," because I'd read Okun's Equality and Efficiency: The Big Tradeoff(1975) closely as an undergrad. Most of Nutter's comment is, in fact, directed at Okun's main argument in support of income redistribution because we as a society evidently prefer equality.

But the tail end of the essay responds to Okun's endorsement of campaign finance restrictions on political speech. Here is Nutter with the QOTD:

In passing, Okun cannot resist praising recent legislation on campaign spending as a welcome curb to the "counterfeiting" of votes and hence a boost to a more "democratic" political process. Here is another example of miscomprehension of the complex issues underlying the First Amendment, with which this legislation is wholly inconsistent, to say the least. Let me merely observe that, as far as the democratic process is concerned, there is likely to be more to fear from a silver tongue than from a gold finger.

Here is Warren Nutter's wikipedia page.

HT: Eric Schansberg and Edgar Browning, my two most influential undergrad professors.

Here for posterity is my little argument that we spend far too little on campaign finance.

Posted by Edward J. Lopez at 11:07 AM in Economics

March 12, 2011
The broken window on an equity standard rather than efficiency standard

At The Volokh Conspiracy, Sasha Volokh offers a fresh test of the broken window fallacy, helping pinpoint it by challenging whether certain scenarios validate the argument that disasters can have net economic benefits. It's a very even-handed and worthwhile read. A few comments on Sasha's main arguments.

1. The resulting distibutional effects may be desirable. Disasters slice through poitical barriers to spending on certain groups over others, for example directly on the people and areas most affected by the disaster. If we assign sufficiently greater weight to these groups, then this ignited spending is net beneficial. This seems to me the best of the arguments, but still not entirely right. If all the disaster does is slice through political barriers, then we'd have to have assigned the greatere weights to these groups & areas prior to the diaster in order for the argument to hold up. I think the reason people might want to assign any extra greater weight is only after they've been made the vicitms of the disaster.

2. Rebuilding spending is a direct injection into GDP and averts the paradox of thrift. But this only allows for disasters that happen to occur during recessions, not all disasters.

3. Disaster spending could be a mechanism to replace aging infrastructure that needed replacement anyway. If the new spending is budget neutral, and if the displaced spending comes from projects that would have been wasteful or pure pork, then disaster spending would be net beneficial. But this is an empirical matter, and I think the record since 2001 shows repeated, systematic increases in spending rather than budget-neutral responses.

There's another listed argument that's a reformulation of 3, but again it's falling back on the political barriers point.

My bottom line for now is, if we assess the broken window from an equity standard rather than an efficiency standard then it's conceivable to have assign weights so that the broken window leads to net economic benefits. But this is an uncomfortable bottom line because it suggests we ought to go around breaking some windows now and again based on people's beliefs of what our relative weights ought to be. And it could be used as a justification for destruction by groups who think the political process assigns too little weight to their interests. "Hey, let's blow up the street in our neighborhood so they'll come put in decent sidewalks and new blacktop." A moral hazard problem that is also a moral problem for those who would.

Posted by Edward J. Lopez at 03:51 PM in Economics

March 10, 2011
Teaching Corner: Firm behavior

TechDirt discusses some of the economics of e-books, pointing to The Technium suggesting that "all digital books, on average" could be priced at 99 cents within 5 years. Both TechDirt and Technium point to e-book author Joe Konrath, whose pricing experiment generated some market data. Now it's DOL's turn to point to it with an intermediate micro question. First, here is the data:

Eighteen days ago, I dropped the price of my ebook, The List, from $2.99 to 99 cents on Amazon. I was selling 40 copies a day prior to that.

Currently, The List is #37 in the Top 100 Bestsellers on the Kindle. It's selling 620 copies a day on Amazon.

1. Assume linear demand.
a) Solve for the demand function using the price-quantity pairs above.
b) At what price does the quantity demanded for e-books reach zero?
c) How many e-books would be sold at a price of zero?

2. Assume fixed cost is zero and marginal cost is 10 cents per e-book.
a) What price should the author set in order to maximize profits and how many books will he sell? Hint: you have to use #1 to solve for the linear marginal cost function first.
b) and how much will profits be?

3. Send your responses and hourly consulting rate to Joe Konrath at A Newbie's Guide to Publishing. See if he can estimate his marginal cost (it may be zero, in which case ask his fixed costs and use it to calculate a curvilinear marginal cost function). Then offer to redo #1 and #2 for him.

Posted by Edward J. Lopez at 03:12 PM in Economics

On legislating fashion c. 1911

Today we worry about baggy pants, in 1910 and 1911 there were concerns about hat pins and, evidently, the harem and hobble skirt. The social stigma associated with the Harem Skirt [or new-found popularity for those women who chose to wear one] was enough to merit a 1911 movie short movie about the issue.

From the March 10, 1911 NYT:

SPRINGFIELD, Ill. - Harem and hobble skirts were the subject of a bill presented in the House to-day by Representative Murphy of Chicago. "Hobbles" measuring less than one and one-half yards and not more than three yards at the bottom are prohibited. An absolute ban is placed upon the "harem skirt" by the bill, which prohibits any women appearing in public in the garb.

The penalty for violation of the proposed law is a fine of not less than $10 nor more than $50 for each and every offense. Each appearance upon any public street or thoroughfare or in any public place constitutes a separate offense.

{sarcasm}
Yes, upon seeing the Hobble Skirts from the early 1910s, Rep. Murphy was right to rid the society of such evil. And the harem skirt? Don't get me started.
{\sarcasm}

Posted by Craig Depken at 11:44 AM in Culture

On Environmentalism and Sportsmen c. 1911

You mean the environmental movement didn't begin with Earth Day and the Cuyahoga River catching fire? According to Wikipedia the latter is what "motivated the environmental movement in the 1960s." That claim might be true, for the 1960s, but this tidbit from the March 10, 1911 NYT belies the universality of that claim:


Asserting that the State loses fish to the value of $1,000,000 [23.3m in 2010 dollars] annually as a result of the pollution of its rivers by sewage [households] and mill wastes [corporations], many sportsmen, in conference at the Capitol to-day, urged the legislators to enact a law for the purification of public streams. It was declared that the shad and herring fishing business on the Hudson has been practically wiped out on account of the large amount of sewage which pours into the river. It was said also that the Au Sable and Beaver Rivers were also polluted by mill wastes, which drive out the fish.

I love reading the paper from 100 years ago.

Posted by Craig Depken at 11:31 AM in Economics

On Opportunity Cost c. 1911

From the March 10, 1911 NYT comes an interesting thought experiment:

The authorities at Harvard are trying to invent a plan to compel students to attend classroom lectures and recitations. Figures just made public by Dean Hurlbut show that during the past year 2,308 Harvard students were absent from their classroom work 75,220 times. This represents an average of thirty days of the college year in which each student was absent from work.

Compulsory attendance is the rule at Harvard, but most students...regard this rule as a well-intentioned fiction.

Isn't it possible that the Harvard students looked at the topics being discussed in their classes and figured that sitting under a tree reading Shakespeare would be a better use of their time (unless it was a Shakespeare class, I suppose). In other words that students then, much like now, look at a particular class session and perceive (rightly or wrongly) that the opportunity cost of attending is just too high? Perhaps some students had taken jobs in order to pay for their Harvard education, and 8/9 of a Harvard education (assuming 270 education days) might be better than 100% of an alternative education.

Wow, professors in 1911 were carping about lazy students? File in the "things never change" drawer.

Posted by Craig Depken at 11:21 AM in Economics

March 09, 2011
On the bid-ask spread c. 1911

From the March 9, 1911 NYT:

Charley Comiskey of the Chicago White Sox told someone the other day that he would not take $25,000 for Third Baseman Harry Lord. He wouldn't pay that much for him, either.

The same article reports statistics that are the dreams of Cubs fans:

The Chicago Cubs for the past five years have established a record unequaled in the history of baseball. They have won 530 games in that time, four pennants, and two world's championships. In 1906 the team won 116 games; in 1907, 107 games; in 1908, 99 games; in 1909, 104 games, and last season, 104 games.

The same article reports on Shoeless Joe Jackson in a scene reminiscent of The Natural:

Joe Jackson, the young Cleveland outfielder, who hit for .387 in twenty games last season and was placed at the top of the American League list has arrived at the Naps's training camp, at Alexandria, la., with a brand new bat. The first time he used it he got three hits out of four times up. Jackson made the bat during the Winter. He got a rough piece of ash from a bat manufacturer and shaped it to suit himself.

Posted by Craig Depken at 12:16 PM in Sports

March 08, 2011
On the price of prayer c. 1911

From the March 8, 1911 NYT:

Charges of $313 for prayers are the principal items scheduled in a suit filed in the Hampden County Superior Court to-day by Joseph Estoff of Buffalo, N.Y. against Edwin C. Gardner, executor of the estate of the late Harris Goodman of Springfield, who died a year ago. Estoff is a brother of Goodman, the latter having changed his name when he began business in this city.

The bill for prayers is divided into two sections. In one place Estoff claims $13 for prayers for the dying offered by him when Goodman was upon his deathbed. In addition, Estoff asks the court to award him $300 for repeating daily in a synagogue the "Kaddish" or prayers for the repose of Goodman's soul. This item specifies daily prayers for fifty weeks at $6 per week.

Posted by Craig Depken at 12:57 PM in Economics

On the Southern Border c. 1911

Consider these headlines from a story in the March 8, 1911 NYT:


20,000 TROOPS AND TWO NAVAL DIVISIONS TO MOBILIZE NEAR MEXICAN BORDER

Fourth of United States Army Ordered to Concentrate in Texas and Southern California.

Cruiser Division of Atlantic Fleet to Proceed to Gulf - Pacific Fleet Held Ready.

2,000 Marines Assembling

Washington Explains it as Mobilization Test and Joint Army and Navy War Game

Here are the opening paragraphs:
The United States is making a move as to Mexico that looks like a potential interference in the affairs of that country, though it wears the official aspect of a military mobilization test. Nearly 20,000 troops, or practically one-fourth of the entire United States Army, including the forces in the insular possessions, were last night and to-day ordered to entrain for points near the Mexican boundary.

Simultaneously the Fifth Division of the Atlantic fleet, including the powerful armored cruisers Tennessee, Montana, North Carolina, and Washington, has been ordered from New York to the Texas coast of the Gulf of Mexico, while a force of 2,000 marines has been directed to assemble at Guantanamo.


Wow.

Posted by Craig Depken at 12:53 PM in Politics

March 06, 2011
Are States Necessary?

From AlJazeera, "A Middle East without borders?"


We can probably find a plethora of reasons why a real political and economic union would not work in the Arab world. [. . .]
But, this would be to dismiss the thrust towards a common set of goals in the Arab world. Borders are increasingly irrelevant in this new equation. The means of mass communication, interdependency, pan-regional media, ease of access through improved infrastructure, the identification with a cause rather than a country, all suggest that the political awakening in the region may be conducive to a completely different set of political and economic realities.

The nation state as we know it, as it was imposed on the region by colonial powers, is ripe for change. The unleashing of people power has now opened up new possibilities for mapping the Arab world's future. While protesters across the region have been waving their respective national flags, the cause for which they are fighting and risking their lives extends well beyond their immediate borders.

Of course, we have developed a network of state-to-state coercion and support that will make any move in this direction unlikely to succeed.

Posted by Wilson Mixon at 09:14 AM in Law

March 05, 2011
Madmen, Intellectuals, and Academic Scribblers: The Economics of Political Change

That's the working title of my book in progress with Wayne Leighton, now under contract with Stanford University Press (scheduled for September 2012).

Madmen connects public choice theory with the history of political ideas and applies it to current affairs in a readable, non-technical way. So Madmen sort of triangulates Heilbroner's The Worldly Philosophers with Harford's The Undercover Economist with Simmons' Beyond Politics (a new and revised edition is soon to come out).

A brief synopsis of the book is beneath the fold. And, naturally, a Madmen blog is in the works as well. Comments welcome (email)!

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Posted by Edward J. Lopez at 02:36 PM in Economics

March 04, 2011
Now it's clear

A letter to the Economist regarding the question of why Austrians have been largely ignored as regards recent economic conditions:

SIR – Buttonwood might find the answer to his question in the quote he cited from Friedrich Hayek: “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”

I can’t imagine economists admitting how little they actually know. If they admit it to themselves it will hurt their ego; if they admit it to others it will hurt their job prospects.

Posted by Wilson Mixon at 03:59 PM in Economics

Trade is made of Charlie Sheen Win, Part 1

My first video for the IHS's LearnLiberty.org project:

Posted by Art Carden at 08:15 AM in Economics

March 03, 2011
Is That a Rotisserie Chicken in Your Pants or Are You Just ... ?
A Kingston man was arrested Tuesday afternoon, March 1, after police said he concealed a rotisserie chicken, chicken wings, a mouth guard and two toothbrushes down the front of his pants and left through the Garden Center of Walmart without paying for them, reports stated.

Source. A similar case is here.

Posted by E. Frank Stephenson at 01:31 PM

Markets in Everything: Bieber's Hair Clippings Edition

Bieber's hair clippings sell for more than $40K

Posted by E. Frank Stephenson at 01:25 PM

March 01, 2011
The Effects of Charter High Schools on Educational Attainment

An article by Kevin Booker, Tim R. Sass, Brian Gill, Ron Zimmer in the current issue of the Journal of Labor Economics finds large gains associated with attending a charter school. The abstract:

We analyze the relationship between charter high school attendance and educational attainment in Florida and in Chicago. Controlling for observed student characteristics and test scores, we estimate that among students who attended a charter middle school, those who went on to attend a charter high school were 7–15 percentage points more likely to earn a standard diploma than students who transitioned to a traditional public high school. Similarly, those attending a charter high school were 8–10 percentage points more likely to attend college. We find even larger effects when we treat high school choice as endogenous.
Posted by E. Frank Stephenson at 12:32 PM

The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith

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