The New Voucher System, Minus the Vouchers

This L. A. Times editorial discusses the perverse incentives created by a recent directive from the Department of Education (enabled by the No Child Left Behind Act), which says that "[s]tudents at the lowest-performing schools can transfer to a better school in the same district even if it's full. … The only exception is if the crowding would violate safety codes." The problem with this requirement is that it gives both good and bad schools exactly the wrong incentives. The bad schools have an incentive to get worse -- or at least not get any better -- so that students will leave. And the good schools have an incentive to diminish their performance in order to avoid attracting more students. As the Times editorial notes, "It's hard to see the benefit in turning good campuses into cramped encampments and in rewarding a successful principal and fine faculty by dumping more work and bigger class sizes on them."

These are the same kind of complaints often lodged against school voucher programs, but in this case they're right -- and they are a powerful indictment of the public school system, not market-based solutions. Can you think of any private industry in which consumers are regularly regarded as liabilities? In which growing demand for your company's product is a burden and a curse? Public schools have an incentive to reduce the number of students they serve because even when students are allowed to move (as under the new directive), they are not allowed to take their money with them. Under a voucher system, losing a student would mean losing funding, and attracting a student would mean attracting funding. Failing schools would have to scale down and fire under-performing teachers. Successful schools would receive regular infusions of cash, which they could use to expand their operations, buy new equipment and facilities, and make their valuable services available to more students. But none of this will be possible until we break the public school monopoly and create a functioning market in education.

ADDENDUM: To the extent that public school funds are allocated on the basis of enrollment, the Department of Education's edict could be an improvement over the status quo. The worst schools would be losing their funding as they lost their students. For the better schools, however, additional funds with additional students are not necessarily desirable unless the school has the discretion to expand using those funds. This is not something easily done in the command-and-control public system. Allowing students to take their money to private schools, rather than forcing the best public schools to accept them even if they think doing so would degrade the quality of education, would be a better move.

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Non Vultis Contendere?

I know somebody's reading this page, because the hit counter rises by about 25 a day, but apparently none of my readers feel like playing my silly games. So far I've received one submission for my best and worst Christmas songs contest, and zero submissions for my clever group names contest. Geez, doesn't anybody goof off at work any more?

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Break Out Your Tie-Dyes and Bellbottoms

In re Rockwell's problematic calculations (below), Franklin Harris asks:

I wonder how many years back you really do have to go to find a federal government of the size that could be paid for sans present income tax revenue?

Good question. By my calculations, we'd have to set the time circuits for 1974.

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Economic Sophistry on Your Right

I found the following in an article by Lew Rockwell:

Let's not reform taxes. Let's eliminate them, starting with the income tax. That is not unrealistic. The income tax this year will yield $1 trillion for the federal government. Cutting that amount gives us a budget equal to the federal budget of 1987. Was the government intolerably small back then?

Needless to say, I was suspicious. Government has certainly grown since 1987, but I couldn't believe it had grown that much. I strongly suspected that Rockwell had failed to adjust for inflation, but I was too lazy to prove it. But today, a colleague to whom I'd mentioned the article pointed me to the right numbers in a public finance book, which I confirmed using online government statistics. In 2002 (estimated), the government spent $1,827.5 billion, of which $879.5 billion came from individual income taxes. The difference is $948 billion, or just under $1 trillion, of revenue from sources other than individual income taxes. And indeed, it turns out the government spent 1,004.1 billion in 1987, or just over $1 trillion. So Rockwell appears to be correct -- except that all of these are nominal figures.

Once we adjust for inflation to put things in real terms, it turns out that $948 billion of current dollars is worth only $594 billion of 1987 dollars. In other words, abolishing the individual income tax would only leave us with enough money to cover about 59% of the expenditures we had in 1987. Now, don't get me wrong -- I'd love to see the federal budget slashed to 59% of its 1987 size, or smaller for that matter. But let's be honest about it: abolishing the individual income tax (without replacing it with something else) means radically downsizing government. No two ways about it.

Rockwell errs in a couple of other ways as well. In arguing against the consumption tax, he responds to the claim that a consumption tax doesn't tax savings as follows:

But the government should not be in the business of prodding us into a particular pattern of saving and consumption. It should leave that up to us. Saving is great to the extent it reflects individual preferences. Consumption is great in the same way. But there is no way to know a priori what the right mix should be.

The question, then, is how different taxes affect the savings-consumption trade off. It turns out (if you do the math) that an income tax biases people toward greater consumption by altering the effective rate of interest, whereas a consumption tax is neutral in that regard. So if Rockwell really believes that government should not "prod us into a particular pattern of savings and consumption," he should favor the consumption tax as an alternative to the income tax. (He is right, however, the politicians might cleverly introduce a consumption tax and then conveniently "forget" to repeal the income tax it was supposed to replace.) Rockwell continues:

And think of this: the degree to which the consumption tax discourages consumption is the same degree to which it does not raise revenue. How does the tax-hungry state deal with that paradox?

There is no paradox here. The extent to which *any* tax discourages the taxed activity (consumption, smoking, whatever) is the extent to which it does not raise revenue. If the demand for (or supply of) the activity were perfectly elastic, then no revenue would be raised at all, as people would just quit the activity altogether. If it were perfectly inelastic, then the government could raise as much revenue as it wanted without affecting the activity level at all. But in the real world, almost nothing in life is perfectly elastic or inelastic -- and that means the government can raise (some) revenue while simultaneously reducing (but not eliminating) the activity.

I know Lew Rockwell wants to reduce the size of government, and I sympathize. But fallacious and economically unsound arguments will get us nowhere.

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Constitutional Cognitive Dissonance

Mark Kleiman's response to my comments below about constitutional mustard, which I'll pass on with relish (sorry):

I should have said that such a decision would make me happy substantively, though not procedurally. It's more or less the position of a lawyer winning a motion he mostly thinks he deserved to lose.

Makes sense to me.

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Passing the Constitutional Mustard

Stuart Banner observes, correctly I think, that people's opinions about constitutional questions have an uncanny way of tracking their opinions about the desirability of the related policies. In other words, it's rare to hear someone say, "I favor X, but I realize X is unconstitutional," or "I oppose X, but I recognize that it's constitutional." Gun control is a nice example -- the gun controllers are sure that the Second Amendment only protects states' right to have a national guard, whereas gun advocates are sure it protects an individual right to bear arms.

Mark Kleiman, though, appears to be an exception to the rule when it comes to anti-sodomy laws. In his words, "I think that anti-sodomy laws are a thoroughly bad idea, and that politicians who support them are mostly pandering to prejudice. But I have a hard time wrapping my head around the idea that those laws are unconstitutional." This is a respectable position, in large part for its willingness to admit the Constitution doesn't always say exactly what you want it to say.

However, Kleiman ends by saying this: "I'll be happy if the Court reverses Bowers [the 1986 Supreme Court decision that refused to strike down a Georgia anti-sodomy law], and even happier if its doing so, or failing to do so, helps split the Republican coalition. That's not the same thing, however, as thinking that striking down the law would be right as a matter of Constitutional interpretation." In other words, Kleiman is saying that the Constitution allows anti-sodomy laws, but that he'd be happy to see the Supreme Court strike them down anyway. (Unless there's some way to reverse Bowers while upholding anti-sodomy laws? I don't see it.) This strikes me as a profoundly anti-constitutionalist position, and it undermines Kleiman's status as a counterexample to Banner's Law. It's easy to say that the Constitution disagrees with your ideological position if you don't think it's important for the Supreme Court to uphold the Constitution! So perhaps Banner's Law should be modified like so: *for people who think upholding the Constitution is important*, their views on constitutionality have a strong tendency to reflect their ideological viewpoints.

(Just for the record: I'm opposed to anti-sodomy laws, but I'm ambivalent on the constitutional question. Maybe I'll blog my reasons later.)

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Group Dynamics

As I walked back from lunch today with three other economists, we passed by the college dean, who asked if this would be called a "gaggle of economists." This got us speculating about the appropriate group names for professions. These labels exist already for groups of animals ("murder of crows," "exaltation of larks," etc.). Why not for humans? We had the following ideas:

An optimization of economists
A set of mathematicians
A bewilderment of philosophers
An agglomeration of sociologists
A buggery of lawyers

Sorry, I just couldn't resist that last one. Anyway, I'd love to hear people's suggested additions to (or revisions of) the list. I'll post the good ones.

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Percents of Percents

If you heard your income tax was going to rise (or fall) by 5%, what would you assume? Would you think that 5% more (or less) of your total income would be taken by government? Or perhaps, if you understand the marginal structure of the progressive income tax, that 5% more (or less) of your last dollar of income would be taken by government? I suspect that these answers are what most people would think, assuming they thought about it at all. But often, the percentages are actually percentages of percentages, so that the effect (whether from an increase or decrease in taxes) is actually much smaller than it appears.

Most recent example: this article from Citizens for a Sound Economy, an organization I once interned for and generally admire, says that New York Mayor Michael Bloomberg recently signed into law an 18.5% increase in the property tax. Now, I don't know how high property taxes are in NYC, but I can't imagine they're high enough for that figure to be a percentage of actual property values, which tells me that it must be a percentage of a percentage. If, say, the property tax just rose from 5% to 6%, that would be about a 20% increase in the percentage (6% minus 5% divided by 5%).

The article doesn't actually claim that we're talking about 18.5% of your property value being taken by government, so the article isn't grossly misleading. And in any case, CSE is just following the general practice of politicians, journalists, and think tanks in discussing tax changes and proposals. But unless I'm terribly underestimating the American public, I'll bet that a lot of people are misled by statements like this. And at least sometimes, I think the deception is intentional. For instance, when a Republican politician wants to reduce the top marginal tax rate from 35% to 30%, Democrats will say, "The Republicans want to reduce rich people's taxes by over 14 percent [5 as a percentage of 35]"; they will almost never say, "The Republicans want to reduce rich people's taxes by 5 percentage points." (Of course, even the latter statement is misleading, as it overlooks the marginal tax structure - but that's not the point I'm getting at here.) Take note: using percentages of percentages is an equal-opportunity deception: those who want lower taxes will use it to overstate the size on an increase, while those who want higher taxes will use it to overstate the size of a decrease.

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The Strength of Our Convictions

Eugene observes that in some jurisdictions, public defenders are elected. He speculates on what sort of campaigns there would be for such elections ("soft on crime" or "minimum constitutionally adequate defense"?). The seeming problem with electing public defenders is the apparent conflict of interest, as the general public is typically on the side of the prosecution, not the defense. So, here's my modest proposal: Why not have public defenders elected by the prison population, or perhaps by all persons who have been convicted of felonies? They would seem to be the appropriate constituency.

I'm only half serious, but the more I think about it, the more sense it makes. Matching the constituency to the interests represented by the office seems quite natural to me, and it would at least partially overcome the conflict of interest problem (if that problem is indeed serious, which it may not be). In many states, felons are actually denied the right to vote, so there would be a nice symmetry to having at least one election in which they are the *only* people who can vote. On the other hand, all of us have the *potential* to be on the wrong side of the law -- or more importantly, to be *accused* of being on the wrong side of the law -- so we all have some interest in having good public defenders. But the plain fact is that most Americans don't seem to consider that possibility until they find themselves there, whereas the already convicted have faced the reality.

I'd better stop before I convince myself.

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Economic Reasoning With a Hand Up Your Butt

On Friday night I watched "It's a Very Muppet Christmas," and I found it more entertaining than most of Henson Productions' recent output. As a longtime fan of the Muppets, I'm willing to forgive some of their more recent failures (e.g., "Muppets Tonight," an unfortunate attempt to resurrect "The Muppet Show") and give them another chance from time to time. "A Very Muppet Christmas" had me chuckling most of the way through -- especially when I saw that the Muppets' Christmas spectacular was called "Moulin Scrooge."

Unfortunately, the show was marred by its misguided political-economic message. The plot revolves around the efforts of an evil banker (Joan Cusack) to take away the Muppet Theater unless the Muppets make their overdue loan payment by midnight of Christmas Eve (the contractually specified deadline). If she succeeds in repossessing the theater, she plans to turn it into (horrors!) a skeezy nightclub.

Since the primary viewers of the show were probably Muppet devotees like myself, this was a safe message. The Muppets are great -- who would want to see the Muppet Theater get shut down? But here's the problem. If the public really loves to watch the Muppets, then the Muppets should be able to raise enough revenue to cover their operating costs and pay off the loan. If they can't, then clearly people don't want to watch the Muppets, in which case they *should* lose the theater. Resources should be allocated to their most valuable uses, as determined by the revealed preferences of consumers. In the real world, the Muppets are bankable enough that Henson Productions is unlikely to close its doors (though it has been bought and sold a handful of times). But in the fictional world created by the show's own plot, apparently the Muppets aren't so bankable after all.

Predictably, the Muppets stage a huge Christmas show that will bring in *just* enough money to pay off the loan -- which suited me fine. If they can generate the cash, then their existence is economically justified after all. In addition, Cusack's banker proves to be not merely profit-seeking, but actually unethical as well: after somehow getting her hands on both copies of the loan contract, she alters them to move the payment deadline to 6:00pm instead of midnight. That little maneuver enabled me to set aside my ideological objections and accept Cusack as a suitable villain for the remainder of the movie.

Until the end, that is. At the last minute, as Cusack basks in her triumph and orders the Muppets to evacuate the theater, one of the Muppets (an amusing Mexican-stereotype shrimp named Pepe) saves the day. How does he do it? Does he find another copy of the contract? Does he find a means of proving that Cusack had altered the originals? Nope -- he petitions the City Council to declare the Muppet Theater an historical landmark, thereby prohibiting Cusack (or any future owner) from ever using the site for anything except, well, Muppet theatrics. In the end, good prevails over evil -- not because the truth comes out, not because the good creatures of the world demand justice, not because promises are honored and legitimate contracts enforced, but because our friend the government steps in to curtail private property rights!

I know, I know, it probably seems like I'm overreacting. And I am. Still, I can't help but think that plots like this affect young minds (and older ones, for that matter). Pop culture does influence people's political and economic beliefs. Movies and television shows that perpetually cast the businessperson as the bad guy, and the proponents of special privileges from the government as the good guys, do the public a disservice. I believe the Muppets can do better.

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Jack Frost Roasting on an Open Fire

This is the informal poll that I've been giving to all my friends, and that I'm now opening to the public: What is the best Christmas song of all time, and what is the worst Christmas song of all time? I'm accepting nominations in two categories - classic and modern, where modern includes recent covers of old carols. (For the mathematically challenged, that's a total of four songs: best classic, worst classic, best modern, and worst modern.)

I'm not going to draw a sharp line between classic and modern, because I don't know enough about when most of these songs were written anyway. Just specify which category you're nominating each song for. (Kind of like the Oscars: there's no threshold amount of screen time that distinguishes Actors from Supporting Actors. It's just a matter of how they get nominated.)

Send me an email (link to the right) with your nominations. I'll publish the results here in, oh, a week or two. I'll hold a run-off if the numbers justify one. I have my own nominees, of course, but I wouldn't want to bias the results...

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More Pesky Facts

I can't seem to start any blog fights with ideological enemies, but my friends seem to find plenty to argue about. Amy informs me that I'm wrong about the relative prevalence of wife-beating and husband-beating, and she points me to a bunch of evidence indicating that husband-beating is just as common. Rather than point you to the URLs, I'll just point you to Google and let you do a search on "husband beating." A plethora of articles will show up, although they do all seem to rely on the same one or two studies (specifically, Steinmetz 1977). I'm still skeptical. There's such an incredible array of evidence that men are generally more violent than women (just look at any statistics on violent crime or incarceration rates) that it's hard for me to believe things would be any different behind the marital veil. But lacking any specific facts to refute the Steinmetz conclusion, I guess I'll just have to grumble a little bit and admit that I could be wrong. Feh. Anyway, Amy agrees with the broader point of my last post, which is that objections to the term "wife beater" on grounds of offensiveness or discrimination are pretty silly.

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Low-Brow Lexicography

According to this article, there is a minor fracas over the possible addition of "wife beater" (in the sense of an armless undershirt) to the Oxford English Dictionary. Apparently some people find the term offensive. The fracas is minor because the OED's mission is to document, not to dictate, word usage; the word "nigger" also appears in its pages, along with every other offensive term in the English language. I don't think anyone's seriously suggested that the OED's editors should exclude "wife beater" on grounds of political correctness.

But some critics do have a problem with the term itself, and their criticisms make little sense to me. NOW president Kim Gandy claims that using "wife beater" to refer to a garment "trivializes" domestic violence. I fail to see how. My sense is that people who use the term do so derogatorily; they intend to put down those who wear sleeveless undershirts as the kind of cretins who might beat their wives. Clearly, wife beating is seen as a bad thing.

Warren Farrell, a "men's advocate," has an even less comprehensible problem with the term: he says it's offensive to men because it excludes them. "We are so conscious of things like wife beating, but we are not conscious at all about husband beating. Domestic violence is equal opportunity. I wouldn't feel good about people wearing 'husband beaters' either." I don't get it - does Farrell think the term "wife beater" implies that husband beating doesn't occur? Besides, husband beating (and for that matter, anyone beating) is a serious matter, but I can't imagine it's anywhere near as common as wife beating. More common problems naturally get more attention.

And then there's the strange rejoinder of OED editor Jesse Sheidlower: "Apart from fashion writers writing about this, there's no evidence that this term is being used in an offensive way…. People who use this word are not using it to put anyone down." What? Of course they're using it put people down! In its origin, at least, the whole point was to say a person trashy enough to wear a shirt like that would probably beat his wife, too. The term "wife beater" is offensive and meant to be - but toward the beaters, not the wives.

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History Lesson

Oops. My friend Tim Lee (who does not, to my knowledge, have a blog) informs me that my Roman history below is in error.

Actually, the story I learned was rather different. Most of the wandering into the hinterlands that occurred was in the early years of the empire, from Caesar's conquest of Gaul in the late first century BC to the conquest of Germanic tribes in the first century AD and the conquest of Britain in the second century.

When Augustus died in 14 AD, he decreed that the boundaries of the empire should remain as he left them, and with a few minor modifications (Britain being one of the biggest), they did. The Germanic tribes that Augustus failed to conquer were pretty much left alone for the rest of the empire's existence. I believe it was also Augustus who dramatically reduced the Roman military forces by almost half from its peak during the civil wars-- an enormous peace dividend-- and the size of the Roman military was roughly fixed thereafter.

The Romans literally built a giant wall across the continent of Europe, and stationed Roman legions along it. This strategy worked for more than 200 years-- the interior of the empire was more or less safe from marauding invaders from Augustus's death in 14 AD until sometime in the third or fourth century.

According to my history professor, the major causes of the collapse of the empire were internal. First, the Roman government developed a sort of proto-welfare state, which required raising taxes and eventually led to open warfare between tax collectors and wealthy Romans.

Secondly, the Roman legions stationed along the border became more loyal to their local commanders than to the emperor, since many had lived in a particular military outpost for several generations by the third century. As a result, it became increasingly common for a legion to march on Rome to install their commander as emperor. There are periods when Rome got a new emperor every year, each supported by a different regional faction within the army.

Finally, over time the barbarians became more civilized, at least in terms of military tactics and technology. Those closest to the border had the greatest contact with the empire, and so picked up new technologies the quickest. By the time Rome fell, the Germanic tribes just outside of Rome were using essentially the same weapons and tactics as those inside the empire.

When the barbarians finally succeeded in breaching the borders and looting the empire, there was for all intents and purposes no empire left. Rather, there was a patchwork of squabbling factions, with no meaningful control from Rome. At that point, it wouldn't have mattered what Rome had done militarily, because Rome wouldn't have been able to muster much of an army anyway, and they'd have been as likely to turn it on rebellious citizens as invading barbarians.

Tim later added the following addendum:

Most of the German territories were captured under Augustus in 12-9 BC, and Britian was first conquered by Claudius in 43-44 AD. So Rome's borders didn't change much from AD 44 until its fall 300+ years later.

Tim asked me to emphasize that he is not an expert on Roman history - but since I haven't taken a single course covering that subject since high school, I'll happily defer to his authority. I don't think this alters the larger point I was making, though. Engaging in unnecessary battles abroad can distract attention from the real threat banging at our door; while that may not have been the Romans' error, I think it's an error nonetheless.

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New Rome, Meet the New Visigoths

I’m generally skeptical of grand historical theories, but Brink Lindsey presents a pretty persuasive one here. The basic notion is that through much of history, great civilizations have been threatened by primitive nomadic ones, and they have been vulnerable to the threat precisely because of their virtues: division of labor, use of agriculture, relatively fixed location, etc. Although the advent of guns ushered in a long hiatus in this general pattern (which Lindsey explains with plenty of historical detail), the pattern reemerged with a vengeance on September 11. As he puts it, the barbarians are at the gates once more.

Lindsey is on record as something of a war hawk (check out the archives of his blog if you doubt me), so it would not surprise me if the sequels to this article (two are promised) involve justifications for war. So it’s probably worthwhile to mention the anti-war implications of the historical parallels offered in the present article. The Roman Empire, the greatest civilization of its time, fell in large part because of the depredations of marauders and barbarians. And the barbarians were motivated to attack, in part, because of the things that made Rome great, such as its amazing wealth. But was not imperial overstretch also a large part of the problem? The Roman army was constantly on the march, conquering new territories and enforcing its rules on foreign cultures. Yes, the culture of Roman civilization was arguably superior in many respects to the cultures dominated (I’m not arguing the cultural relativist position here), but that’s not the point. The citizens of Rome were threatened by the Roman government’s willingness to incite the ire and violence of other societies.

I wonder if Rome might have survived longer if instead of sending armies into the barbarian hinterlands, it had instead focused its resources on defending its citizens against the barbarians at the gates.

UPDATE, added 2/12/07: A lot of people are finding this old post because of Glenn Reynolds's link to the one below. I should note that I posted a correction to this post here.

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Stop the Rape Penalty

This country has a highly active anti-death penalty movement. But where, I wonder, is the anti-rape penalty movement? That is the question that jumped to mind when I read Stuart Banner's excellent blog post about the strange inconsistency of anti-death penalty activists who cast a blind eye to other needed prison and sentencing reforms. I found the following observation especially telling, given that the supposedly "humane" alternative to death is life in prison:

I'm always reminded of William Witherspoon, whose death sentence was vacated by the Supreme Court in a famous case in the late 1960s. A few months after the decision, when no one was paying much attention to him any longer, Witherspoon was resentenced to 50 to 100 years in prison. His new sentence was "worse than the death penalty," Witherspoon wrote to his lawyer. "Is not 100 years death? All they have done with this sentence is to change the method of execution. Hell, they could have just cut the voltage down and gotten the same effect."

Banner doesn't mention the issue of prison rape, but it was fresh my mind because of a recent article in the L.A. Times Magazine (Nov. 3 edition) by Fred Dickey: "Rape. How Funny Is It?" (available at the L.A. Times website for a price). Most people don't give a damn about prison rape, probably because of the widespread notion that the victims deserve it. But most people would also agree that rape is as serious a crime as murder, or close to it, so you'd think the anti-death penalty crowd would at least weigh in on the subject.

Indeed, I think prison rape is probably a *more* pressing problem than the death penalty, for at least four reasons. First, it's much more common. There are fewer than 100 executions per year in the U.S. (according to the ACLU's death penalty page), whereas the number of prison rapes per year is probably in the thousands or even tens of thousands. It's hard to make a good estimate because the problem hasn't been studied extensively, but in one survey 1 in 10 male prisoners reported having been raped, and there are currently 2 million people serving time in the U.S., so "thousands" is probably a conservative estimate. (See, for instance, the testimony of Lara Stemple of the organization Stop Prisoner Rape.) Second, unlike the death penalty, prison rapes occur without the official approval of a single judge or jury. Third, prison rape is inflicted without any sense of proportionality to the crime. You can go to prison and get raped for a minor drug offense, for instance, whereas the death penalty is only imposed for the very worst crimes. Fourth, prison rape often turns out to be a de facto death penalty, since rates of HIV infection in prison are as much as 10 times the national average.

If the death penalty is a problem, then isn't prison rape an even bigger problem?

UPDATE, added 2/12/07: I see that Glenn Reynolds has linked to this post. Interested readers might want to read this follow-up post on that I wrote a couple of years later on the same topic.

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Reductio Creep

Turns out that Julian blogged on the same phenomenon I did in my last post, and he dubbed it "reductio creep."

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Triumph of the Absurd

There must be a name for this phenomenon: In opposing position X, someone observes that the same arguments that support X would also justify some other position Y that appears, at the time, to be patently wrong. Maybe the point is made as a reductio ad absurdum: "If you support X, you must also support Y, but Y is clearly absurd." X nonetheless gets adopted. Then, some time later, Y is proposed in all seriousness, and the absurd becomes reality.

Exhibit 1. When lawsuits were launched against the tobacco companies (and later, gun manufacturers) for the voluntary actions of their customers, some defenders of the wacky notion of personal responsibility noted that some of the legal arguments employed against the tobacco and gun companies could be targeted against (say) food companies that sell high-fat, high-cholesterol foods. But we would never actually blame companies for individuals' poor eating habits, right? Wrong - now people are suing McDonald's for tempting them to eat unhealthy fast food products.

Exhibit 2. When I hear people defend "buy American" campaigns, I often ask if they would support similar discrimination against products made in American states. Should Texans refuse to buy automobiles manufactured in Michigan? Should New Yorkers resist the urge to buy products made in New Jersey? With the exception of Pace Picante Sauce (which is made in San Antonio, by people who know what picante sauce is supposed to taste like), I thought the very notion ludicrous. Well, it has come to pass. Earlier this week I saw a television advertisement urging me to "Buy Californian." It featured people saying things like, "I'm not an actor, but I am a Californian. And I buy California vegetables." Right - we wouldn't want Californians to become dependent on Florida's farmers, because someday we might go to war with Florida, and then what would we do?

If this phenomenon doesn't already have a name, it needs one. After consultation with my brother the linguist, I propose to call it "absurdum evenit" - the absurd comes to pass. (Or perhaps the more alliterative "absurdum advenit" - the absurd arrives.)

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Canine Evolution

I found this L. A. Times article fascinating. Apparently, millennia of interaction with humans have shaped the genetic code of domesticated dogs in surprising ways.

In the genetic journey from wolf to lapdog, dogs developed a unique genius for sensing human intentions, as the interplay of handler and hound shaped the biology of canine behavior in ways that scientists only now are beginning to understand, new research shows. … From birth, dogs are fluent in the human text of hand gestures and facial expressions. Their ability to understand humans is better than chimpanzees -- humanity's closest relative -- or the gray wolves from which dogs are descended, according to the first direct comparison of the species.

What's most intriguing to me about this (though the article doesn't discuss it) is that it blurs the line between natural selection and artificial selection. Symbiotic relationships are a well established part of biological evolution, and nobody would suggest that those birds that instinctively pick the teeth of hippos are the result of the hippos' attempts at artificial selection. So what, exactly, is different about the relationship between humans and dogs? Is it the fact that people have *deliberately* bred dogs to have certain traits? That's true, but this article draws attention to the many traits of dogs that arose from interaction with humans without deliberate human selection, but as a corollary to it. Dogs with a greater ability to sense human needs and emotions were more likely to survive, even if humans didn't specifically try to breed in those abilities. So where does artificial selection end and natural selection begin (or vice versa)?

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Straphangers and Other Migratory Animals

In response to my post below about L. A. bus service, Amy Phillips observes that New Yorkers aren't that different from Los Angelinos:

They're doing the same thing on the NYC subway system. A group called "Straphangers" (www.straphangers.org) is trying to get the MTA to run more trains, and simultaneously lobbying to keep the fare down when the MTA has said they need to raise it to sustain the system. Apparently, Straphangers claims that the fare hike is just a ploy by unionized transit workers to bilk us out of our money, and so we should fight for our "fair share" of taxes paid by upstate New Yorkers to finance NYC transit. There are so many flaws there, I don't even want to get started.

Indeed. There's plenty of silliness to go around when it comes to mass transportation, though I think the silly quotient is lower when it comes to subways. New subway companies can't enter the market in the same way new bus companies can (or could, if city government didn't protect the MTA monopoly), so the argument for market competition doesn't work quite as well. But as Amy suggests, there is still something irksome about unions and NYC commuters fighting over money extracted from people who have nothing to do with the subway whatsoever.

By the way, "straphanger" is pronounced "strap hanger," and not "straffanger" as I thought the first time I saw that word in print.

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Why Do the Special Kids Get All the Best Presents?

According to this op-ed, the Republicans are dusting off an old proposal to give school vouchers to special-ed students. I'm supportive, of course, though I'm bothered by the federal nature of the plan (the federal government having no constitutional authority in the area of education whatsoever). But I figure this is something that's probably already federalized, so adopting a more market-like approach probably won't hurt anything. Still, something strikes me as a little bizarre about applying voucher logic only in the case of the mentally challenged, as though run-of-the-mill (and gifted) students don't really need a better education system. If this proposal goes through, educational choice will effectively be available only to the rich and the retarded.

That's hyperbole, of course, since many middle class families manage to cough up the money for private school even while paying taxes into the public system. My point, though, is that educational choice is not affordable without vouchers to a substantial fraction of American families. Vouchers for special education students would be great, but they would do nothing for the vast majority of families with typical children.

Interestingly, as the op-ed observes, in the status quo special-ed students already have the ability to attend private schools with public funds when the public schools' special ed programs aren't up to snuff. If the public schools can't provide them with what they need, the justification goes, then let them go to the private sector. My question for those who support such private-school transfers for special-ed students is this: why not apply that justification to all students, including the poor and the middle class? If they (or their parents) feel the public schools don't provide them with what they need, let them go elsewhere. It's evident that many public schools are not just failing in special education - they are failing across the board. In this regard, special ed students aren't so special.

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Why the Bush Administration is Focusing on Saddam Instead of Al Qaeda

I think this old parable -- one of my favorites for describing the effect of mathematics on the economics profession -- is a pretty good description of current foreign policy as well.

A man is crawling around on his hands and knees under a streetlamp, apparently looking for something. A second man comes walking by, stops, and asks the first man what he's doing.

"I'm looking for my keys," he replies.

"Where did you lose them?" asks the second man.

"In those bushes over there," replies the first.

"So why aren't you looking over there?" asks the second man.

"Because the light is so much better over here!"

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Another One Rides the Bus

I heard on the radio this morning that the Los Angeles Bus Riders Union is suing the MTA to get them to increase the size of their bus fleet. They complain that there are not enough buses to accommodate all the passengers waiting to ride them. As you can find out by following the link above, the Bus Riders Union was formed in 1994 to lobby for improvements in bus service in the L.A. metro area.

I can hardly think of a better illustration of the folly of organizing the production of goods and services through bureaucracy instead of markets. There's something truly bizarre about consumers having to launch lawsuits and lobby lawmakers to force businesses to sell them more of their product. Do we need a Fast Food Eaters Union to make McDonald's and Wendy's open more stores? If bus lines were operated by the market, rising demand would result in a temporary rise in price, which would increase profits, induce higher production, and eventually attract new competitors. Eventually, the new competitors would drive the price back down.

I'm simplifying, of course, because there are idiosyncrasies created by the state provision of roads, curbs, and sidewalks. Allowing "jitney" bus service could result in the destruction of regular bus service, because the jitneys could swoop in on the established bus stops and scoop up the passengers just ahead of the regular schedule. That would reduce the financial returns to having established stops and schedules, possibly leading to their disappearance. But these factors do not rule out market solutions, as Daniel Klein, Adrian Moore, and Binyam Reja have argued persuasively in their book on "curb rights." The use of specialized property rights in curbs (bus stops and the like) could allow for the emergence of a market in mass transportation without the bureaucratic nonsense.

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Knock Knock. Who's there? Osama. Osama who?

Why do I oppose invading Iraq? Here's why. The article's conclusion puts it in a nutshell:

One thing should not be forgotten: prior to September 11, much of the national security focus of the Bush administration was on the proliferation of weapons of mass destruction to so-called rogue states (now the axis of evil) and the missile defense thought to be needed to combat that potential threat. America was blindsided by the al Qaeda terrorist threat. If we focus once again on potential threats that have nothing to do with the 9/11 attacks and ignore the real threat at our doorstep, we do so at our peril.

Now for the Pop Quiz.

1. Which of the following persons is most likely responsible for the destruction of the World Trade Center?
(a) Saddam Hussein
(b) Osama bin Laden
(c) Kermit the Frog

2. Which of the following persons has been connected to the bombing of a Bali nightclub frequented by American tourists?
(a) Saddam Hussein
(b) Osama bin Laden
(c) Alfred E. Neumann

3. An audiotape released last week says that the United States should be expecting terrorist attacks in the very near future. Whose voice is allegedly on this tape?
(a) Saddam Hussein
(b) Osama bin Laden
(c) Mr. Magoo

I should think the choice of targets would be obvious. And lest I be accused of assuming mutual exclusivity where it doesn't exist, remember that defense resources are limited. Tax dollars are scarce. The time and attention of the administration are scarce. We can't afford to fight every battle at once, so we have to set priorities. So… before we pick a fight with Saddam, shouldn't we deal with the guy who already picked a fight with us?

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From the Role Reversal Department

According to this L. A. Times article, the Justice Department is investigating possible antitrust violations by the nation's two largest alternative newspaper chains, which allegedly agreed to sell each other their competing divisions in Cleveland and Los Angeles in order to reduce competition. The case is ironic in a couple of different ways, as author Tim Rutten observes:

If federal prosecutors find sufficient evidence to pursue a case, it would be a novel moment on at least two counts: One would be the spectacle of the nation's leading alternative weeklies, with their roots in the insurgent journalism of the 1960s counterculture, being treated like a 19th century cartel. The other would be the very strait-laced John Ashcroft's Justice Department entering the legal lists to uphold the commercial rights of massage parlor operators, escort services and phone sex operators, which provide the bulk of the chains' classified advertising.

The case is, unfortunately, consistent with current antitrust doctrine as exemplified in the recent Microsoft case. In that case, the defendant could be characterized as a monopolist only by adopting a very narrow interpretation of the market in question: MS was said to have a monopoly on *proprietary* operating systems for the *PC* platform, thus ignoring the software company's two main competitors: non-proprietary operating systems like Linux and the proprietary operating system used on Apple computers. The case against New Times Media and Village Voice Media relies on a similarly narrow definition of the market in question: the companies are being treated as competitors in the market for *alternative newspapers*, thus ignoring the vast amount of competition both papers face in form of mainstream print and broadcast media, not to mention the Internet.

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Titillating Supreme Court Action

Okay, somebody out there must have read the same article I did about the Victoria's Secret case. I read it within the last couple of days, on Salon.com I thought, but now I can't seem to find it anywhere on the web. It had to be the funniest description of arguments before the Supreme Court I ever read. The author cleverly categorized every argument made by the attorneys and justices in lingerie terms -- e.g., the "Miracle Bra" argument, the "lift and separate" argument, the "secure underwire" argument, etc. And the names actually fit the points they represented, though I can no longer remember well enough to give an example. If anyone knows where I can find this article, please send me the URL so I can post it here!

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Smoking on the Silver Screen

I heard on the radio yesterday that the UN's World Health Organization is pushing for the MPAA to give R ratings to all movies that show people smoking. The MPAA has been resistant to WHO's pressure so far, and I hope they continue to stand firm. Giving R ratings would reduce or eliminate whatever usefulness the ratings system has. For all its faults, the ratings system has this virtue: it attempts, in a rough and ready fashion, to reflect the values shared by most people, and specifically parents, in this country. Most parents would rather not have their children see graphic depictions of sex and violence, and an R rating currently provides a reasonable indicator of whether a movie has either of those things. The fact that parents are somewhat more permissive about these things now than they've been in the past is reflected -- I think rightly -- in the loosening of standards for receiving an R ratings. Some movies that would have gotten an R in 1970 would probably get a PG or PG-13 now.

If the MPAA started giving R ratings to movies just because they show people smoking, it would mark a shift from trying to *reflect* values to trying to *shape* them. As a result, parents will find an even greater discrepancy between their own standards and the standards embodied in movie ratings. If parents see an R rating in the status quo, they can reasonably infer that the movie contains graphic sex or violence, from which the average parent wishes to protect her child. Under the WHO's proposed change, an R movie *might* contain sex or violence -- or it might just show a person lighting up while having a civil conversation.

And then there's the fact that the rating system is used to prevent young people from seeing certain movies. Under the proposed system, a 16 year old would be unable to see a movie that depicts smoking without parental accompaniment, even though he can see people smoking cigarettes on the street any day of the week. That's onerous for both the teen and his parents. If the ratings system has any value at all, it's reducing the burden of parenting by providing useful information and restricting viewing only of the movies that typical parents would object to their children seeing. Giving an R for smoking doesn't fit the bill.

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Kick 'Em to the Curb

I really enjoyed this Non Sequitur comic that appeared in the paper late last week, but I can't figure out how to post it here without scanning it -- and I'm far too lazy for that. So I'll just describe it instead. Danae (a cynical little girl who appears in the strip occasionally) has started an online advice column. The following conversation ensues.

"Welcome to DEAR-DANAE.COM, your online home for sage advice. What's your problem?"

"Dear Danae -- I always seem to be attracted to the worst possible guys... How can I break this stupid cycle of bad decisions?"

"Stop voting."

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Life-Saving Strategies

On Friday I attended Eugene's Xth Annual Dress-as-a-Movie party. I wore a parchment-colored shirt on which I'd written (in puffy black fabric paint) a whole bunch of Jewish names. You guessed it - I was Schindler's List. And the names I wrote were actual names of people saved by Oskar Schindler.

The shirt provoked a couple of interesting conversations about whether Schindler had actually saved anyone *on net*. Or was there instead a substitution effect, meaning that saving one person merely resulted in a different person going to the concentration camps in his place? If so, then Schindler only affected the names, not the numbers.

After some consideration, I concluded that Schindler probably did save people on net, although perhaps fewer than the total number of Jews he had working in his factories. I'm not a WWII scholar, but it's my understanding that Hitler's "final solution" didn't really kick into overdrive until his imminent defeat was clear - sometime in late '43 or early '44. They were killing Jews (and others) in the concentration camps before then, but the killing machine wasn't really working at full capacity. Only in the very late stages of the war was the machine working at full speed. Schindler's plan effectively moved some Jews from the below-capacity period, when they could easily have been killed, to the full-capacity period, when they just added to the length of the queue - a queue that had not been exhausted by the war's end.

Another argument for why Schindler's plan actually saved people on net is that he presumably picked the most able and healthy people to work in his factory. Even if there were a one-for-one substitution effect, the substitution would have put relatively more unhealthy people - i.e., people more likely to have died in the meantime - in the concentration camps. In other words, having a healthy person work in the factory and an unhealthy person die leads to a higher expected number of life-years lived than the reverse. On the other hand, maybe healthy individuals would have lasted longer in the camps.

It should probably go without saying that I think Schindler's actions were still laudable and courageous. That's clearly the case if we judge by mere intentions. But I also suspect that his actions at least created a positive *expected* effect on the number of lives spared. Regardless of what happened ex post, his strategy made sense ex ante.

One person at the party told me a story - of Jewish origin, incidentally - about a man whom the king had condemned to death. The condemned man promised the king that, if he were spared, he would teach the king's horse to sing. The king agreed. Once they were in private, the condemned man's wife asked, "What are you thinking? You can't teach a horse to sing, and you'll just be executed a year from now!" The man replied, "A lot of things can happen in a year. I might die, the king might die, the horse might die!" That, I think, was the simple essence of Schindler's plan.

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Incentives

One of my colleagues told me she had to leave work early today in order to pick up her son from school at 11:30, because the school was having a "minimum day." "Minimum day?" I asked. "What's that?" She then explained that the state pays public school teachers by the day. A "minimum day" is a day where the teachers are at work just long enough to get one whole day's pay.

Don't ever let anyone tell you incentives don't matter.

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Beef Imbroglio

It took me a while to suss out the relevant facts in this article about the case of Charter v. USDA, but I think I've finally figured it out. First, some background: The Supreme Court ruled in the case of United States v. United Foods (2001) that individual firms cannot be forced to make contributions for generic advertising. For example, milk producers and distributors can't be forced to help pay for those "Got Milk?" ads that you see all the time. The justification for this decision -- and I think it's a good one -- is that freedom of expression includes more than the right to say what you want to say; it also includes the right *not* to say things you *don't* want to say. And as a corollary, you also have a right not to be forced to subsidize others who are saying those things you don't want to say.

The issue at hand in Charter v. USDA: Major beef producers lobbied for the Beef Act (don't know what year it was passed), which creates a "checkoff" on tax returns. If you check that box, you're agreeing to let the government keep a little more of your money and use it to advertise and promote beef. For reasons that I cannot fathom, lots of taxpayers actually check that box, creating revenues of $80 million annually. But running the program requires funding, and the funding comes from a $1 "assessment" per head of cattle sold. Independent cattle producers have argued, I think correctly, that this is virtually indistinguishable from what the Supreme Court ruled unconstitutional last year.

But the USDA (and the beef associations that lobbied for the Beef Act) defend this program on grounds that the speech in question is "government speech" protected under the First Amendment. The idea is that the government has a right to express ideas, just as private parties do. In this case, the government is simply employing private parties to express the government's message. A federal district court judge bought this argument and ruled in favor of the government. There will be an appeal, of course.

The problem with the "government speech" position, as I understand it, is that it relies on the notion that government actors have the same rights that private citizens do. Yet there are many things private actors can do that are forbidden to government, and rightly so. The Bill of Rights is not there to protect government action, but to limit it. The fact that the funds in question are acquired coercively by the state makes all the difference in the world. Using the First Amendment to justify forcing people to support views they don't necessarily agree with turns the Bill of Rights on its head, allowing it to be used against private citizens for the benefit of government.

Moreover, accepting the "government speech" argument in this case creates a perverse incentive for private interests to lobby for special-interest legislation, because it opens a gaping loophole to the prohibition on forced speech enunciated in U.S. v. United Foods: get the government to do the talking for you.

My non-expert opinion: the district court's decision will be overturned on appeal. But I'd like to hear the opinions of some actual lawyers.

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Escape from Bondage

I have a certain affection for initiatives and referenda, if only because they avoid the bundling problem that arises from voting on candidates and party platforms instead of specific issues. Bundling is one (though by no means the only) reason that special-interest legislation is so common. A politician can alter his minor policy positions just enough to accommodate special interests, thus attracting their votes and campaign dollars, while maintaining his visible policy positions to avoid alienating the rest of the voting public. (Even if you knew your representative supported the ridiculous honeybee subsidy, would that be important enough to outweigh his position on abortion and the death penalty?) By treating issues separately, ballot measures let voters deal with each issue on its own merits. They can also allow the voters to take positions that spook politicians, like legalizing medical marijuana.

But as always, there is a downside. Ballot measures can mislead voters into thinking they can have a free lunch, instead of realizing the trade-offs entailed by "good causes." Yesterday, Californians approved a whole slew of bond issues for "good causes" like school construction and maintenance (see my post below), after school programs for kids, housing and emergency shelter, etc. Sure, there was a dollar amount on each bond issue, with fine print explaining that all this money would eventually have to be paid back by the state. But what do those dollar figures even mean? To the average person (who doesn't even know the size of the yearly state budget - I sure don't), $13 billion spent by the state might as well be $1.3 billion or $130 billion. The real significance of the dollar figure is what the money could have been spent on, such as other government programs or (good heavens!) the personal spending choices of future taxpayers. That information, of course, is not included on the ballot.

Hence my agreement with the following sentiment expressed by Gary North in an article about the pure entertainment value of voting: "I love any election in which there is a bond issue on the ballot. I get to vote 'no.' The more worthy the cause appears to be in the minds of its supporters, the more I enjoy voting 'no.' … So, every other year, I get to go into a voting booth, close the curtains, pick up the hole-puncher, and punch chad-free holes into the 'no' slots of every bond issue. Pop, pop, pop: I love that sound!"

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A More Thoreau Analysis

And as long as I'm quoting from 19th century philosophers, I might as well give the floor to my man Henry David Thoreau for a moment. "All voting is a sort of gaming, like checkers or backgammon, with a slight moral tinge to it, a playing with right and wrong, with moral questions; and betting naturally accompanies it. The character of the voters is not staked. I cast my vote, perchance, as I think right; but I am not vitally concerned that that right should prevail. I am willing to leave it to the majority. Its obligation, therefore, never exceeds that of expediency. Even voting *for the right* is *doing* nothing for it. It is only expressing to men feebly your desire that it should prevail." -- from "Civil Disobedience," 1849.

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Government by Consent of Some of the Governed

I am not an anarchist. I am not an anarchist. I am not an anarchist. There are some days I have to repeat that mantra more often than others, and this is one of them, for on this day we allegedly consent to the policies of our government. Lest anyone think this form of consent is anything like (say) the consent that distinguishes consensual sex from rape, let us hearken to words of Herbert Spencer: "Perhaps it will be said that this consent is not a specific, but a general one, and that the citizen is understood to have assented to everything his representative may do when he voted for him. But suppose he did not vote for him, and on the contrary did all in his power to get elected someone holding opposite views -- what then? The reply will probably be that, by taking part in such an election, he tacitly agreed to abide by the decision of the majority. And how if he did not vote at all? Why, then he cannot justly complain of any tax, seeing that he made no protest against its imposition. So, curiously enough, it seems that he gave his consent in whatever way he acted -- whether he said yes, whether he said no, or whether he remained neuter! A rather awkward doctrine, this." - from "The Right to Ignore the State," 1851.

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Taxonomy of the Tax on Me

Looks like the Treasury Department is toying with the idea of implementing a consumption tax to replace the income tax. Ideally, that's a great idea. The current system, which effectively double taxes interest income (you get taxed once on the principal and then again on the interest itself), discourages savings and investment relative to consumption. I have heard some libertarians oppose switching to a consumption tax on grounds that it biases people against consumption in contravention to their true time preferences. But this argument is analytically incorrect, for the reason indicated parenthetically above. Paradoxical as it may sound, the consumption tax is neutral to the savings-consumption trade-off, whereas the income tax is biased.

However, I'm less than sanguine about the administration's planned approach. Instead of a straight-up sales tax, or a 100% income-tax deduction for savings and investment, they are leaning toward a value-added tax (VAT). The problem with a VAT is that it's not the least bit transparent. When consumers go to the store and buy goods, they will observe only the tax on the last bit of value added to their goods by the retailer; they will not see the accumulated effect of the tax on all the intermediate stages of the good. That's a bad idea. Taxpayers should regularly be made aware of exactly how many pounds of flesh they must hand over to the government, if only to know how pissed off they should be.

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False Advertising

Sunday evening I saw a political advertisement in favor of Prop 47. It starts with the talking head of Larry McCarthy, president of the California Taxpayers' Association (Cal-Tax), saying, "Prop 47 makes schools a priority, and it does so without raising taxes, and it does so through accountability. … Prop 47 is one of these rare opportunities where taxpayers and schools and kids and parents all can win." It ends with the following screen:
YES ON 47
BETTER SCHOOLS
SMALLER CLASS SIZES
(without new taxes)

What, pray tell, is this amazing plan that will improve the public schools without raising taxes? School vouchers, maybe? Charter schools? Nope -- Prop 47 would approve a new $13 billion bond issue by the state of California, with the money reserved for public schools construction and renovation projects. To claim this plan wouldn't raise taxes is disingenuous at best. If the state of California borrows money now, it has to pay it back later. Where will that money come from? Taxpayers, of course. At some point in the future, legislators will have to either (a) raise taxes, or (b) reduce spending on other programs to free up the necessary tax revenue. Just like any other new spending proposal.

McCarthy defends his claim like so: "In contrast to public finance insanity at the state and local level in California, Proposition 47 guarantees planning, cost containment, accountability and solid management in the spending of tax dollars for schools." But this is true only for the *new* funds raised by the Proposition. So far as I can tell, the Proposition does nothing to improve the efficiency with which existing funds (for education or anything else) are used. So even if the new funds are used with sparkling efficiency, public spending will still rise by the amount of the bond issue.

McCarthy continues: "It is our opinion that the only way this bond is a tax increase is to assume that, within the $120 billion a year in state and local taxes already paid, there is no opportunity to set different priorities. It is to say there is no chance to eliminate fraud and outrageous waste of tax dollars." Waste and fraud are, of course, rampant in the state government. But Prop 47 does not one blessed thing to remedy that situation! Providing the state with more funds to allocate creates no incentive to use existing funds more efficiently. Essentially, McCarthy's claim is that Prop 47 won't require new taxes *if* the state suddenly cleans up its act by eliminating waste and fraud from the budget. But if the state did that, then a new bond issue would be unnecessary, as the construction and renovation funds could come out of the savings.

Shame on McCarthy and Cal-Tax for false advertising. Perhaps they think Prop 47 is really a good idea, because the educational gains are worth the expense. If so, they should say so explicitly, instead of deliberately misleading voters into thinking they can have a free lunch.

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Stand Down

Back in 1992 or so, when I was still an undergrad, I attended an abortion rally in Washington, D.C. Apparently abortion rights were being threatened in some way at the time, though I really don't recall how anymore. I was (and still am) a supporter of abortion rights, so I went, and never have I felt more out of place in my life. The organizers of the rally turned out to be hard-core leftists with whom I shared almost nothing except our position on abortion. Indeed, I think a substantial number of the organizers were even communists (no exaggeration). During their speeches, they spent more time talking about the need for federally funded childcare, expanded welfare benefits, affirmative action for women and minorities, and a laundry list of other left-wing causes than they spent talking about abortion. I haven't attended a rally of any kind since.

That was a very long-winded way of pointing out that the most vocal advocates of an important cause can sometimes drive away potential supporters by sending the false impression that only certain types of people (specifically, radical left-wingers) support the cause. Such is the case with opposition to the invasion of Iraq. The most prominent anti-war activists often turn out to be communists, anti-globalization zealots, and so on, and this creates the false impression that opposing invasion of Iraq is a fringe position. But in truth, opponents of making war on Iraq come from across the political spectrum and from multiple ideologies. Bringing them together is the raison d'etre for Stand Down, a coalition blog whose purpose is to unite reasonable opponents of war from a panoply of political viewpoints. Take a look - it should be worth your while.

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IP Freely

Julian takes issue with libertarians (and others) who place intellectual property rights on the same plane as other forms of property. He contends that copyrights and patents "are not genuine property," and he worries that "we diminish the concept of property when we attempt to extend it beyond its rightful sphere."

Now, I'm with Julian and Larry Lessig in thinking that IP rights shouldn't be extended indefinitely and retroactively. But I don't take that position because IP rights are not really property at all. On the contrary, the only reason I support IP at all is that it's quite similar to regular property in the most relevant respects. I would not claim that IP rights are identical to the run-of-the-mill property rights, as there are significant differences -- but then again, there are significant differences even within traditional property rights. Property rights in land are different from property rights in water. Property rights in movable items are different from property rights in real estate. Fee simple ownership is different from ownership of the mineral estate. Self-ownership is different from world-ownership. Different rules apply for the definition and enforcement of all these different sorts of property.

Julian must have in mind some definition of property that includes all of these types of right, but excludes IP. I'm curious to know what that definition is. Property is not, after all, a Platonic form. Property is a catch-all term that refers to a variety of rules and institutions that serve the function of aligning economic incentives. And in this sense, IP and traditional property rights have much in common. Why, for instance, is it generally desirable for land to be owned privately? One huge reason is that without rights of exclusion, most any productive use of land would create positive externalities. If I cultivated apple trees, passersby could grab as many as they wanted, thus reducing the return to my investment of time, effort, fertilizer, etc. The "passerby tax" would induce me to plant fewer apple trees and spend less effort tending them. Similarly, the absence of copyrights would reduce my incentive to create new and interesting creative works. When the benefits of my effort (of whatever variety) are reduced by the free consumption of others, I lack an efficient incentive to expend that effort in the first place. Property is a means of internalizing the positive externalities.

Julian asserts that "the core of property -- which is in the first instance property in labor -- is the right to enjoy the direct benefits of that labor. It is emphatically not the right to prevent anyone else from enjoying the positive externalities of that labor, or indeed, to socialize the costs of internalizing those benefits." But why should we identify this one aspect of property, enjoyment of "direct" benefits, as its "core"? I'm not even sure what a "direct" benefit of labor is. Arguably, it might be the pure joy of using your hands (or brain) to create something, in which case we have an argument against virtually any form of property except self-ownership. All benefits of labor are in some sense indirect, so the question is how far we wish to extend ownership over the benefits.

Moreover, ownership of direct benefits of one's labor is an incredibly weak justification for property rights, which (if treated as a necessary condition for existence of property) would invalidate ownership of any asset that wasn't homesteaded through the "mixing of labor." This position would rule out the possibility of owning undeveloped assets such as forests. Say goodbye to the Nature Conservancy and other organizations that try to protect environmental amenities through private ownership.

J. then argues that another person's use of an idea I've created does not constitute "interference" with my well-being, because "I am made no worse off if some third party hears a song I've written, and plays it for her own enjoyment." Again, a very similar point could be made with respect to many traditional property interests. For example, if I drain a swamp on a piece of land, thus turning it into a great picnicking spot, I am not harmed by the picnickers' activities, at least if there are few enough of them. But denying my rights to the former swamp would substantially reduce incentives for people like me to drain swamps -- or make other land improvements -- in the first place.

I'll skip the discussion of the constitutional basis of IP, because it's obviously true that the origin of IP is not the same as the origin of other property rights, and move on to the question of whether IP is different because it creates a (temporary) monopoly. This, again, is not fundamentally different from other kinds of property. If I homestead a piece of land and put a fence around it, I claim a monopoly on that land. This monopoly may allow me to reap economic profit, particularly if the land is unique in some way. Yes, it's possible for other people with other pieces of land to compete some of my profits away, but that's also true for IP: other creative works can reduce the profitability of one's copyright. The question is how unique the asset is, and that question applies equally to both IP and traditional property.

Admittedly, IP does differ from traditional property in important ways. From an economic standpoint, the most salient difference is that ideas are non-rivalrous: their use by one person does not diminish the use by others. This is the "interference" point mentioned earlier, and it is the main reason that IP rights must be limited in duration. But as significant as that difference may be, I see no reason why it should be chosen as the essential distinction between "property" and "not property." There are, after all, some instances of traditional property that exhibit non-rivalry as well, such as bridges and roads in areas with relatively low population, or movie theaters on weekday afternoons. Should these be denied property status as well? I suggest we should instead recognize that property rights serve a variety of incentive-related purposes, only one of which is the rationing of resources subject to rivalrous consumption.

[As an aside, I should not be misinterpreted as agreeing with the arguments in Sonia Arrison's article that motivated Julian's reply. I think her bottom line is correct, but her reasons are less than sufficient.]

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I'll Have a Big Mac, Three Disposable Planets, and a Large Coke, Please

I am proud and happy to announce that if everyone on the planet lived like me, we would need 6.5 planets -- this according to BBC News Online's Disposable Planet Quiz.

I suppose I should feel suitably chastened, trade in my car for a bicycle, become a vegetarian, reduce my electricity usage to what I can pull from solar panels in my windows, and (most important of all) support the recommendations of the U.N. Commission on Sustainable Development.

I'm not buying. The Eco-Footprint approach relies on the same faulty assumptions behind Paul Erlich's _Population Bomb_ (which was supposed to explode a couple of decades ago -- what happened?) and other Malthusian nightmare scenarios. The quiz's result is based on the number of "biologically productive global hectares" available in the world, relative to how many I allegedly consume. There are, the site says, only 1.8 such hectares per person worldwide, whereas the average American creates an "Ecological Footprint" of 9.7 (I beat the average with a whopping 11.7!). The problem is that this term "biologically productive global hectare" is based only on current technology. How many hectares are biologically productive (that is, usable for agriculture or similar purposes) and how much they produce will undoubtedly change in the future. As the Quiz authors admit in their explanatory page, "Technology can alter the productivity of land, or the efficiency with which resources are used to produce goods and services."

But, you might say, we don't know technology will improve, so we have to assume current technology. I don't buy that, because market economies create powerful incentives for technological innovation. But even if we assume current technology, the Eco-Footprint still underestimates the productivity of the planet, because "the calculations assume that the technologies used in resource exploitation are the average of those prevailing in the world today." Remember that the incredibly low-tech agricultural techniques used in many underdeveloped nations of the world are included in that average. In short, the Eco-Footprint tells us nothing about what the planet's productivity would be if currently available technologies became more widespread.

In addition, as Julian Simon argued in his book _The Ultimate Resource_, "resource" is not a physically defined entity. A resource is whatever human beings have found a way to use productively. Things not currently perceived as resources will be so perceived with future technologies. (Think about the value of silica before the invention of silicon chips and fiber optics.) This is yet another reason why the fixed pie assumptions underlying the Eco-Footprint approach just don't fly.

So eat, drink, drive, live in a big house, blast your A/C, turn up the TV, and be merry.

ADDENDUM: In case you want to find out *your* eco-footprint, you might need these conversions:
Area: 1 sq m = around 10 sq ft
Fuel efficiency: 2 km/lit = around1 mile/gal
Thanks to Ravi Marur for pointing me to the Quiz.

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In the Frying Pan of Life, We Are the Frogs

In a class on regulation that I took as an undergrad, this factoid stuck in my head: in a typical year, Congress will pass about 300 laws; in the same period of time, federal regulatory agencies will pass approximately 10,000 new regulations. Check out Mike Powers's Federal Register Watch to get the answer to the author's well-put question: "What freedoms have you lost this week?" I hope this article is a regular feature, not just a one-time broadside.

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The Most Annoying Article I've Read in a Long Time

Apparently there is nothing that proponents of government subsidies for the arts won't say to protect the NEA. The most recent and outrageous claim? The arts will save us from terrorism! In an article in today's Chicago Tribune (requires registration and will be inaccessible in a week) titled -- no joke -- "NEA fights for its life -- and ours," theater critic Michael Phillips defends the NEA by implying that our very lives may be at stake. Arthur Miller, quoted in the article, says, "The arts can do more to sustain the peace than all the wars, the armaments and the threats and the warnings of the politicians." Right, that's why NEA officials are lobbying to have their offices moved to the Pentagon. If only Osama had been watching more NEA-funded programming on PBS, the World Trade Center might still be standing.

Okay, maybe I'm misinterpreting the author's rather vague argument. Phillips's real point, I suppose, is that the arts help us to heal. We're a wounded nation, and what we really need to make us better is … more artists on the government teat. Let's take a poll of people in the Washington, D.C., area to find out what government action would put them most at ease right now -- I'm sure a majority of them will say, "More large sculptures to hide behind."

Phillips has other arguments, if you can call them that. In the all-the-cool-kids-are-doing-it category, he observes that England's government spends $639 million a year on the arts compared to our "pathetic" $126 million. "America is a rather larger country than England. Why does it think so much less of itself as a cultural entity?" Yup, the measure of how much we value something is how much we make taxpayers cough up for it.

You might think the things we value most would be the things we pay for voluntarily, with dollars from our own pocketbooks instead of our neighbors'. But according to Phillips and others of his ilk, our values are revealed by what we're forced to do, not what we choose to do. Hence the failure of the article to mention the scads of money spent by consumers and private foundations on the arts and entertainment every year. A report produced by the NEA itself places consumer spending on the performing arts at $9.8 billion and motion pictures at $8.1 billion in 2000. Yet the only private efforts that attract the author's attention are the vaunted "public-private alliances" that the NEA uses to leverage its funds.

Do Americans really want and need more art and culture in their lives? I don't know, but I do know how to find out. Let them decide how to spend their own money, and see how they spend it. As an added bonus, we'll actually know what kind of art they actually want to see -- as distinct from what self-appointed cultural critics and government bureaucrats want them to see.

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Time and Again

In her latest column, Marilyn vos Savant answers a reader's question about overtime pay options. "Our employer gives us a choice of overtime pay: 1) pay at 1½ times our hourly rate; or 2) compensatory time off at 1½ times our overtime hours worked [I assume this is paid vacation time]. My co-workers say comp time is a better deal, because no taxes dilute the time off: One gets 100% of what one earns. I argue that comp time is taxed too. Which choice of overtime (personal preference aside) has more 'bang for the buck'?"

Marilyn responds: "Getting overtime pay is a way better deal. The tax argument is weak because that logic justifies not even working at all. You could say, 'Why should I trade my hours for pay if I must give a part of that pay to the government when I could just stay at home and keep all of my time for myself?' In short, saving on your taxes is a financially unsound reason not to work, regardless of the number of hours."

This kind of reductio ad absurdum argument doesn't work very well in situations where people's preferences can change at the margin. What's true for the last hour of work is not necessarily true for the first. It's entirely possible that a tax rate that doesn't deter you from working your first hour will deter you from working your 40th hour. Nonetheless, it's true that the tax issue isn't really important in this case - although the reader, not Marilyn, gives the right reason: the tax is assessed on vacation pay, too. But Marilyn's claim that taking the overtime pay is a "way better deal" cannot be justified.

For simplicity, let's suppose that vacation days are taken the same week that an overtime hour is worked. If you take option A (overtime pay), you work 41 hours (40 regular hours and 1 overtime hour). If your wage is X, then your pay is 40X + 1.5x = 41.5X. The average wage is 41.5X/41 = 1.0123X. If you take option B (extra vacation days), you work 39.5 hours (40 regular hours, minus 1.5 vacation hours, plus 1 overtime hour). But you get paid for 40 regular hours (the overtime pay has been sacrificed for the extra vacation time), so your pay is 40X. The average wage is 40X/39.5 = 1.0127X.

Notice that the average wage is *higher* if you take the extra vacation time. Not much higher, granted -- if your wage is $10/hour, we're talking about less than half a cent. But that, indeed, is the point: there is almost no difference between the two policies, in terms of the average wage. And what negligible difference there is in the average wage points toward the extra vacation time. On what grounds could Marilyn claim that overtime pay is a "way better deal"? (Note that I'm not claiming that taking the overtime pay is a worse deal. It does result in a lower average wage, but total compensation is higher because of the larger number of hours worked. My point is that this is not clearly better or worse.)

Allow me to run a couple of objections off at the pass. First, maybe I'm incorrect in thinking the "comp hours" are paid vacation hours. Maybe they're days you can take off without pay. In that case, I agree that option B isn't very good -- it lets you work an extra hour now (with no pay) in return for a reduction in your work hours later (also with no pay). In fact, that offer seems so lousy that I can't imagine that's what the reader meant. If someone has another interpretation, I'd love to hear it.

Second, it might be objected that I should look at the marginal difference between the two options rather than looking at the average wage. Okay: The difference in hours between the options is 1.5 hours, and the difference in pay is 1.5X. So the marginal wage is 1.5X/1.5 = X, the regular hourly wage. The question, then, is whether you want to sell a little bit more labor for the same wage you've been selling it for all along. Is that obviously a good (or bad) deal, as Marilyn suggests? I think not. It looks like Marilyn has fallen for the fallacy of argumentum ad logicam: because the tax argument was defective, she thought the choice it was advanced to defend was also defective.

(BTW, Marilyn's column appears online here, but for some reason the letter in question does not appear. I read it in Parade magazine.)

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The Nuke Kids on the Block

So it seems that North Korea has been developing nuclear arms technology after all, despite swearing up and down back in 1994 that they wouldn't. Is anyone surprised? Frankly, I don't keep up with foreign affairs as much as I should, so if you'd asked me last week if North Korea had nukes, I would have said, "You mean there's a chance they don't? Really?"

In any case, this further confirms my belief that the nuclear genie is out of the bottle, and it's pretty pointless trying to cram it back in. Anyone who wants a nuke will have one, as Tom Lehrer observed decades ago, and there's unfortunately not a heckuva lot we can do about it. Nuclear non-proliferation policy strikes me as being a lot like gun control: it's mostly successful in keeping weapons out of the hands of people (or governments) not terribly inclined to use them anyway.

On a completely unrelated note, I'm wondering if the hit count on this page would increase substantially if I changed the name to "Agora-feel-ya."

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On the Dollar Value of Human Life

In a recent post to the Volokh Conspiracy, Eric Jaffe asks for a means of putting a value on human life: "no matter how crass it may seem, we eventually need some means of valuing lives (or more likely, life-years) and of comparing that value to other disparate values. We do this in any event, and at some point it would aid clear thinking to bring it out into the open a bit more. Society will "spend" lives on lots of things, and it would be nice if we did so with some amount of introspection rather than just by bumbling along."

Exactly right. Some method, even if only a rough-and-ready one, is needed for valuing lives. Saying that a life has infinite value sounds awful nice, but clearly we don't believe it -- for if we did, we would never take even the slightest risk to our own lives. If your death has a value of negative infinity, and there is even the smallest probability of death from whatever activity you'd like to do (driving, riding a roller coaster, eating rare meat, whatever), the expected value of the activity is also negative infinity. Anything multiplied by infinity is infinity, and no finite benefit could possibly be large enough to outweigh an expected loss of infinite magnitude.

So I will humbly suggest the economists' metric for valuing human lives. For any given risk to human life, find out the minimum amount of money it would take to induce the average human being to accept the risk; call this value X. If P is the probability of death from this particular risk, then solve for the value of life (V) using the following equation: PV = X. For example, if the probability of death created by some risky activity is 5%, and it would take $50,000 to persuade the average person to accept this risk, then the value of life is $1,000,000. This value of human life would not work for all purposes, of course; it depends, among other things, on the size of the risk. The dollar value needed to induce the acceptance of risk most likely increases at a greater rate than the size of the risk; the person willing to accept $50,000 for a 5% chance of death would probably need *more* than $100,000 for a 10% chance of death. In effect, the value of life we use in our calculations would be situation-specific, but not arbitrary.

No, I'm not joking. We cannot avoid the problem of weighing lives. Virtually every human activity involves some risk of death to someone, and risk can never be completely eliminated. It can sometimes be reduced (by spending increasing amounts of resources on safety measures, by reducing activity levels, and so on), but eventually our risk-reduction efforts are subject to diminishing returns. We have to spend more and more to achieve smaller and smaller reductions of risk, and it would be infinitely costly to reduce risk to zero. So the question is not whether to have risk or not, but how much to have. Placing an infinite value on human life does nothing to address that question.

(This proposal is certainly not my own idea; see almost anything in the work of Kip Viscusi, among others, for further details on this approach.)

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Federal Department of Being Your Mom

So Health and Human Services Secretary Tommy Thompson is telling fast food restaurants to serve healthier food, as if it were any of his damn business. I suppose he feels entitled by his job title to lecture people about proper eating habits. And to make it worse, he doesn't even respect us enough to lecture us (the eaters of fast food) directly -- instead, he tries to browbeat the producers of fast food into serving us food that we don't want. I doubt Republicans will make a stink about Thompson's audacity, because, well, Thompson is a Republican. But I'll bet they'd raise holy hell if a Democrat in the same office urged restaurants to go vegetarian.

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Occam's Eraser

A colleague of mine suggests a simpler theory of why so many people stink at math: "Math is hard, people are stupid." I don't think this explains everything (such as why so many otherwise intelligent people I know can't deal with math), but it probably explains more than either of the more complicated theories discussed below. There are different forms of intelligence, after all, and perhaps the kind of intelligence needed for math is just more scarce. Of course, the real explanation is probably a combination "all of the above."

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Emoter Voter

Next month, Californians will vote on Proposition 52, which would allow voter registration on election day. This proposal is presumably based on the bogus notion, propagated by journalists and pundits every election year, that maximizing votes cast is the great desideratum of electoral politics. But when it comes to votes, I'm much more concerned about their quality than their quantity. Other things equal, I prefer to be governed by voters who have taken the time to consider the issues and think about them. There's no way to check for a voter's understanding of the issues, of course, but one simple proxy is to see whether she even had the forethought to get registered at least 15 days before the election. It's far from a perfect correlation, but at least it's something.

Lest I be accused of being undemocratic, it's worth noting that advance registration excludes no one from voting except those who *exclude themselves*. Anyone who wants to vote (and meets the other requirements) can do so if she just thinks ahead. Advance registration does not discriminate on the basis of race, gender, or political viewpoint. Yes, it does impose a filter on voters, but what's the matter with that? Age and citizenship requirements also impose filters. We impose them because we think that, on the whole, the pool of voters meeting them will be marginally more informed and thoughtful than would a broader pool. (This does not mean that I fully agree with all existing voting requirements, however. Consider this thoughtful commentary on the voting rights of non-citizens.)

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Money for Puffing

A jury in California recently ordered Philip Morris to pay a whopping $28 billion settlement to a 64-year-old woman with lung cancer. She started smoking 50 years ago, and she blames her choice on the company's failure to warn her of the risk.

I'm not sure when the tobacco companies started putting health warnings on their products, so it might well have been less than 50 years ago. And it's also possible that the companies had internal studies indicating that smoking was even more damaging than was publicly known at the time, so I'll leave that to the jury as well. What really irks me about this and similar cases is the presumption that anyone who starts smoking is utterly incapable of stopping, regardless of what new information emerges. Nicotine addiction is regarded as a force so powerful that it erases all control and responsibility on the part of the addict. Yet there are probably millions of people who have stopped smoking over the last 50 years. No, it's not easy, but the difficulty doesn't erase the responsibility.

There's an old rule of common law known as the "last clear chance" doctrine that would seem to apply here. The paradigmatic case involves a victim who gets hit by a train while walking on the subway tracks. The victim should not have been there, but the train engineer nonetheless has a responsibility to stop the train if he sees the (potential) victim. If the engineer fails to take this "last clear chance" to stop the accident, then he (or his employer) will be held liable for at least part of the resulting damage. Normally, this doctrine is used to limit the contributory negligence of plaintiffs, thereby placing greater liability on defendants. But if you apply the same reasoning in the case of smoking, the doctrine points in the other direction. It seems to me that the smoker is in the position of the train engineer. Even if the tobacco company did something wrong (withholding relevant health information), the smoker herself had the last clear chance to prevent the damage. Shoot, she had the last *one hundred* clear chances to prevent the damage, even if we estimate that you can only try to stop smoking once every six months.

I'm not a lawyer, so perhaps I'm misinterpreting or misapplying the last clear chance doctrine. But my overall point can be made independently: your responsibility to do the intelligent thing, to take action to avoid becoming a victim, does not end just because somebody else has already done something wrong.

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Why Johnny Can't Integrate, By Parts

In her most recent column (Parade magazine, 13 October 2002), Marilyn vos Savant takes up the question of "why more people don't understand math better than they do." Her tentative answer: "I believe that much of the problem lies in the lack of logic and reasoning skills. Math is just logic with numbers and symbols attached, and success with it requires the ability to reason effectively. But children usually are taught *what* to think, not *how* to think." That's a good partial answer (and I don't think Marilyn intended her answer to be exhaustive), but it should be taken with at least a grain of salt. For many years, the fad in pedagogy has been to emphasize understanding rather than outcomes. As Tom Lehrer once put it, "New Math" was based on the notion that "the important thing is to understand what you're doing, rather than to get the right answer." The problem is, math is a field in which understanding and accuracy are bound up together. You can't have one without the other, and accuracy is one (not to say the only) viable indicator of understanding.

In any case, I want to suggest another reason that so many people don't understand math (and this reason is meant as a complement, not a substitute, for Marilyn's). Math is one of those disciplines that builds heavily on itself. If you don't get arithmetic, you won't get algebra; if you don't get algebra, you won't get trig; and so on. Students often learn to hate math because of one really lousy teacher, and after that they never really catch up. If your American history teacher is horrible, that won't cripple your efforts in World history; but if you algebra teacher is horrible, your geometry and trig teachers may never be able to rescue you. The point, then, is that math education is much more sensitive to failure at any point in the learning process.

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