Re: Absolute vs. relative income level

[john hull]

> "A desire to earn more than the neighbors seems to
say that at a level equal to the neighbor, the next
dollar has a (much?) greater return than the prior few
dollars--obviously contradicting the "diminishing"."  

Um...why should we think that?  If my neighbor has X
dollars, why would my going from X to X+1 be a greater
step for me than going from X-1 to X?  The last step
in a journey may be more "satisfying" than the first
since it coincides with the trek being completed, but
does that, in general, strike down the idea of
diminishing returns?  The utility doesn't seem to be
coming from the X+1th dollar per se, rather it seems
to be coming from consuming a good we can call
"beating the joneses".  The utility rise comes from
the consumption of the good, i.e. the psychic benefit
of beating my neighbor in the income race, and not
from any intrinsic value to that particular jump in income.

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Re: Is a non-optimizing organism evolutionarily viable?

[john hull]

Sure, they'd be a good example.  :-)


--- Fred Foldvary <[EMAIL PROTECTED]> wrote:
> --- john hull <[EMAIL PROTECTED]> wrote:
> > Is an organism that routinely fails to optimize
> > evolutionarily viable?  
> 
> Human beings, for example?
> Fred Foldvary
> 
> =
> [EMAIL PROTECTED]
> 


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Is a non-optimizing organism evolutionarily viable?

[john hull]

Is an organism that routinely fails to optimize
evolutionarily viable?  

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Re: Speaking of Illegal Guns and Deterrence

[john hull]

--- Misha <[EMAIL PROTECTED]> wrote:
"They think that criminals like being killed"

Or perhaps it has to do with the nature of the threat.
 One would imagine that if murderers thought they had
a high probability of being caught, they'd not do the
crime.  However, an armed victim is a different story,
since the threat is so immediate--it's not that easy
to kill a person and the victim will probably have a
good chance to draw and fire a gun.

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Re: income and substitution effect

[john hull]

I'm not disagreeing, but I am curious: what would you
teach instead?  

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Re: income and substitution effect

[john hull]

--- William Sjostrom <[EMAIL PROTECTED]> wrote:
"On the other hand, if you have a group of business
students who have to take principles plus
intermediate, and never again take another economics
class, income and substitution effects seem like a
waste of time."

Have you heard the one about the pre-med student in a
physics class who, in a fit of frusteration, shouts
out, "Why do I have to take physics, anyway?  I'm
going to med school!"  And the prof says, "Requiring
physics is how they keep the stupid people out of med
school."

I'm not sure it's analogous, but what the hey

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RE: anecdotal concealed carry

[john hull]

--- Gil Guillory <[EMAIL PROTECTED]> wrote:
"One man I know was convicted of tax evasion, was on
the lam for almost 2 years with his wife (part of the
time in a cabin in the woods with his wife, reading
Bohm-Bawerk and Mises by night and hunting by
day)"

Hunting or poaching?

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Re: Advise to Journalists

[john hull]

-- George Berger <[EMAIL PROTECTED]> wrote:
"I found the article in the Economist, March 31, 2001,
pp. 20-22 stressing the relationship of  poverty and
lack of property rights (a short but neat summary of
De Soto's thesis in his new book The Mystery of
Capital) to be very useful. Good luck."

I always get a kick out of the reader reviews at
Amazon.com--always sort by lowest rating first. 
Here's my favorite of De Soto's book:

""The Mystery of Capital:Why Capitalism Trumphs in the
West and Fails Everywhere Else," by Hernando De Soto.
is a crock of... [he]argues the point, "The missing
ingredient for success with capitalism is ASSET
MANAGEMENT. Get real...asset mamagement is only one of
the many needed ingredients to trumph like the West!
Hello!!! "

Interestingly, even though the book is a "crock of..."
it still gets two stars!  Can you imagine the book
that gets one star?

BTW, the person who called De Soto's book an
"intellectual swindle" gave it three stars.

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Re: Advise to Journalists

[john hull]

I would suggest some intuitive economic fallacies.  I
don't have any off the top of my head, but I watched
part of an online lecture by a statistician who said
that the only way to get engineers to listen and learn
about probability is to show them a bunch of intuitive
fallacies.  That way you can shake them out of the "I
know calculus therefore I know everything" mindset
they seem to have.  (Her words, not mine.)

Maybe if you can hammer home a few examples of what is
obvious is not true will help them internalize the
idea that just being alive doesn't mean one
understands economics.

I bet Landsburg has some good ideas in the "Armchair
Economist".  I think slate recently published a column
by him about how more sex is safer sex.  Maybe an
intuitive signalling model showing why it is good to
give the "incompetent" cushy jobs to get them out of
the way of the really skilled.

That's the best I can offer.

-jsh

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Re: Lott

[john hull]

--- William Dickens <[EMAIL PROTECTED]> wrote:
"He represented himself as someone who had taken
courses from himself and presented testimonials about
his character from that persona. That isn't lying?"

Not about the issues involved.  The debate is about
violent crime, not Lott.  Frankly, given that he was
writing under a pen name, I think it is funny that
he'd make up a goofy little story about himself.  It
did have him saying to take listen to other economists
and get difference views after all.

If under his nom de plume, or however it's spelled, he
fairly represented the facts and arguments of the
gun-control debate, then he's committed no
transgression--other than having a little fun.

Probably the only reason he shouldn't have done it is
that the state of logical reasoning in our society is
so poor that ad hominems have considerable weight with
alot of people.  He has probably given fodder to those
whose rhetorical style is a little, for lack of a
better phrase, ad captandum vulgus.

"More to the point. Allowing a family member to submit
a review of a book under a false name is a pretty
serious breach of academic integrity."

To amazon.com?  I don't know about that.  The forum
operates under effective anonymity, with no
references, virtually no standards, and little (if
any) editorial review.  His kid writes a review and
submits it to amazon.com under his pen name?  I don't
see the harm.

I respect your view on this, but I strongly disagree
with it.  I see no reason to judge Lott poorly as a
result of this.

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Re: Lott

[john hull]

--- William Dickens <[EMAIL PROTECTED]> wrote:
"I'm quite sure that if this happened with a Brookings
scholar he would be fired. It will be interesting to
see what AEI does. Hats off to Sanchez at Cato for
discovering this."

Writing under a pen name while creating no lies
regarding the actual issues involved is a fireable
offense?!

-jsh


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Re: Economic anamolies and Kuhn

[john hull]

Assymetric information?  Lemon car markets & whatnot? 
(Signalling models?)  How fundamental is fundamental? 


There is a game theory text that assumes a certain
amount of irrational behavior to obtain its results. 
I can search the closet if you want.

Sorry I'm not more helpful,
jsh


--- fabio guillermo rojas
<[EMAIL PROTECTED]> wrote:
> 
> I'm teaching a course on the sociology of science
> and we read Kuhn's
> structure of scientific revolutions. FYI, Kuhn says
> that science is
> characterized by "paradigms" - most science works
> from basic assumptions
> justified by "model achievements." Scientific change
> occurs when anamolies
> - observations contradicting theory - undermine the
> "paradigm" and new
> ideas are adopted.
> 
> Can someone provide me an example of an anamoly from
> the recent history of
> economics that led to a fundamental change in
> economic theory?
> 
> Fabio 
> 
> 


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Re: SUVs

[john hull]

--- [EMAIL PROTECTED] wrote:
"Does anyone know if SUV owners drive more recklessly
than they would if they had a smaller and/or lighter
vehichle and if this causes more accidents in the way
that Peltzman found that seatbelts caused more
accidents?"

I've heard that they tend to drive the way one would
drive in a car, and since they aren't cars they get
into more rollovers.  I heard it from my dad who read
it in an industry newsletter, "Ward's Auto World,"
available here: waw.wardsauto.com .  Yep, that's waw
and not www.

I did a search and found this:
waw.wardsauto.com/ar/auto_buried_statistics/index.htm

"Statistically, the Camaro is the most dangerous car
on the road, and the Lincoln Town Car has a scary
driver fatality rate as well.

The Insurance Institute for Highway Safety (IIHS) says
the “highest death rates are in midsize sports cars.”
IIHS goes on to single out the Chevrolet Camaro,
Camaro convertible and Pontiac Firebird (which is the
same platform) saying they all “have very high death
rates in single-vehicle crashes, and that has been
true model year after model year.”

Wow, talk about a smoking gun.

Rollover deaths? The latest data compiled by IIHS says
Camaro has 104 rollover fatalities per million
registered vehicle years (PMRVY). The convertible has
167, while the Ford Explorer has 26 rollover
fatalities PMRVY. The Jeep Cherokee, another SUV some
folks think is dangerous, has only 15 rollover
fatalities PMRVY.

When you consider all types of crashes, in addition to
rollovers, the bodies pile up even more. Using the
latest data available, the IIHS says Camaros have a
driver death rate of 308 PMRVY, for all types of
crashes, more than three times the average of 89
deaths PMRVY.

Explorer has a death rate of 56 PMRVY. The Isuzu
Rodeo, which has not been demonized lately, has almost
double the fatality rate: 99 deaths PMRVY.

The stately Lincoln Town Car, while far less dangerous
to drive than a Camaro, or even an “average” car,
still has a death rate that “is surprisingly high” for
its segment, says IIHS: 77 deaths PMRVY.

Why aren't the National Highway Traffic Safety Admin.
or consumer advocates ordering investigations?

Kim Hazelbaker, a senior vice president at IIHS says
that — incredibly — just about everyone agrees that
“testosterone and alcohol” are the factors that kill
Camaro drivers, not mysterious “design defects.”

So-called “demographic factors” also explain the
higher-than-expected fatality rate for Town Cars: 56%
of people killed in Town Car crashes during '95-'98
were 65 years or older, compared with 15% of all
fatally injured drivers.

I looked up the federal government's Fatality Analysis
Reporting System (FARS) and found that the only people
as prone to killing themselves in car crashes as young
males are men over 80."

So maybe I'm wrong.  Regardless, it's a start.

-jsh


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Gametheory.net

[john hull]

I bumped into this site which some may find
interesting: www.gametheory.net

It includes:
Lecture Notes--Online notes for teaching game theory.
Pop Culture--Game Theory in books and movies.
News--Game theory in the news.
Games--Fun activities related to game theory.
Interactive Materials--Java applets and online games.
Quizzes & Tests--Evaluation materials, print and
online.
Books--Reviews of textbooks.
Links--Other resources on the web.

Enjoy!


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Re: are real estate markets competitive?

[john hull]

--- [EMAIL PROTECTED] wrote:
"I'm also reminded that, like one friend of mine,
people who work in small towns often buy an old farm
house and live in it, while contracting out to some
neighbor or farming friend to do a little bit of
farming on the land the buyer doesn't use for
residential purposes."

Is that what they call "gentleman farming"?


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are real estate markets competitive?

[john hull]

Howdy,

I was thinking about a self-assessment scheme I read
about once for property tax valuations.  That got me
wondering this: In most localities is seems that real
estate markets are pretty heterogeneous in terms of
both land characteristics and extant buildings, and
that the markets might often be pretty thin,
especially outside of urban areas.  Are those
"observations" accurate and if so can we conclude that
real estate markets aren't competitive, in the
economic sense of the word?

Curiously yours,
jsh

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study on whether phony degree helps??

[john hull]

Howdy,

A few years ago I read in the Christian Science
Monitor about a study that went approximately like
this:

The researchers compared income of those who had
college degrees and evidence of having actually with
those who claimed to have degrees but for whom the
college had no records of attendance, i.e. phony
degrees.  They also looked at income of of students
who went to college and earned no degree.  What they
found was that the degree itself had no significant
impact, but instead a strong correlation existed
between income earned and years attended.  In other
words, someone who attended for four years and didn't
get a degree could expect to make as much as someone
who went four years and got the degree as well.

Does anybody have any idea who did this study or where
I might find it?  I've searched CSM with no luck,
ditto for google.  I don't have access to any academic
resources like JSTOR (at least not locally, I have to
drive about an hour to the nearest community college).
 Any help would be greatly appreciated.

Best regards,
jsh

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Re: cost of changing a govt allocative decision

[john hull]

--- [EMAIL PROTECTED] wrote:
"I dont know how to account for the lack of credit to
Weber,can anyone offer any insight?"

No, but I love it when I think of something and then
find out later that someone respectable already
thought of it.  It makes me feel like I can have great
ideas too.  I found in fraternity life that is very
strong sculptor of a fraternity's "culture": what
happens in one semester is assumed by the new guys to
be standard procedure and their belief infects
everybody else.  I called it the tradition myth. 
Sometimes I notice it affecting public debate.  Use
the phrase, it may be my only chance to leave my mark
on the world--unless I can engineer a spectacular
"accidental" death.  (Anybody know where I can get a
huge rocket engine on the cheap?) :)


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Re: questions about dividend tax cut

[john hull]

--- john hull <[EMAIL PROTECTED]> wrote:
"Now the suprise tax cut comes into effect.  The price
of the stock should jump to P'=(1-0)D/r=D/r.  Thus,
there should be merely a one off jump in the share
price by the amount P'-P=[D/r]-[(1-T)D/r]=(D+T)/r."

Mistake #1, (D+T)/r is greater than the price itself. 
I don't think the rest depends on that.  Back to the
drawing board for that part.  Sorry about that.

-jsh


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questions about dividend tax cut

[john hull]

Howdy,

I have some questions about the dividend tax cut
(elimination).  Let's suppose that the elimination of
taxes on dividend income to stock holders is
instituded and it is a complete suprise to the public,
so that no adjustment can take place either in
expectation of it being passed, or after it is passed
but before it takes effect.  Let's also assume that
growth opportunities are not an issue, so the price is
wholly dependent on dividends.

If the price of a stock is the PV of the dividend
stream into the future, then should there merely be a
one time jump in the value of a stock as a result? 
More concretely, if the tax rate was T, then a
dividend was worth (1-T)D, where D is the amount of
the dividend.  And the present value of the
perpetuity, i.e. the dividend stream, would be
(1-T)D/r, where r is the interest rate (right?).  So
the price of the of the stock would be P=(1-T)D/r.  

Now the suprise tax cut comes into effect.  The price
of the stock should jump to P'=(1-0)D/r=D/r.  Thus,
there should be merely a one off jump in the share
price by the amount P'-P=[D/r]-[(1-T)D/r]=(D+T)/r.

Is this correct?  Should the tax rate on dividend
income be included in the pricing of the shares, and
should we see a jump in prices?  I suppose that
intstead of T:=tax rate on dividends, I could have
used T:=Td-To, where Td is the tax rate on dividends
and To is the tax rate on some "other" investment. 
Would that be correct?

Okay.  Assuming the above is correct, then the rate of
return on a stock should increase from (1-T)D/P to
D/P'.   The increase in the rate of return then is 

=[(1-T)D/P]-[D/P']
=[D/(D/r)]-[(1-T)D/{(1-T)D/r}]
=r-r
=0.

So the increase in the rate of return on stocks should
be equal to zero.  Stocks are no more profitable after
the tax cut than before--it shouldn't help the market
at all.

If dividend income tax is not priced into the stock,
then again, there should be no change in the
profitability of stocks, because P=P' and 1-0=1.

The same should be true if T:=Td-To, correct?

Is my conclusion that the dividend tax cut should have
no impact on the rate of return of stocks correct?  Is
the only effect of such a tax cut to provide a once
off permanent increase in the wealth of stock holders
as the price jumps from P to P', thus stimulating the
economy solely through the wealth effect of that
change?

If this conclusion is correct, how will loosening the
two assumptions, first that the cut is publicly known
before it takes effect and second that the present
value of growth opportunities are taken into account
in share pricing, affect the conclusion?  Will
loosening the second assumption change corporate
behavior viz. investing in growth vs. paying
dividends?  What should we expect that change to be?

Has this question already been asked on this list and
I missed it?

Curiously yours,
jsh


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Re: Babynomics

[john hull]

Fabio-

You may profit from visiting the page of an old prof.
of mine at Oregon,
http://harbaugh.uoregon.edu/index.htm , specifically,
his "Nanoeconomics? Pedianomics? The Economic Behavior
of Children Homepage", http://nanoeconomics.org/ .

I'm not sure what help it will be, but it's the best I
can do.

Best regards,
jsh


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Re: Lester's extreme compatibility thesis

[john hull]

What prevents a particular private law enforcement
agency from engaging in mob-style "protection"?  For
example, in Friedman's "Anarchy and Efficient Law", he
states that, "The most obvious and least likely is
direct violence-a mini-war between my agency,
attempting to arrest the burglar, and his agency
attempting to defend him from arrest. A somewhat more
plausible scenario is negotiation. Since warfare is
expensive, agencies might include in the contracts
they offer their customers a provision under which
they are not obliged to defend customers against
legitimate punishment for their actual crimes." 
(http://www.daviddfriedman.com/Academic/Anarchy_and_Eff_Law/Anarchy_and_Eff_Law.html)
 First, if war were so expensive relative to peace why
does it exist?  Maybe peace is more expensive, in
terms of risk for example, than open warfare.  Second,
I might say that going to war isn't expensive, going
to war against ME is expensive, because I'm going to
recruit the demons who walk the earth.  I won't put
Charles Manson in jail, I'll put him on the payroll.

This is an honest question, one that has been vexing me.

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Re: News Coverage and bad economics

[john hull]

--- [EMAIL PROTECTED] wrote:
"...shall I just unsubscribe then?"

No.  Although when you go on about "statists" you do
sound a little like Marxists when they go on about
"captialists". :)

-jsh


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RE: News Coverage and bad economics

[john hull]

Gil-
Your point is well taken.  I recently read a fine
quote from Noam Chomsky about how mathematicians
listen to him and consider his arguments, whereas
political experts on the Middle East attack his lack
of credentials.  I suppose I should have noted that
those self-proclaimed traffic experts didn't have a
clue, and through their efforts they made the streets
of the city where I worked both more clogged and more
dangerous (especially for children).  I would guess
that at least 90% of the amateur traffic analysis in
the city was dead wrong.  Indeed, one way to get a
citizen to quit complaining about the speeding on his
street is to loan him a radar gun and let him find out
for himself that a stationary observer is a
notoriously bad judge of automobile speed.  Since
alternative medicine doesn't have double-blind
research backing it up, my opinion of it tends to be
similarly dismal.  And so on.

That's not to say that self-educated or insightful
amateurs cannot be informed and informative.  I'd say
the contrary is true; they can be very informed. 
However, Feinman's admonition for viewers of his
lectures "The Character of Physical Law" not to send
in letters suggesting methods of solving the puzzles
of modern physics makes me wonder about the ratio of
the "good" amateurs to the "bad" amateurs.  For
traffic in northern Michigan, I'd say the ratio is
roughly 1:9.

Best wishes,
jsh

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Re: News Coverage and bad economics

[john hull]

--- [EMAIL PROTECTED] wrote:
"As Steven Landsburg has pointed out, why is it that
everyone feels entitled to speak about economic
matters when they are not economists?  No one asks non
doctors to get up and speak about medical issues."

What about "alternative" medicine?  When I was doing
traffic, every Tom, Dick, & Harry to come in the door
seemed to earnestly believe that driving a car was
sufficient qualification for deciding speed limits &
stop sign patterns.  I imagine every profession can
legitimately offer up the same complaint, although
that doesn't make it any less frusterating.

(One of the engineers I worked for frequently
complained about every layperson thinking she was an
expert, yet he also frequently offered up his
expertise on things he knew nothing about, like
psychology & finance.  He never got the irony.)


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Re: Politics and Game Theory

[john hull]

I don't know the answer to the problem as you stated
it.  I did, however, recently work for a state Senate
campaign and asked alot of questions.  One thing they
told me was that negative advertising only puts doubt
in the mind of the unaligned voters regarding the
opponent rather than winning any voter's support.

As an example, here in Michigan, Dick Posthumus was
trailing Jennifer Granholm in the polls by quite a
bit.  The Posthumus campaign ran no positive Posthumus
ads for quite some time, instead running negative ads
about Granholm in the hopes of getting unaligned
voters to abandon her.  Once the polls showed that
alot of unaligned voters had become undecided again,
the Posthumus campaign started in on the positive
Posthumus ads to win those undecided voters over.  In
the end the results were close.

I know that doesn't help solve the problem as you
worded it, but perhaps the payoffs are different from
what your example assumed.  So any candidate trailing
in the polls will run negative ads to make the
unaligned voters become undecided again.  Once that is
accomplished, all candidates must begin competition
all over again for those votes.  With three viable
candidates, I suppose the two trailing ones must play
a game of brinkmanship, waiting for the other to go
negative, and cash in on the newly dislodged voters.

-jsh

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behaviorism & economics

[john hull]

I've been wondering how something from the world of
behavioral psychology would fit the world of
economics.  The spanking article brought it to the
surface.

Positive reinforcement means that you give something
"good" after a behavior that you wish to occur with
greater frequency.  Hence positive, you apply
something, and reinforcement, you reinforce the
behavior.  If I get an animal, let's say a rat, to do
something for reinforcement, e.g. food, I can start to
increase the number of times the behavior needs to be
performed before giving the food.  So if my rat
presses a lever once and I give it food, I can wait
until it presses twice before giving it food once the
reinforcement for pressing once is well established. 
Once press twice=food is established, I can increase
it to thrice, and so on.  So for a set quantity of
food, I can get increasing amounts of lever presses
from my rat!

This is not unique.  Suppose a kid screams once and
the parents gives it candy.  Then the parent decides
not to cave so the kid screams a couple of times and
the parent gives in and gives it candy.  Now the
screaming behavior is stronger.  Next time the parent
decides to not cave in, the kid will scream even
longer.  If the parent caves in after an even longer
time, the screaming will be even more strongly
reinforced, and so on.

What I'm wondering is, does this seem interesting from
an economic point of view?  Is this something worth
modeling, and how would it be modeled?

Best regards,
jsh


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anyone speak Swedish?--not econ

[john hull]

Hi,

Sorry about the intrusion.  I keep getting email from
Target in Swedish, at least I think it is since the
return address ends in a .se.  Anyway, I can't read it
to figure out how to unsubscribe.  Can anyone help me?

Best wishes,
-jsh

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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- Fred Foldvary <[EMAIL PROTECTED]> wrote:
"There are indeed differences in costs [of taxes],
based on subjective preferences, i.e. the utility of
money relative to the item in kind.

The burden on a horse of carrying a saddle depends not
just on the weight of the load, but also how it the
weight is distributed."  

Right, that's what I was thinking.  Let's use a
transfer for example, if I receive a transfer of
$1,000 I can split it up however I want, maybe half on
housing and a quarter each on medicine and food.  But
if I'm given $1,000 in housing, I'm not as well off as
I would be with the cash because I that much housing
is sub-optimal for me.  So the in kind transfer of
equal dollar value is actually worth less to me.  I
assumed that a in kind vs. cash tax would be similar,
with in kind taxes being more of a burden.

-jsh

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Re: reaganomics--elementary question

[john hull]

--- Francois-Rene Rideau <[EMAIL PROTECTED]> wrote:
"As a historical note abou the Laffer curve, it's
interesting to see that the phenomenon was already
described by Bastiat in his 1847-02-21 article..."

Wow.  That is interesting.  Thanks for pointing it
out!

-jsh

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reaganomics--elementary question

[john hull]

Me again,

Did "Reaganomics" essentially hinge on the Laffer
Curve (i.e. the elasticity of tax receipts w/ respect
to tax rate [?]), and its implications regarding tax
revenue?  Or was there alot more to it than that?

Sorry about clogging your boxes--I'll mellow out for a
while,
-jsh

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Median voter thm. Elementary question

[john hull]

Howdy,

I've never really studied the Median Voter Theorem. 
Recently I read where someone claimed that the U.S.
political system was designed to keep the two parties
nearly identical by keeping other parties out.  I
assumed that the reason they Dems & Reps seem so close
may be because of the MVT--they want the middle guy's
vote.  So then I thought, suppose a third party were
let into the race, does the MVT still hold w/ for 3 or
more candidates?  Does it weaken as more candidates
are added, or do they all bunch toward the center for
for any n>2, where n is the number of candidates? 
Does anybody know of a good discussion of it online?

-jsh

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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- [EMAIL PROTECTED] wrote:
"'Actually it would be interesting to hear someone
delinate a clear distinction between taxation on money
and taxation in kind.'...I'm inclined to think there
is no clear distinction,which is why I asked the
original author of the comment (js I believe) to
provide one."

I don't think it was me, I think it was in response to
something I wrote.

Aren't payments in kind worth less than payments in
cash, when the value is a significant portion of one's
income, because they impose the consumption decision
(for lack of a better term) on the individual?  I
thought I remember learning how that was modeled, but
it was a while ago.  If that is true, then maybe taxes
in kind may be analogous?  Just a guess.

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Mach. quote--off topic??

[john hull]

Hey,
Since Brian isn't here to keep us in line, I decided
to change the subject heading to make it easy to
identify and delete if one so chooses.


--- Akilesh Ayyar <[EMAIL PROTECTED]> wrote:
"Hi there. I'm not sure where the Machiavelli quote
comes from, but are you sure he wasn't arguing, by a
kind of appeal to majority opinion, that there is no
debt to people who have done no wrong?" 

Good question.  I almost panicked when I read it.  I'm
reading it from Niccolo Machiavelli, "The Discourses"
translated by Leslie J. Walker, Penguin Classics 1983.
 Page 154.  Let me reproduce the paragraph:

"In addition to the difficulty already mentioned [in a
state going from servitude to freedom] there is yet
another.  It is that the government of a state which
has become free evokes factions which are hostile, not
factions which are friendly.  To such hostile factions
will belong all those who held preferment under the
tyrannical government and grew fat on the riches of
its prince, since, now that they are deprived of these
emoluments, they cannot live contented, but are
compelled, each of them, to try to restore the tyranny
in order to regain their authority.  Nor, as I have
said, will such a government acquire supporters who
are friendly, because a self-governing state assigns
honours and reward only for honest and determinate
reasons, and, apart from this, rewards and honours no
one; and when one acquires honours or advantages which
appear to have been deserved, one does not acknowledge
any obligation towards those responsible for the
remuneration.  Furthermore, that common advantage
which results from a self-governing state is not
recognized by anybody so long as it is possessed - the
possibility of enjoying what one has, freely and
without incurring suspicion for instance, the
assurance that one's wife and children will be
respected, the absence of fear for oneself - for no
one admits that he incurs an obligation to another
merely because that other has done him no wrong."(Any
typos are my own.)

Since he asserts the existence of a common advantage
and that no one recognizes it, I think I did the
passage justice.  Would you agree?  I certainly don't
want to do violence to an author's work.

I've heard that Walker's translation isn't the best,
but I've not encountered any others.

Best regards,
jsh


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Re: Bottle Deposits

[john hull]

--- Anton Sherwood <[EMAIL PROTECTED]> wrote:
"I think it's a nickel - but either way, there's no
obvious way to recover it."

I can see how that wouldn't encourage recycling.

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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

If you really believe that taxation by a
representative (and constitutional) government is
equivalent to putting a gun to one's head, then we
have a lot of issues regarding the nature, legitimacy,
and role of government to work out before we can
fruitfully address the current question.

That has not been said in any pejorative sense; I have
great respect for your opinion.  

-jsh

--- [EMAIL PROTECTED] wrote:
> 
> In a message dated 12/3/02 2:51:15 AM,
> [EMAIL PROTECTED] writes:
> 
> << --- david friedman <[EMAIL PROTECTED]>
> wrote:
> "My point is that moral worthiness isn't being
> predicated of the newborn infant or fertilized ovum
> but of the adult that it turned into. Whatever the
> reasons are that I am cruel and dishonest, cruel and
> dishonest people deserve to have bad things happen
> to
> them. That, at least, is a moral intuition that many
> people find convincing."
> 
> Well put.  I'm not an existentialist, but I do agree
> to at least some extent that we make our own moral
> choices.  
> 
> My point is merely that, since some of who we become
> is the product of things outside of our control,
> even
> hard-hearted* policies should have a soft edge.
> 
> -jsh >>
> 
> Well let's say that it turns out that my poverty
> isn't due to my laziness and 
> weakness, as my family always thought, and instead
> because I have obsessive 
> compulsive disorder, manic depression (called
> "biploar disorder" by the 
> politically correct these days), attention deficit
> disorder and a panic 
> disorder (apparently there's more than one so I'm
> not sure which one I might 
> have).  We might all agree that I deserve better
> than what I've been able to 
> manage for myself and that I didn't ask to be a
> bundle of mental illnesses.  
> Now how does any of that give me the right to point
> a gun at you and force 
> you to give me your money?  Since I don't have that
> right myself, how could I 
> possibly delegate it to the government to extort
> money from you on my behalf? 
>  It's certainly not your fault I'm a basket case.
> 
> DBL
> 


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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

I apologize for being flip.  I hope I did at least get
a smile.

Seriously, I think that I tend to believe, and I think
what Machiavelli was driving at, is that in a free
society we all agree to participate peacefully and not
try to usurp power and authority.  The 2000 election
was a good example, in my limited judgement, because
it seems that in many places (and eras) an event like
that could have easily occasioned serious violence.  

The logical leap to the case of the bum I assume is my
own.  I cannot ask Machiavelli how he feels about it. 
When I see a bum begging, it seems to me that he could
just as easily prey on innocent people as pray for
their goodwill.  Of course, one could argue that the
penalty for crime is severe and it is better to be an
honest beggar than an inmate.  I question the weight
of this argument since crime (for lack of a better
term) seems to be endemic to the human condition.  

The peaceful beggar doesn't seem to benefit too
greatly from society's largesse.  Through a series of
bad decisions, a few strokes of bad luck, or an
inability to obtain adequate mental health care, inter
alia, he has become homeless and remedy has not been
obtained--since he remains homeless.  Yet he still
participates in civic society.  Were I in his place,
I'm not so sure I'd be so civil.

This does not make the bum "superior" to me.  I could
easily view him as a non-productive blight offensive
to the eye and (yuck!) nose, and seek to have him
banished through my influence with the polity or by
threats and harassment.  But I don't.  Hence, I
consider the debt to be reciprocal.

Does that make sense?  It's one of those things that
is difficult for me to put into words.  To put another
way, "every civil member of a free and civic society
owes a debt to every other civil member" seems to me
to be a guideline far superior to the Golden Rule.

-jsh


--- [EMAIL PROTECTED] wrote:
> 
> In a message dated 12/3/02 2:51:56 AM,
> [EMAIL PROTECTED] writes:
> 
> << --- [EMAIL PROTECTED] wrote:
> "'As Machiavelli pointed out, no one is willing to
> admit the debt that they incure to those who choose
> option #1.
> -jsh' 
> What debt is that?"
> 
> Exactly. >>
> 
> No, seriously, how do I benefit others by begging? 
> Do I give them a needed 
> sense of superiority?  Or do I serve as an excuse
> for government to steal 
> your money and give it to bureaucrats in the name of
> helping me?
> 


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Re: Bottle Deposits

[john hull]

I'm in Michigan.

I could have sworn that there was a one cent deposit
in California.  Maybe I'm mistaken.

-jsh


--- Anton Sherwood <[EMAIL PROTECTED]> wrote:
> john hull wrote:
> > I have nothing economic to offer, but only the
> > observation that the effects of having bottle
> deposits
> > have been striking.  I recall as a kid that litter
> in
> > the form of bottles and cans was ubiquitous, now
> > returnable are rarely seen as litter.  Bottles
> that
> > don't have deposits associated with them, such as
> > bottled water, I see not infrequently on the
> ground.
> 
> In California, I have no idea where to turn my
> bottles in.
> (Haven't noticed whether the distribution of litter
> has changed;
> the deposit law came in two or three years after I
> moved here.)
> 
> Where are you?
> 
> -- 
> Anton Sherwood, http://www.ogre.nu/
> 


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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- david friedman <[EMAIL PROTECTED]> wrote:
"My point was that, while the first cause, considered
alone, leads to the conventional conclusion that we
can increase utility by transferring from rich to
poor, the second leads to the opposite conclusion."

Oh, okay.  My bad.  Sorry about that.

-jsh


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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- david friedman <[EMAIL PROTECTED]> wrote:
"My point is that moral worthiness isn't being
predicated of the newborn infant or fertilized ovum
but of the adult that it turned into. Whatever the
reasons are that I am cruel and dishonest, cruel and
dishonest people deserve to have bad things happen to
them. That, at least, is a moral intuition that many
people find convincing."

Well put.  I'm not an existentialist, but I do agree
to at least some extent that we make our own moral
choices.  

My point is merely that, since some of who we become
is the product of things outside of our control, even
hard-hearted* policies should have a soft edge.

-jsh

*I don't like the term "hard-hearted."  It reminds me
of PETA: c'mon! Is anybody really for the UNethical
treatment of animals?  Or do we just have different
standards of ethical?

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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- [EMAIL PROTECTED] wrote:
"'As Machiavelli pointed out, no one is willing to
admit the debt that they incure to those who choose
option #1.
-jsh' 
What debt is that?"

Exactly.

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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- david friedman <[EMAIL PROTECTED]> wrote:
"One strong moral intuition, although not the only
one, is that you deserve what you create--that people
who make a large contribution to the society deserve a
large reward. How large a contribution you make
depends on a variety of factors, none of which the
hypothetical disembodied identity that represents you
stripped of all genetic and environmental
characteristics "deserves" to have, some of which are
characteristics of that identity with genetics added,
some of that with genetics and environment added, and
some pure luck.
...
If you find this way of thinking of it entirely
implausible, consider Nozick's example of two men,
each of whom is entitled to is current assets by
whatever the morally correct rule may be, who bet a
dollar on the flip of a coin. Nobody will say that one
of them deserved to win the bet. Yet most of us would
say that the one who wins the bet is entitled to have
the dollar. And if the previous distribution was just,
and just distributions cannot depend on morally
irrelevant criteria such as luck, that means that we
have just approved a move away from a just
distribution."

In the first quoted paragraph, you say that at least
some of what determines how well a person can
contribute is associated with luck and forces beyond
that person's control.  In the second, you imply that
these outcomes of chance are analogous to a small bet
between two consenting adults.  I don't see the
analogy.  

To say that the person one becomes determines what
this person deserves is reasonable, but not as an
absolute.  The person one becomes is a product of
myriad factors, many of which are outside said
person's control.  Suppose that a person is born into
a family of Philistines--truly ignorant buffons and
semi-literate at best.  Odds are that this person will
not enjoy the same fruits as a more-or-less identical
person born into a family of doctors, judges, and
industrialists.  To say that the first person deserves
less and the latter more smacks of punishing a child
for the crimes of a parent.  It certainly doesn't
sound like like consenting adults making a small bet
on the flip of a coin.

-jsh


=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- david friedman <[EMAIL PROTECTED]> wrote:
"Suppose we instead assume that everyone has the same 
ability to convert leisure into income"

I'm not disputing the logic.  The assumption does seem
awfully unrealistic.  All zygotes are created equal,
except the ones with the wrong number of chromosones
(oh, and maybe not some with nasty genetic
predispositions), but the family one comes into along
with a host of factors beyond one's control do play a
role in affecting who one becomes, including the
ability to convert leisure into income.

-jsh


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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- Jacob W Braestrup <[EMAIL PROTECTED]> wrote:
"'John Hull wrote:...'
Assuming you are not just joking, this implies that
things such as "ability to atract mates" should be
taken into account when redistributing income today."

Mostly joking.  I was more concerned with the idea
that forcing marriage on people was the only way to
level the playing field for mates.  It does seem that
fincanial security & luxury goods really can "sweeten
the deal," at least for some people.  

That's not to say that such a program would be
practical.  However, ugly people do get shafted in
life.  If that could be reasonably accounted for as a
component in a redistribution scheme that met the
approval of the polity, then I probably wouldn't
oppose it.  

"...it would be unfair to take money from a rich, ugly
man (or woman)..." 

They'd just pay less in taxes than a rich, beautiful
person.

-jsh

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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- Alypius Skinner <[EMAIL PROTECTED]> wrote:
"But what if this ugly guy isn't rich--oh! You mean 
pecuniary benefits taken from *other* people--purely
through voluntary donations of course.  After all, you
consider force to be (morally?) "bad."  I'm just
looking for some consistency here."

That's funny.  I'm assuming that I don't really need
to justify why I feel there is a difference between
taxation & sexual slavery.

-jsh










> 
> 
> 
> John Hull wrote:
> >
> > --- Jacob W Braestrup <[EMAIL PROTECTED]> wrote:
> > "Would we ever say: "Uhhh, this guy is ugly and no
> > good, bad mannered and ill tempered - but, it's no
> > fault of his own, and he REALLY doesn't enjoy the
> > competition for sexual partner forced upon him by
> > society, so why don't we just force this beautiful
> > girl to have sex with him""
> >
> > Um, no.  Force would be bad.  You could sweeten
> the
> > deal for her, however, using perhaps pecuinary
> > benefits to level the field.
> 
> But what if this ugly guy isn't rich--oh! You mean
> pecuniary benefits taken
> from *other* people--purely through voluntary
> donations of course.  After
> all, you consider force to be (morally?) "bad."  
> I'm just looking for some
> consistency here.
> 
> But what happens if there aren't enough people who
> are willing to donate?
> 
> ~Alypius Skinner
> 
> 


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RE: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- Grey Thomas <[EMAIL PROTECTED]> wrote:
"(1)you can choose to be homeless, take no jobs nor
responsibility, and peacefully beg from others who,
"if it's voluntary", can give to you (or not) with no
moral problems. (This includes living with parents or
other loved ones, from whom receipt of resources isn't
quite begging from strangers.) (2) You can become a
thief, and take other's property by force/ fraud/ in
secret -- illegally, until you get caught & punished."

As Machiavelli pointed out, no one is willing to admit
the debt that they incure to those who choose option
#1.

-jsh

=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- Jacob W Braestrup <[EMAIL PROTECTED]> wrote:
"My point with the example is this: when there are so
many things in life that are blatantly "unfairly" (if
you believe in equality) distributed among us, [1]why
this preoccupation with wealth / income -
[2]especially when it is conceeded that effeorts to
redistribute existing income / wealth will inevitably
reduce future income / wealth."

1: My guess: Because wealth & income are relatively
easy to measure objectively, as opposed to "mate
satisfaction."  So it is an easy proxy.  It seems to
be a fairly good one, too, since money is a numeraire
good.

2: Does the logic/math of the 2nd Fund. Welfare Thm.
imply that lump-sum redistribution, so that a more
"favorable" market outcome obtains, necessarily lowers
output?  Optimization is still a calculus problem
after all.

-jsh


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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- david friedman <[EMAIL PROTECTED]> wrote:
"To put it differently, once you take the determinist 
position"

And if we take the free will position, can't we just
as easily come to the defense of Aristotlean (sp?)
physics where a thrown rock moves of its own impetus
until it 'decides' that it no longer has impetus and
falls straight to the ground?

Acknowledging that humans are the products of their
environments, and allowing for that, does not imply
that a radical determinist approach to life is
necessary.  At least, it isn't obvious to me.

-jsh


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Re: A Short Review of *Hard Heads, Soft Hearts*

[john hull]

--- Jacob W Braestrup <[EMAIL PROTECTED]> wrote:
"Would we ever say: "Uhhh, this guy is ugly and no
good, bad mannered and ill tempered - but, it's no
fault of his own, and he REALLY doesn't enjoy the
competition for sexual partner forced upon him by
society, so why don't we just force this beautiful
girl to have sex with him""

Um, no.  Force would be bad.  You could sweeten the
deal for her, however, using perhaps pecuinary
benefits to level the field.  That's one possibility. 
Whichever you choose, hurry up!  I need the help.

-jsh



> Wei Dai wrote:
> 
> > People don't mind competition if it's voluntary,
> but you can't opt 
> out of 
> > economic competition. I think it's a necessary
> evil, not something to 
> be 
> > desired for its own sake. Clearly some people do
> enjoy competition, 
> and 
> > they should certainly be able to participate, but
> what's the point of 
> > forcing competition on people who hate it, besides
> efficiency?
>  
> While it is may be true that many people do not
> "enjoy" the economic 
> competition "forced" upon them by "society" (but
> they surely benefit 
> from the positive externalities of this
> competition), is this any 
> ground for political action??
> 
> There are many other "forced" kind of competition,
> that we (thankfully) 
> do not consider grounds for redistribution - like
> the competition for 
> mates. (I think I have stolen this point blatantly
> from Nozik, sorry).
> 
> Would we ever say: "Uhhh, this guy is ugly and no
> good, bad mannered 
> and ill tempered - but, it's no fault of his own,
> and he REALLY doesn't 
> enjoy the competition for sexual partner forced upon
> him by society, so 
> why don't we just force this beautiful girl to have
> sex with him"
> 
> I DON'T THINK SO! And if you look at it, the case
> for "redistribution" 
> is in fact stronger in the case of sexual partners
> than in the case of 
> economic competition, since the loosers in the
> latter game, will at 
> least benefit from the positive externalities of
> economic competition, 
> while the loosers of the sex-game will get NOTHING!
> 
> - jacob braestrup
> 
> 
> 


=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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John Rawls died

[john hull]

www.iht.com/articles/78308.html

"  NEW YORK John Rawls, 82, the American political
theorist whose work gave new meaning and resonance to
the concepts of justice and liberalism, died Sunday at
his home in Lexington, Massachusetts.
.
His wife, Margaret, said he had been incapacitated
since suffering a stroke in 1995.
.
The publication of Rawls's book "A Theory of Justice"
in 1971 was perceived as a watershed moment in modern
philosophy and came at a time of furious national
debate over the Vietnam War and the fight for racial
equality. Not only did it veer from the main current
of philosophical thought, which was logic and
linguistic analysis, it also stimulated a revival of
attention to moral philosophy. Rawls made a
sophisticated argument for a new concept of justice,
based on simple fairness.
.
Before Rawls, the concept of utilitarianism, meaning
that a society ought to work for the greatest good of
the greatest number of people, held sway as the
standard for social justice. He wrote that this
approach could ride roughshod over the rights of
minorities and meant that the liberty of an individual
was of only secondary importance compared with the
majority's interests.
.
His new theory began with two principles. The first
was that each individual has a right to the most
extensive basic liberty compatible with the same
liberty for others. The second was that social and
economic inequalities are just only to the extent that
they serve to promote the well-being of the least
advantaged.
.
But how could people agree to structure a society in
accordance with these two principles? Rawls's response
was to revive the concept of the social contract
developed earlier by thinkers like Thomas Hobbes, John
Locke and Jean Jacques Rousseau.
.
For people to make the necessary decisions to arrive
at the social contract, Rawls introduced the concept
of a "veil of ignorance." This meant that each person
must select rules to live by without knowing whether
he would be prosperous or destitute in the society
governed by the rules he chose. He called this the
"original position."
.
An individual in the "original position" would choose
the society in which the worst possible position -
which, for all he knows, would be his - was better
than the worst possible position in any other system.
The result, Rawls argued, was that the least fortunate
would be best protected. The lowest rung of society
would be higher. Though inequalities would not be
abolished by favoring the neediest, they would be
minimized, he argued. In later works, Rawls expanded
his arguments to suggest how a pluralistic society
could be just to all its members. His idea was that
the public could reason things out, provided that
comprehensive religious or philosophical doctrines are
avoided. Like Kant, whom he revered, Rawls believed
that as liberal democracies capable of such
reasonableness spread, wars would be avoided.
.
Eugene Rostow, 89, led agency on arms control in
Reagan era
.
WASHINGTON:Eugene Rostow, 89, a legal scholar who
helped create Yale Law School's current eminence and
became a vigorous defender of the Vietnam War as a
senior State Department official, died Monday at an
assisted-living residence in Alexandria, Virginia.
.
Like his more famous younger brother, Walt, who was
President Lyndon Johnson's national security adviser
and an architect of the administration's Vietnam
strategy, Rostow, who served as undersecretary of
state for political affairs, was part of a generation
of hawkish Democrats. Deeply influenced by World War
II, they saw fighting communism in Southeast Asia as
central to a policy of global containment.
.
The Brooklyn-born son of a Socialist, who named him
for the party's presidential candidate, Eugene Victor
Debs, Rostow exemplified the strain of hard-headed
Democratic thinking on foreign policy and defense that
flowered in the 1960s. He ended his public career as
director of the Arms Control and Disarmament Agency in
the Reagan administration. He was also an affable and
erudite scholar, with a taste for bow ties and vests,
fine food and wine, who as dean of Yale Law School
from 1955 to 1965 built up its endowment. He was
renowned for recruiting more than a dozen top legal
scholars in 1956, during a period of turmoil at the
school over the lack of promotions for faculty members
who had clerked for liberal justices.(NYT) "

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Re: Limited Liability for Vaccine Makers

[john hull]

William Dickens <[EMAIL PROTECTED]> wrote:
"Can your friend explain why vaccines are different
from other drugs?"

While I'm certainly not qualified to negotiate that
legal minefield, may I guess?  I'd say that a drug is
intended to fix an existing problem, whereas a vaccine
applies a "dangerous" element to prevent possible
future risk.  Thus one who gets sick from a vaccine*
can claim that absent the vaccine, the illness would
not have occured; however, with other drugs the person
was already sick and something had to be done.

It sounds like a stretch, to be sure, but then the
claim that putting a car in drive and pushing the
accelerator literally through the floor board is
consistent with an automatically accelerating car is a
bit of a stretch as well.  Yet Audi lost to such a
claim.

-jsh

*Here's an unsettling tidbit:
"But there would be panic [from smallpox terror
scares]. Mass vaccination would be demanded, and
politicians would find such calls very difficult to
resist. They should remember, however, that when
millions of people were vaccinated in response to the
outbreak in Britain in 1962, nearly as many died from
its complications as from smallpox itself."
www.lrb.co.uk/v24/n17/penn01_.html

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Re: Bottle Deposits

[john hull]

I have nothing economic to offer, but only the
observation that the effects of having bottle deposits
have been striking.  I recall as a kid that litter in
the form of bottles and cans was ubiquitous, now
returnable are rarely seen as litter.  Bottles that
don't have deposits associated with them, such as
bottled water, I see not infrequently on the ground.

Interestingly (to me), is how bottle and can deposits
also act as sort of a transfer.  I don't think there
is a university in Michigan where there isn't a "can
man" who collects cans from classrooms where students,
figuring that it isn't worth $0.10 to carry a bottle
home with them, have left many behind.  And I recall
one summer in California, where the deposit is only a
penny, seeing the garbage bins behind bars and
restaurants being looted by the less-than-well-to-do.

As far as efficiency is concerned, I'm no help.  But
living with bottle deposits suggests that they work so
well that I wish the state would legislate cigarette
filter deposits.

-jsh

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Re: The Cigarette Standard

[john hull]

--- Fred Foldvary <[EMAIL PROTECTED]> wrote:
"That is a benefit. A good currency is a widely
traded, useful, commodity. That's why salt, cocoa
beans, cattle, etc., were used as money. Having a
consumer use anchors the value of the currency."

Good point.  Thanks!

-jsh

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Re: Incentives

[john hull]

Psychologists have conducted experiments where the
subjects are (randomly) split into two categories. 
They both perform the same task, perhaps a memory
drill, and then one group gets paid money for
participating and the other doesn't.  After the
"experiment," i.e. the task that the subjects were
told was the experiment, the subjects are interviewed.
 One of the questions asks how much they enjoyed the
experiment.  Subjects who were paid money enjoy the
task significantly less than those who aren't.

The theory behind this is that when a person does the
task, their mind needs a reason to avoid cognitive
dissonance.  When they are paid, the money acts as the
reason; when they aren't paid, enjoying the task acts
as the reason.  To put another way, one's mind imposes
enjoyment ex post, so that it doesn't have to cope
with the disconnect of doing something for no good
reason and disliking doing it.

Hazing rituals are supposed to perform a similar
function.  If one puts up with the hazing, it must be
for a good reason.  Therefore, the group that does the
hazing, the frat, military academy, or whatever, is
seen in a better light to avoid the cognitive
dissonance.

Don't judge this theory based on my explanation of it.
 As I've noted before, I'm a clumsy writer at best. 
But that is the theory as I recall it.

Whether grades fit the theory, I haven't a clue.

Hope that helps,

-jsh


--- [EMAIL PROTECTED] wrote:
> The following appeared in an article on grade
> inflation in the Chronicle of 
> Higher Education:
> 
>   "Grades motivate (a fallacy
> according to the article). 
> 
>   With the exception of orthodox
> behaviorists,
> psychologists have come to
> realize that people can 
> exhibit
> qualitatively different kinds of
> motivation: intrinsic, 
> in which the task
> itself is seen as valuable, and
> extrinsic, in which the 
> task is just a
> means to the end of gaining a
> reward or escaping a 
> punishment.
> The two are not only distinct
> but often inversely 
> related. Scores of
> studies have demonstrated, for
> example, that the more 
> people are
> rewarded, the more they come to
> lose interest in whatever 
> had to
> be done in order to get the
> reward. (That conclusion is 
> essentially
> reaffirmed by the latest major
> meta-analysis on the 
> topic: a review
> of 128 studies, published in
> 1999 by Edward L. Deci, 
> Richard
> Koestner, and Richard Ryan.)"
> 
> Is anyone on the list familiar with this literature?
>  It sounds like they are 
> saying that incentives don't matter.
> 
> Cyril Morong
> 


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Re: Cost vs. Price or "Flatland"

[john hull]

Suppose I can spend $10 on a widget that I want or
invest the $10 at the best possible rate.  The
invested money will grow to, let's say, $100 in some
period of time.  But that $10 isn't worth $100 today,
it's only worth $10 today.  The widget and the
investment have the same** value today, right?  Even
though I won't be able to resell the widget for $100
in the future, I do get the use of the widget, as
opposed to my invested $10 which doesn't do anything
for me until I cash it in.  So the $225,000 you could
obtain on your death-bed is only worth $250 today, the
same as the plane ticket.  And if you buy the ticket,
you get to go to Hawaii, to boot.  That's not to say
that one shouldn't plan for the future, but one
shouldn't sell out the present for the benefit of the
future, either.

If someone is willing to make a bet with you, you
should wonder if maybe she knows something you don't. 
I don't think the same is true with sales & bargains. 
Hal Varian briefly mentions his theory of sales in
this paper: www.sims.berkeley.edu/~hal/Papers/how.pdf
.  I don't have the resources to locate the Theory of
Sales paper itself.

--jsh

**Okay, okay.  They won't have the same value if I'm
not the marginal purchaser, or whatever.



--- Jonathan Kalbfeld <[EMAIL PROTECTED]>
wrote:
> I recently obtained my series 7 license, but during
> the six weeks of
> studying, a great deal of my material involved
> economic impact of various
> fiscal and monetary policy, and also of course the
> laws of compounding
> interest.
> 
> I think I figured out the problem with society
> today.  Business prays on
> countless individuals who can not distinguish the
> difference between cost
> and price.  Of course there's no need to define
> those terms on here, but
> it occurred to me that while I can spend $250 on a
> plane ticket now, I
> will have paid $225,000 for that plane ticket by the
> time I am dead.
> 
> This has become a very big problem for me, because I
> don't want to spend
> any money.  Not one red cent.  I don't enjoy
> anything because all I can
> see any more is opportunity cost.  I have gotten to
> the point in my life
> where I can't enjoy anything--probably not even a
> weekend in Hawaii
> because I see it as a missed investment opportunity.
> 
> I look at every single "bargain" or "sale" with the
> eyes of a skeptic,
> knowing that the counter-party in the transaction
> must have a reason for
> what they are doing.  They must see this item as
> worth less than what they
> are selling it for so why should I buy it for the
> sale price?
> 
> I feel much like the main character of Flatland who
> is suddenly bumped
> into the third dimension by a strange object, gets
> catapulted above the
> normal 2-dimensional plane, and can never look at
> his world the same way.
> 
> Does anyone else feel like this?
> 
> jonathan
> 
> --
> Jonathan KalbfeldM268@>6]U('!L87D@=&AI ThoughtWave Technologies LLC
> (v) +1 415 386 UNIX  97-S86=E(&)A8VMW87)D UNIX, Networking, Programming
> 
> 


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Re: The Cigarette Standard

[john hull]

<[EMAIL PROTECTED]> wrote:
"It seems like the cigarette is everything a good
solid currency needs to be"

Except that you can't smoke your cigarettes and have
them, too.  A researcher with alot of smokes could
probably come up with some interesting monetary theory
experiments.

-jsh


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RE: Increase in the flow of communication since 1970

[john hull]

--- Grey Thomas <[EMAIL PROTECTED]> wrote:
"I'm sorry that I didn't immediately find the internet
map showing the transfer of giga- and tera- bytes of
data.  I've seen such before, such info maps certainly
exist."

I've found a story I heard about, though it may be
talking about stock rather than flow.  Here are two
web sites with news stories:
www.emc.com/news/in_depth_archive/10192000_berkeley.jsp
www.economist.com/science/displayStory.cfm?Story_ID=398206

"But what I find particularly noteworty is this
fantastic map of internet relationships:
http://www.orgnet.com/netindustry.html  discussed
elsewhere as:  A jiggly power chart shows who really
rules your world"

I saw this on Techtv's The Screen Savers:
www.touchgraph.com

-jsh

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Re: Self-assesment vs. Rationality

[john hull]

--- fabio guillermo rojas wrote:
"how much of investing behavior is based on
self-assesment vs. rational expectations?"

It seems like the difference between the return on
self-managed investments vs. the market, let's say,
should measure something meaningful like the value of
being an executive monkey vs. being a yoked monkey
(salmon.psy.plym.ac.uk/year1/stresbeh.htm and
www.betteryou.com/feature.htm, for example).

-jsh

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Re: Fw: The Economics of Suicide Bombing

[john hull]

Interesting article, thanks!

A couple of months ago I watched a documentary that
was on either "Frontline--World" or the "National
Geographic Channel," I can't recall which (sorry)
about the suicide bombings of the Tamil Tigers.  The
Tigers aren't Muslim, they're primarily Hindu with a
Christian minority, and nothing was mentioned about
their families getting paid.  Yet the Tigers have
commited over 200 suicide bombings as compared to the
50-55 for Hamas and The Islamic Jihad combined
(www.ict.org.il/articles/articledet.cfm?articleid=373).
 Interestingly, the same article notes that the
terrorist suicide attack is quite old: "The phenomenon
appeared among the Jewish Sicaris in the 1st
century"

According to O.N. Mehrotra at the Institute for
Defence Studies and Analyses (IDSA), New Delhi, the
violence seems to be the result of the minority Tamils
not being able to get their language accepted as an
official language through non-violent means when the
Sinhalese majority adopted "Sinhala only" as an
official national language in place of English.  "As
the situation became more grim, the frustrated youth
came to believe that they could not achieve any
tangible solution to the problem without adopting
violent means to achieve their cherished goal of
independence" (www.idsa-india.org/an-jan-9.html).

Frustration seems to be a powerful motivator. 
Sometimes it's justified, more often it's not, but
that's not the point.  Nor is the point that terrorism
cannot be fruitfully viewed from an economic vantage
point (the first article I referenced also notes that
"in the 1990’s, the Hizballah drastically reduced the
number of suicide attacks due to “rational”
cost-benefit considerations").  Rather I just want to
undermine, to some small extent, the idea that suicide
bombers can be understood in terms of religion or
monetary payoffs.  I suspect that in the case of the
article Mr. Skinner (Crazy Al?) sent along,
frustration at political intransigence
(www.gush-shalom.org/archives/oslo.html, for example)
is a more powerful economic variable than 72 dark-eyed
virgins or mom's new apartment.

Thanks for the soapbox,
-jsh


=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: (book review)The Case against Government Science

[john hull]

--- Francois-Rene Rideau <[EMAIL PROTECTED]> wrote:
"Obviously, the government didn't forecast the
unpredictable path of discovery any more than the
"private sector". Non sequitur."

No.  I was using the story as neither a premise nor a
conclusion to an argument about funding sources.  It
seemed as though the discussion was starting to be
framed in terms of useful vs. useless science, and I
wanted to nip it in the bud with an interesting
example.

--- Gil Guillory <[EMAIL PROTECTED]> wrote:
"Sorry so long."

I enjoy reading all the posts, even the long ones.

"I would also like to raise an objection to the
supposed distinction between basic and applied
research. This is, at best, a...continuum with a
fuziness akin to the economic distinction between
goods of the first order and goods of higher orders."

I feel like I'm in a Monty Python sketch.  Since I'm a
clumsy writer at best, I will accept defeat.  The
argument is much better presented in a chapter from
this list's namesake.  That's not an argument from
authority!  I'm just pointing to an interesting idea
to which I cannot do justice.

Best regards,
jsh

=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: (book review)The Case against Government Science

[john hull]

> From: Warnick, Walt <[EMAIL PROTECTED]>
"In the natural sciences, basic research at
universities tends to be funded by the Federal
government...  Basic research funded by corporations
is very small."

Which hits on my original remark: if we have two types
of scientists, Basic & Applied, and if business is the
only funder of research, then the firms will be hiring
both types since the Basics will portray themselves as
Applieds to get jobs.  With gov't. funding basic
research, then the Basics get to do basic research at
taxpayer expense, but the firms can apply the Applieds
to applied research at greater efficiency because
there are no Basics getting in the way.  The economic
benefits of this separation outweighs the cost of
paying for basic research.  The world is better off.

That's not to say that basic research is not valuable,
but it evidently follows strange and unpredictable
paths.  The Nobel winning chemist Dudly Herschback
traced the path of work starting with Otto Stern 75
years ago on molecular rays (or beams) to test a
prediction of quantum physics.  It lead to the
discovery of the laser, radio-astronomy, and nuclear 
magnetic resonance which lead to the MRI.  Chemists
who wanted to study crossed beams layed the groundwork
for the discovery of the Buckyball, with the study
that discovered it being motivated by studying
interstellar spectra.  And the Buckyball, in turn, may
prove a key to shutting down an enzyme that governs
the HIV virus' replication, not to mention the value
it has as a strong and lightweight material.  He ends
the story by noting that, "No funding agency would
find plausable a research proposal requesting support
on supersonic beams or interstellar spectra as an
approach to AIDS.  But many such historical paths can
be traced that celebrate hybridizing discoveries from
seemingly unrelated patches of scientific gardens."

-jsh

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Re: (book review)The Case against Government Science

[john hull]

I was given to the impression that one of the benefits
of gov't funded science was that it creates separating
equilibria such that the okay, but not ground
breaking, scientists don't muck-up the works at ground
breaking institutions by misrepresenting themselves
and getting hired.  That the expense of cushy jobs for
okay scientists was more than offset by the gains from
getting only the best scientists to go to Bell Labs,
or MIT, or wherever.  The review didn't seem to
indicate that that was addressed.

-jsh


--- Alypius Skinner <[EMAIL PROTECTED]> wrote:
> 
> 
> 
>
http://www.cycad.com/cgi-bin/pinc/apr2000/books/ff_govscience.html
> 
> The Case against Government Science
> The Economic Laws of Scientific Research
> Terence Kealey
> St. Martin's, New York, 1997
> 382 pp, paper ISBN 0-312-17306-7 
> Reviewed by Frank Forman
> 
> 
> Ayn Rand dramatized the case against government
> funding of science in Atlas Shrugged, but a
> dramatization is not evidence. The problem is that,
> according to standard economic theory, research is
> almost a perfect example of a "pure public good," a
> good that once produced can be consumed by all
> without any possibility of exclusion by way of
> property-rights delimitation. Such goods will be
> underproduced in the market, since the producers can
> capture only the benefits of the research that they
> themselves use. Rational citizens, all of them,
> might very well empower the state to provide for the
> provision of research and other public goods. Not
> every citizen would actually benefit from each good
> so provided, but under a well-designed constitution,
> each citizen would presumably be better off as a
> result of constitutionally limited state provision
> of public goods than without it. This would mean
> unanimity of agreement-a social contract-and hence
> no initiation of force. 
> 
> But what about government funding of science? Nearly
> every scientific paper, it is true, seems to
> conclude with an appeal for funds for "further
> research," but even so the case for public funding
> is accepted by nearly everyone except a few
> ideological extremists. Along comes a bombshell of a
> book by Terence Kealey, The Economic Laws of
> Scientific Research, that argues that government
> funding of science at best displaces private funding
> and in fact diverts research into less productive
> channels. I am surprised that this book has not
> gotten much more attention from the free-market
> community. 
> 
> The book is essentially a history of science and its
> funding, with the number of pages per century
> increasing up to the present. The author argues that
> technology drives science, even basic science, just
> as much as the reverse, which is awfully reminiscent
> of John Galt and his motor. Kealey describes the
> work of several engineers and other practical men
> turned scientists, such as Carnot, Torricelli,
> Joule, Pasteur, and Mendel. He argues that most new
> technology comes from old technology. The book is
> highly instructive on matters of history and greatly
> entertaining to read. To wit: 
> 
>   "Laissez-faire works. The historical (and
> contemporary) evidence is compelling: the freer the
> markets and the lower the taxes, the richer the
> country grows. But laissez-faire fails to satisfy
> certain human needs. It fails the politician, who
> craves for power; it fails the socialist, who craves
> to impose equality on others; it fails the
> businessman, who craves for security; and it fails
> the anally fixated, who craves for order. It also
> fails the idle, the greedy, and the sluttish, who
> crave for a political system that allows them to
> acquire others' wealth under the due process of law.
> This dreadful collection of inadequates, therefore,
> will coalesce on dirigisme, high taxes and a strong
> state" (p. 260). 
> 
> Here are the three Laws of Funding for Civil R&D,
> based upon comparing different countries and across
> time: 
> 
> 1.. "The percentage of national GDP spent
> increases with national GDP per capita. 
> 2.. "Public and private funding displace each
> other. 
> 3.. "Public and private displacements are not
> equal: public funds displace more than they do
> themselves provide" (p. 245).
> But it is not just the funds that are displaced; so
> is their effectiveness, as a rule, from projects
> that have a promise to become useful to those that
> only keep scientists busy. Furthermore, many wealthy
> men generously fund science and are free to choose
> genuine innovators and not those merely expert in
> filling out grant applications. Kealey describes
> many gentleman amateurs, the greatest being Darwin.
> And he compares the quality of private and public
> medical research in England during this century in
> detail, with the advantage going to the former. 
> 
> Kealey also notes that businesses have to fund their
> own science departments even if they would rather
> let other businesses perform the research and
> fre

Re: Ig Nobels

[john hull]

This year's Ig Nobel prizes have been announced as
well, www.improb.com/ig/ig-pastwinners.html#ig2002:

The 2002 Ig Nobel Prize Winners
BIOLOGY
Norma E. Bubier, Charles G.M. Paxton, Phil Bowers, and
D. Charles Deeming of the United Kingdom, for their
report "Courtship Behaviour of Ostriches Towards
Humans Under Farming Conditions in Britain."
[REFERENCE: "Courtship Behaviour of Ostriches
(Struthio camelus) Towards Humans Under Farming
Conditions in Britain," Norma E. Bubier, Charles G.M.
Paxton, P. Bowers, D.C. Deeming, British Poultry
Science, vol. 39, no. 4, September 1998, pp. 477-481.]

PHYSICS
Arnd Leike of the University of Munich, for
demonstrating that beer froth obeys the mathematical
Law of Exponential Decay. [REFERENCE: "Demonstration
of the Exponential Decay Law Using Beer Froth," Arnd
Leike, European Journal of Physics, vol. 23, January
2002, pp. 21-26.]

INTERDISCIPLINARY RESEARCH
Karl Kruszelnicki of The University of Sydney, for
performing a comprehensive survey of human belly
button lint -- who gets it, when, what color, and how
much.

CHEMISTRY
Theo Gray of Wolfram Research, in Champaign, Illinois,
for gathering many elements of the periodic table, and
assembling them into the form of a four-legged
periodic table table.

MATHEMATICS
K.P. Sreekumar and the late G. Nirmalan of Kerala
Agricultural University, India, for their analytical
report "Estimation of the Total Surface Area in Indian
Elephants." [REFERENCE: "Estimation of the Total
Surface Area in Indian Elephants (Elephas maximus
indicus)," K.P. Sreekumar and G. Nirmalan, Veterinary
Research Communications, vol. 14, no. 1, 1990, pp.
5-17.]

LITERATURE
Vicki L. Silvers of the University of Nevada-Reno and
David S. Kreiner of Central Missouri State University,
for their colorful report "The Effects of Pre-Existing
Inappropriate Highlighting on Reading Comprehension."
[ PUBLISHED IN: Reading Research and Instruction, vol.
36, no. 3, 1997, pp. 217-23.]

PEACE
Keita Sato, President of Takara Co., Dr. Matsumi
Suzuki, President of Japan Acoustic Lab, and Dr. Norio
Kogure, Executive Director, Kogure Veterinary
Hospital, for promoting peace and harmony between the
species by inventing Bow-Lingual, a computer-based
automatic dog-to-human language translation device.

HYGEINE
Eduardo Segura, of Lavakan de Aste, in Tarragona,
Spain, for inventing a washing machine for cats and
dogs.

ECONOMICS
The executives, corporate directors, and auditors of
Enron, Lernaut & Hauspie [Belgium], Adelphia, Bank of
Commerce and Credit International [Pakistan], Cendant,
CMS Energy, Duke Energy, Dynegy, Gazprom [Russia],
Global Crossing, HIH Insurance [Australia], Informix,
Kmart, Maxwell Communications [UK], McKessonHBOC,
Merrill Lynch, Merck, Peregrine Systems, Qwest
Communications, Reliant Resources, Rent-Way, Rite Aid,
Sunbeam, Tyco, Waste Management, WorldCom, Xerox, and
Arthur Andersen, for adapting the mathematical concept
of imaginary numbers for use in the business world.
[NOTE: all companies are US-based unless otherwise
noted.]

MEDICINE
Chris McManus of University College London, for his
excruciatingly balanced report, "Scrotal Asymmetry in
Man and in Ancient Sculpture." [PUBLISHED IN: Nature,
vol. 259, February 5, 1976, p. 426.]

I didn't predict any of these, especially the one in
mathematics.  

-jsh

p.s. Here's the one for econ. in 2001:
ECONOMICS 
Joel Slemrod, of the University of Michigan Business
School, and Wojciech Kopczuk, of University of British
Columbia, for their conclusion that people find a way
to postpone their deaths if that that would qualify
them for a lower rate on the inheritance tax.
[REFERENCE:"Dying to Save Taxes: Evidence from Estate
Tax Returns on the Death Elasticity," National Bureau
of Economic Research Working Paper No. W8158, March
2001.] 

Cool.

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soviet economists

[john hull]

Howdy,

Here's an interesting quote on one of the diffuculties
of a planned economy, from Robert Conquest's
"Reflections on a Ravaged Century," W.W. Norton, 2000,
pg 102-103:

"Soviet economists, as soon as they got the chance,
pointed out that the problem of setting prices was
insoluble.  Twenty-four to twenty-five million
industrial prices alone per annum, each backed by
thousands of pages of documentation, had to be handled
by the State Commission on Prices."

What a pickle!

-jsh

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Re: Charity and Races as Complements

[john hull]

--- Robin Hanson <[EMAIL PROTECTED]> wrote:
"This is a confused about economics explanation 
They could spend the same effort they spent training
for the race and running it doing their usual kind of
job"

That's a good point.  Of course, people who are
salaried can't get a few extra bucks by staying late
at the office since they're salaried.  Wage earners
really don't have that option, if every job I've ever
had is any indication, since taking overtime is
generally regarded as a cardinal sin except when
specifically mandated by the company.  They could get
part-time jobs during their normal jogging time, but I
don't see many help wanted ads asking for someone to
work for seven hours a week.  You'll have to convince
me that the extra-work option is viable.

They could sell Amway or Mary Kay for seven hours a
week, but then they'd give up that good healthy
exercise.  If they're going to exercise anyway, then
running isn't much sacrifice, as I suggested.

Best regards,
jsh

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Re: Charity and Races as Complements

[john hull]

--- Robin Hanson <[EMAIL PROTECTED]> wrote:
"Why do charity races make sense?"

It allows the participants to demonstrate their
commitment to the cause when soliciting money.  When a
participant comes knocking at your door, he's not just
asking you to give money to prevent breast cancer,
let's say, but he's saying that he's so committed to
the cause that he's willing to run 10K, so surely a
few bucks isn't too much for you, is it?

Let me offer an alternative situation.  At the Univ.
of Oregon they have some sort of fair down the main on
campus street every year.  One year, a student group
built a flimsy cage in which one of their members
would sit to protest medical research on animals,
cosmetic research on animals, or zoos--the sign
changed constantly.  But it was never the same person
in the cage on my repeated passings.  Finally I asked
a woman in the cage why they were switching, and she
said with a slight Valley Girl inflection, "Well,
we're humans, and humans have schedules"  At that
point I just walked off.  If the most they were each
willing to give for their cause was to sit in a "cage"
and gossip with their friends for a couple of hours,
then their cause surely couldn't be very important to
them.

Being willing to run 10K is the opposite, so to speak.
 If D.L. is willing to run until he pukes, then the
cause must be important to him and I'm more willing to
give a few minutes to hear his plea and possibly give
money.

So why not mow lawns for donations, you ask?  What's
the point of jogging?  You could at least provide a
service!  Two reasons: First is that, as psychologists
have discovered, when people are compensated for
something they tend to enjoy it less.  Therefore,
avoiding quid pro quos helps people feel better about
giving and are more likely to give in the future. 
Second is that a race doesn't crowd out any industry. 
If you mowed lawns for breast cancer, you'd be putting
lawn care professionals out of work and creating even
more charity cases.

Best regards,
jsh

=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: Feral Children

[john hull]

Good point, Anton.  Thanks!

-jsh


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Re: Feral Children

[john hull]

--- [EMAIL PROTECTED] wrote:
"Is there a critical period for language acquisition?"

Yup.  Very early on all infants make all the sounds of
all human languages (I think they might be called
phonemes).  Anyway, they get culled by imitating the
parents.  Hence, it's so difficult for Japanese to say
"L", for example.

Also, language acquisition is hardwired, sort of like
the way chicks imprint their mothers.  If you miss
that window then you're going to have real trouble. 
That's why kids learn new languages so easily.  This
window closes around puberty, if I recall correctly.

"What are the consequences of extreme social isolation
in children regarding their abilities to develope
complex forms of reasoning and abstract thinking?"

They've imposed extreme social isolation on apes and
is devastating for the ape.  But here's another study
that shows the importance of stimulation.  I can't
recall the cite, but here goes: in a mental hospital a
group of retarded infants was randomly split into two
groups.  One was treated as usual, whereas the
experimental group played one-on-one with retarded
teenage girls from the same hospital for a few hours a
day.  After two years, the difference in IQs were
something like 30 points higher for the experimental
group.  In adulthood the difference was just as
pronounced.  The control group was pretty much all
institutionalized, while a few lived on their own,
etc.  The experimental group pretty much all lived on
their own, most had at least some college (I think)
and one or two even had some graaduate school.

"So play with your kid" is a big moral there I
suppose.

Best regards,
jsh


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insurance quotes

[john hull]

Howdy,

It seems like I've seen advertisements for insurance
companies who'll offer quotes from their competitors,
even if their competitor's quotes are cheaper.  I can
think of two reasons why a firm would do this.  First
would be the warm-fuzzy model, where the company is
banking on goodwill resulting from helping the
consumer shop around.  They can't be all bad if they
help me out rather than just make a buck.

The second would be the better-actuary model, where
the firm is betting that its actuaries (& their
models) are better than the competitors', so the firm
believes that the competitors are actually making bad
bets and will ultimately go out of business or adjust
so that their prices go up.

Do these sound reasonable, or do you think there is a
better reason.  If so, what?

Curiously yours,
jsh

=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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The Other Lane

[john hull]

Howdy,

Why does it seem like the other lane in heavy traffic
is always going faster?  Depends on who you ask. 
Here's two contradictory answers with explanations.

www.stat.duke.edu/chance/133.redelmeier.pdf
plus.maths.org/issue17/features/traffic/index.html

The first, by Redelmeier and Tibshirani, says it's an
illusion.  Put simplistically, one perceives the other
lane as moving faster, even when it is in fact going
slower, because during the times when it makes gains
one spends more time being overtaken than when passing
since passing cars are more spread out.  They
conducted experiments to back this up.

On the other hand, Nick Bostrom says it really is
going faster.  He asserts that Redelmeier and
Tibshirani are falling prey to the observation
selection effect.  Put simlistically, since passing
cars are less densly packed than those being passed,
any randomly chosen vehicle is most likley a vehicle
being passed.  Therefore, the other lane is moving
faster.

I hope you find these articles interesting,
jsh

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RE: demand revelation and its discontents

[john hull]

--- Grey Thomas <[EMAIL PROTECTED]> wrote:
"But I wonder if there are any small homeowner
associations, or service clubs, or any group, who
actually have used this method for allocating the
group budget?...I have this strong feeling the answer
is no,...not even any group of economists [do
that]"

Why wouldn't economists adopt a theoretically superior
method?  In regards to voting procedure, I've read
about physics organizations who, after learning about
the deficiencies of majority voting, adopt other
voting schemes like approval voting.  Why wouldn't
economists act similarly?

Possible reason: Physics is an experiment oriented
persuit, whereas economics is theory oriented?

Curiously your,
jsh

=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: Median Voter and Sampling

[john hull]

--- fabio guillermo rojas
<[EMAIL PROTECTED]> wrote:
"4. Cognitive limitations: I'm no expert, but my hunch
is that many people are only willing to get worked up
over a small # of issues - taxes, abortion,
immigration, defense... and the dedicated might add
their favorites like gun control or affirmative
action. Therefore, it's no risk to screw the voter on
an issue as long as you don't do it on certain big
issues. Therefore it's easy to get a list of dozens of
issues and find a descrepancy - what's so puzzling
about that?"

You mean litmus-test issues that people value above
all else?  Abortion is a good example.  There seems to
be alot of people who will choose to not vote for a
candidate because of her stance on abortion,
regardless of her stance on all other issues.  So
litmus-test issues could throw off the MVT because
that issue decides who one will vote for before any
other issue will be considered.

I think this criticism fails because the winning
candidate would be the candidate who chooses the
median vector.  That is, she chooses the median for
the biggest litmus test issue, then the second
biggest, and on down the line.  

Of course my criticism of your criticism would fail
for issues that are under the radar of most people. 
At which point I would just be wasting bandwidth.

But I do have a naive question:  Is there a median
voter for each issue, so that if there n issues, there
can be up to n median voters?  Or, is there only one
median voter who satisfies the vector median as I
described above?  Can such a person be proven to
exist, sort of like a voter version of the Ham
Sandwich Theorem?

Humbly yours,
jsh

=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: Celeb Pay-or-Homer's Insight

[john hull]

--- Dan Lewis <[EMAIL PROTECTED]> wrote:
"At dinner last night  [T]hey get contracts
commensurate to this level."

I agree with you almost entirely.  While a guaranteed
record contract for the winning 'Idol' surely has some
value, for example, it's probably not as much of a
boost as getting to the finals, like you wrote.

But for music stars record companies can create their
own hype.  Suppose I own the Scipio Recording Concern,
marketing to lovers of pop music and military history,
I could have had a casting call and found some
marketable people who I could have then injected into
the market with the appropriate media blitz.  In
baseball there are only so many available short-stop
positions, but for music the field is very wide**.  

Now consider Vanilla Ice.  This guy had only one hit,
yet a VH-1 documentary revealed that he has a small
fleet of expensive sports cars and an impressive
mansion to boot.  That's alot of bread.  As owner of
SRC I would say, "Hey, let's get more people into the
pop-rap market," and flood the market until SRC's
profits from pop-rap artists are just equal to the
cost of my media blitz to enter a new artist into the
market.  

It seems to me that that optimum point should be well
in excess of what is currently on the market.  Hence
Normandie Shields exclusion from the market.  It seems
like I, as head of SRC, should be flooding the market
until there are so many artists that each doesn't make
a king's ransom.  Real record companies don't do that.
 Why not?

I think I've assumed an answer to my initial question
by asking why record companies don't put more
singers/musicians on the market.  Maybe it's not up to
them.  **It could be constrained, for example by the
amount of available air time on radio stations--thus
limiting the market size.  

I feel like I'm being stubborn by refusing to accept
possible answers.  That's not my intent.

Best regards,
jsh


=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: Europe's worst ever floods linked to poor land management

[john hull]

Good points.  Thanks.
-jsh

--- Fred Foldvary <[EMAIL PROTECTED]> wrote:
> --- john hull <[EMAIL PROTECTED]> wrote:
> > ... you seem to be suggesting that
> > policy makers are benefiting the present at the
> > expense of the future, yet couldn't one could
> accuse
> > you of wanting to benefit the future at the
> expense of
> > the present?
> 
> One could accuse me thusly, but the accusation would
> not be warranted.
> My belief is that a pure free market would bias
> neither the present nor the
> future.
> 
> >  It seems like the balanced position
> > would be to accept the consequences of the 100
> year
> > flood for the benefit of 99 years of prosperity
> and
> > growth.
> 
> There can be too much investment in disaster
> prevention, but I have not seen
> any cost/benefit analysis indicating that the
> governmental river policies in
> Europe have been optimal.  The same applies to US
> and Chinese policy.
> 
> At any rate, if prosperity and growth are the goals,
> none of the European
> countries have tax and regulatory policies that
> maximize it, so the evidence
> is that there are other goals and preferences that
> have higher priority for
> the policy makers.
> 
> Fred Foldvary
> 
> =
> [EMAIL PROTECTED]
> 


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Re: proximo articulo

[john hull]

Howdy,
I got this email.  I can't read it.  It wasn't from
the Armchair list, but it replies to the list.  Here
it is in case anybody speaks Spanish.
-jsh

--- Alexander Guerrero <[EMAIL PROTECTED]> wrote:
> ECONOMÍA Y REVOLUCIÓN:  GERENCIANDO EN CRISIS 
> 
> Alexander Guerrero E
>  
> 
> Muchos expresan que el proyecto del Presidente por
> su estilo y hechuras no es ninguna revolución; se
> usan muchos adjetivos para graficarla; sin embargo
> lo más curioso es que detrás de esa expresión
> coexiste un criterio y hasta una añoranza utópica o
> cierta nostalgia que las revoluciones son realmente
> distintas, y hasta “buenas”. Esta apreciación es tan
> falaz como el propio “proceso revolucionario” que
> vivimos. 
> 
> Las revoluciones son movimientos telúricos que
> derrumban instituciones, cambian radicalmente reglas
> de juego, reemplazan instituciones con otras,
> creando un amplio espectro de incertidumbre
> institucional, y muchas llegan hasta la violencia
> política, la cual se convierte en mecanismo para el
> control del poder de quienes en nombre del “pueblo”
> toman el mandato para arreglarle la vida a los
> ciudadanos. Sin embargo, la mayoría de las
> revoluciones  terminan haciendo lo contrario,
> envilecen el “contrato social” entre la gente y sus
> instituciones, llegándose inclusive a extremos que
> restringen la libertad, el mercado, el orden y la
> paz ciudadana. En general una revolución destruye la
> curva de aprendizaje que evolutivamente un país va
> dibujando dinámicamente con el curso de la historia.
> 
> 
> En el caso venezolano, el proceso revolucionario
> dirigido por el Presidente trastoco las reglas de
> juego de una economía de mercado, en los hechos y en
> el derecho, la nueva constitución ha reforzado al
> estado como eje solidario económico y social,
> debilitando en consecuencia el ejercicio de los
> derechos de propiedad; estos, en vastos sectores de
> la economía han visto perder el valor de sus
> garantías y se han debilitado intensamente, el
> estado ha renunciado a la protección de esos
> derechos y en muchos casos los derechos aparecen con
> severas restricciones institucionales como la
> propiedad de la tierra en la nueva Ley de Tierras. 
> 
> El incremento de los impuestos como consecuencia de
> indisciplina fiscal y desorden político en la
> gerencia del presupuesto y las finanzas públicas, la
> devaluación con sentido fiscalista, las leyes que
> restringen los mercados, la permisología para la
> inversión, la sobreregulación de los mercados,
> restricciones comerciales, limitaciones al
> intercambio, la negativa del estado en privatizar
> bienes que no son públicos, la corrupción, la
> debilidad del poder judicial y la opacidad en la
> aplicación y arbitraje  de esta respecto de los
> contratos entre el sector privado y el publico y
> entre terceros, el auge de la delincuencia, y hasta
> la promoción de la lucha de clases; la reproducción 
> de esos fenómenos ablandan y debilitan los derechos
> de propiedad, incrementando costos de transacción y
> encareciendo por lo tanto el proceso de producción
> de bienes y servicios de la gente. 
> 
> Los derechos de propiedad constituyen el motor de la
> historia para la creación de riqueza, ellos marcan
> el horizonte de ingresos de los propietarios, y
> conocemos que una sociedad capitalista es una
> sociedad de propietarios, la nuestra no escapa  de
> esa realidad institucional aunque el proceso
> revolucionario, socialista en su esencia, ha hecho
> lo imposible por limitar su desarrollo, escondido en
> su lucha imaginaria contra el neoliberalismo
> salvaje.  
> 
> Este proceso de debilitamiento de los derechos de
> propiedad  ha incrementado los costos de transacción
> para ejercer los derechos frente al estado o
> terceros, inclusive, en el discurso político y en el
> engranaje informal que emanan de la gestión publica
> la propiedad privada ha aparecido anatematizada, esa
> ha sido la razón de fondo de la perdida de confianza
> en las instituciones y el estado que ha sostenido el
> proceso de descapitalización de estos anos y que
> ahora conduce hacia una contracción angustiosa de la
> economía nacional. 
> 
> En conjunto esos fenómenos económicos y jurídicos
> configuran perdida de gobernabilidad que ahora
> tiende a transformarse en crisis política en la
> medida que se ha venido deteriorando rápidamente el
> balance que debe existir entre los diversos poderes
> públicos. En el ámbito económico, estos fenómenos se
> expresan como debilidad del marco jurídico  - y de 
> los contratos- que justifica las transacciones y el
> intercambio de bienes y servicios, los cuales se
> conocen son extensiones naturales del ejercicio de
> los derechos de propiedad. 
> 
> El impacto que todo ello ha tenido en la economía
> puede leerse claramente en los resultados económicos
> de estos anos, y particularmente en este ultimo
> semestre donde el proceso de descapitalización que
> observamos lleva a la economía a contraerse 
> profundame

Re: Celeb Pay-or-Homer's Insight

[john hull]

Howdy,

A big thanks for those who replied.  

--- Christopher Auld <[EMAIL PROTECTED]> wrote:
"Classic winner-take-all markets, no?"

Um, I don't know.  I live in a village of 1,500 people
with a library to match, and I couldn't find much on
the internet.  There were references to Beta v. VHS,
from which I'll make the ex pede Herculem leap and
ask, "what market is Britney Spears taking that she
can keep out Normandie Shields (thanks, Anton)?"  Is
she dominating the "shockingly callipygian, good
dancing but with a questionable voice and a
face-to-neck proportion that gives a creepy
E.T.-in-a-wig vibe, blonde" market?  My intent there
was not to be rude to you, Chris, but to illustrate
the specificness of the market she would fill.  In the
"cute blonde teen singer" market we have Christina
Aguilera at one end (voice oriented, incidently sexy)
through Mandy Moore and Jessica Simpson to Britney
Spears (bad voice, aggressively sexy).  I think
there's even a few more out there (I haven't been
watching MTV lately).  To put it more plainly, no
single artist is dominating the cute-blonde market and
I don't know what market Britney actually owns.  

I would like to read more on how Britney is the victor
of a winner take all market.  I'm not saying she
ain't, but my guess says otherwise.  But that's just a
guess.

Dan Lewis profitably compared Britney & Normandie's
positions with a baseball metaphore.  (He also
reminded me of the pleasure of language and the beauty
of a good throw-away line.)  Unfortunately I don't
know baseball and the AAA & AA references are greek to
me.  However, I think it is telling that the baseball
metaphore was used, since baseball is notable for
being a decidedly noncompetitive industry.  (Off the
field.)  

Surely it's true that a Michael Jordan, Tiger Woods,
Ingemar Stenmark, or Pele would be a relative
superstar regardless of the nature of the market. 
That's why I chose Britney and not The Beatles or Dave
Brubeck or Bob Marley or Elvis or The Beastie Boys. 
Britney is no Michael Jordan; regardless of what her
sympathetic bio may assert, she amounts to a pre-fab
entertainment act.  Yet she is hugely successful,
while Normandie Shields is left out in the cold.  It
could be marketing.  But why not add a Normandie
Shields and make a little more money?  The market for
baseball players if fixed by the number of teams,
right?  But that's not the case for the cute-blonde
singer. 

Consider another metaphore: American Idol.  The final
ten, if not the final fifty, were virtually
indistinguishable.  Yeah, individual differences
existed, but they were just variations on a theme. 
One wins, but that's the contest rules.  What rules
make Britney such a big winner?  Why not squeeze
Normandie into the cute-blonde market with Christina,
Jessica, Mandy, and Britney?  

It makes me question the baseball metaphore, but only
slightly.  My meditation leads me to think that maybe
the cute-blonde market is a Cournot game.  There's an
optimal number of cute-blondes on the market and the
record industry has found the equilibrium.

Huh.  Could we take the number of cute-blondes &
number of recording firms and work backwards to the
rest of the parameters of the game?  Would that tell
us anything worthwhile?

Curiously your,
jsh


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Re: Europe's worst ever floods linked to poor land management

[john hull]

--- Fred Foldvary <[EMAIL PROTECTED]> wrote:
"It takes a government to ruin a river. ...As for the
future, they have not learned the right lesson, as
huge dams and other current works will continue to
alter the natural flow of Europe's rivers."

With all due respect, you seem to be suggesting that
policy makers are benefiting the present at the
expense of the future, yet couldn't one could accuse
you of wanting to benefit the future at the expense of
the present?  It seems like the balanced position
would be to accept the consequences of the 100 year
flood for the benefit of 99 years of prosperity and
growth.  Or to put it more generally, accept the
consequences of the X year flood for the benefits of
the X-1 years of growth and prosperity.  I infer that
you are putting X as near zero as possible, why do you
view that as the optimal solution?

Respectfully yours,
jsh


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Re: The phenomenon of the line getting longer

[john hull]

--- Jonathan Kalbfeld <[EMAIL PROTECTED]>
wrote:
"So we've noticed that wherever we go it seems as if
the lines seem to grow exponentially:  book store,
post office, bank.  Is there some economic precept to
describe this growth?"

There may well be; however, the problem has also been
addressed from the perspective of the traffic
engineer.  You may benefit by searching the internet. 
The traffic forum, www.trafficforum.de, may be a
start.  It can tend to be highly technical, e.g.
physics papers on granular flows and stuff like that,
but it may point the way to better lay explanations. 
I note this because I'll probably botch the
explanation as I understand it.

I think it stems from the facts that arrivals are not
evenly distributed and that people can be serviced
only so quickly.  Traffic engineers estimate the
service time of a stop sign to be about five seconds
per car.  Therefore a stop sign can service about
60*60/5 = 720 cars per hour, or 12 cars per minute. 
If cars arrived in 5 second intervals there would
always be a car at the sign, but no line waiting to
offically stop.  But cars don't arrive evenly spaced. 
(Arrival rates are described by a Poisson
distribution, if I recall correctly.)  If there are a
couple minutes in a row where more than 12 cars show
up, let's say 16 & 20, then at the end of the second
minute there are 12 cars left waiting to be serviced. 
That's a full minute to clear the waiting cars.  Now
the cars could pile even faster if you have a couple
of greater-than-twelve minutes, or it could clear
(slowly) with a some of less-than-twelve minutes.

I think it's clear that this can quickly get out of
hand with a little bad luck (from the perspective of
the poor slob at the end of the line...).  Of course,
you can say that my explanation doesn't account for
the frequency with which things get out of hand. 
That's fair.  I would respond by suggesting that you
keep track for a while.  This is a memorable
experience and humans commit the "availability
hueristic," that is we estimate probabilities based on
how memorable an event is.  Just for kicks I went to a
shark-fishing java applet here:
http://www.math.csusb.edu/faculty/stanton/m262/poisson_distribution/Poisson.html
and ran the experiment for three sets of five trials
each.  The results were:

1:  14 13 15 16 10
2:  10 16 17 21 14
3:  10  6 11 10 11

Trial 1 gives a line of 8 cars after 5 minutes; trial
2 gives 18; trial 3 gives zero cars in line.  So maybe
my explanation is plausable.

Also interesting is that your perspective is from one
who's *not* in line!  By definition your odds of being
in a line are greater since there's more people in
lines--otherwise there'd be no line.  We should go
drinking together...I hate waiting in line for a beer
at the bar.

I hope that made sense, was accurate, and not too
confused,
-jsh


=
"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: Median Voter and Sampling

[john hull]

--- fabio guillermo rojas
<[EMAIL PROTECTED]> wrote:
"There are other sources of non-median-voterness in
policy"

Like the Supreme Court?  Brown v. Board of Education
might be a good example.  Of course it's not a
legislative body, so I'm out on a limb here.

Maybe there's also a cultural bias that values
leadership even if it doesn't start out as being
popular.  Did the median voter want a man on the moon
when Kennedy laid out his vision?

Humbly yours,
jsh


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Re: Environmental and economic effects of Speed Limits

[john hull]

Hey,
I know this may be a little late, but you might try
the traffic forum: www.trafficforum.de .  I can't make
any promises, but it might be useful.  At least the
java applets on the links page are fun to play
with

Best regards,
jsh

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Re: Nations as Corporations

[john hull]

--- Alypius Skinner <[EMAIL PROTECTED]> wrote:
"'John Hull wrote:
1. The program will prevent poor from coming to the
States.  I think that's wrong'
So you think its wrong to demand that poor people
respect private property rights"

That's a bit of a non sequitur. :)
Nope.  All I was saying is that poor shouldn't be
prevented from immigrating simply for being poor (and
that the proposed citizenship structure would do that,
a view that has been well challenged).  Furthermore,
that people should be allowed to move from country to
country fairly unhindered--taking the fleas with the
dog.  No insightful economic arguments here, it's just
a value that I have (and interjected).

Alypius Skinner <[EMAIL PROTECTED]> wrote:
"Ken Lay, Bill Clinton (Hillary in 2008), what's the
difference? Lay might even be an improvement."

Hillary in 2008?  Ooof.  Humor aside, I'm not sure I
agree that Lay-esque leadership would be an
improvement.  You remark how stupid and apathetic
voters are, it seems to me that in that environment
someone more clever than I could come up with a scheme
to build stock prices in the short-run, get paid, and
bail out of office.  The world has certainly seen its
share of bad leaders, but that doesn't mean that they
couldn't be worse.  I think that the proposed scheme
would shorten political time horizons by linking
reward to a very short-term phenomenon, and thereby
produce even greater incentives for bone-head moves. 
I feel that if leaders' primary compensation comes in
the form of going down in the history books in a good
light, then they'll be more inclined to think in the
longer term.  

Obviously, I don't have a general argument to back
this up.  It is also obvious that one could easily
pick out plenty of counter examples, which I could not
counter with counter examples because we're dealing
with a hypothetical.  I would like to hear an argument
as to why linking reward to an extremely short-term
phenomenon would produce better leaders on average. 
I'm not throwing down the gauntlet...it's just
something I'd like to hear.

--- Alypius Skinner <[EMAIL PROTECTED]> wrote:
"But all the incentives for that scenario (embracing
mercantile excesses) already exist."

That must be true to some degree since people keep
putting Pat Buchanan on TV.  But I submit that those
incentives arise from your aforementioned voter
ignorance & stupidity: some people support schemes
that are ultimately harmful for the nation & the world
and will vote for the slobs who enact such policies. 
The proposed scheme, IMO, creates an *institutional*
incentive for such mercantilist policies because they
can, at least in the short-run, hurt the rest of the
world alot more than they will hurt us.

Thanks for reading my stuff,
jsh

=
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other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: Nations as Corporations--how to price?

[john hull]

Suppose, for the sake of argument, that you wish to
speculate in U.S. Citizenship Stocks, UCS for
short--pronounced "yuks."  By low & sell high, and all
that sort of thing.

Assume that:
1. An individual is free to own many UCS
2. Non-human legal entities may own UCS
3. There is no legally recognized disenfranchised
class, in line w/ Mr. Hanson's affirmation that one
may be stopped and asked for proof of citizenship. 
Anyone without at least one UCS who cannot be deported
is shot on sight.  Fatally.

As a speculator in UCS, how would you go about
estimating a fair price?  Do you think taking the
break-up value of the States gives the fair price?

Recall that one must be able to go somewhere after
selling; no foreign visa, no sale.

Terminally curious,
jsh


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Re: North on ideology

[john hull]

--- Kevin Carson <[EMAIL PROTECTED]> wrote:
"One neocon recently argued that anyone who does not
support Isreael is, by definition, an antisemite,
because Israel is the Jewish national homeland."

Which is ironic in that Arabs are Semitic as well. 
Picking sides in the conflict is not anti- or
pro-Semitic, any more than hating the Scots and loving
the Welsh is anti-British.  Go figure.

-jsh


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Re: Nations as Corporations

[john hull]

--- [EMAIL PROTECTED] wrote:
"I feel fairly confident in believing, however, that
he did not mean that the financial incentives would
produce CEOs with a militaristic or glory-seeking
bent."

So do I.  (BTW, I wouldn't consider the list of people
I gave to be 'militaristic,' although all were leaders
during war.)  However, I do see such an outcome as
being possible.  To increase stock price, the CEO must
make people want to move to the States in three
possible ways: make the States more desirable, the
rest of the world (ROW) less desirable, or some
combination.  Domestic problems can frequently be
knotty and politically dangerous.  It might pay for
the CEO to develop jingoistic, neo-mercantile policies
which might make the world worse off, but may benefit
the States at the expense of ROW.  So, for example,
the CEO could pursue int'l policies that would prevent
India from having a strong high-tech industry as a
means to get educated Indians to move to the States. 
It seems to me that such a scenario degrading into
some of the lowest depths of mercantile excesses is
too likely to be a safe choice.

--- Eric Crampton <[EMAIL PROTECTED]> wrote:
"If the market price is too high for a liquidity
constrained poor person to come in, I'm sure that
there would be tons of companies selecting out the
hard working poor foreigners, buying them shares that
they're indentured to pay off."

Good point.  And it does depend on the market clearing
price as well, which you noticed and I did not. 
Though at your estimated price of $700K per share, I
don't see alot of ROW poor coming and being able to
pay that off.  Of course, since that share is good
forever, they can pass the debt on to the child who
receives it, and so on.  However, since the price of
default would be deportation, and a person has to be
deported *somewhere*, the child could just choose not
to pay.  Do you think a firm would take the risk of
plunking down that kind of money for a
multi-generation debt?

I am curious why you used GDP as the basis for share
calcualtion.  I'm not attacking it, I just don't it's
appropriate.

Best wishes,
-jsh


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Re: Nations as Corporations

[john hull]

--- Robin Hanson <[EMAIL PROTECTED]> wrote:
"The corporate management would be given financial
incentives to maximize the market value of these
shares."

Why?  Convince me that the greatest leaders in history
were in it for financial gain.  Sun Tsu, Scipio
Africanus, Cincinatus to name a few ancients, on
through to modern leaders like Roosevelt and Churchill
don't seem to give me the impression of being
motivated by financial concerns.  

Of course, democracy as we know it is fairly recent
and there's no reason to assume that no other workable
form exists.  Heck, in Athens they used to draw lots
for public office.  However, not being a libertarian I
will insist on the need to maintain a constitution
which defines rights.  But that's for a different line
of discussion.

I do have two problems with the suggestion:

1. The program will prevent poor from coming to the
States.  I think that's wrong, but I respect your view
if you feel otherwise.

2. The incentive structure may give unhealthy goals
too much weight.  I can't think of anything specific,
but it sounds like we could be setting ourselves up
for a Ken Lay presidency.  I'm not sure that would be
a good idea.

If you can think of any good ways to make protest #2
as scary as possible, feel free to do so.

Best,
jsh


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other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: charlatanism

[john hull]

--- Fred Foldvary <[EMAIL PROTECTED]> wrote:
"'I still maintain that Bunge's ridiculous assertion
that economics assumes greed/money as the only human
motivator is held by most people.'

How do you know?"

Bayes' rule.  In print, television, or conversation,
that is the only description of the economist's views
on human motivation that I've ever heard, with the
exception of economists themselves.

Of course, Bunge savaged Bayesians in the same article
as well  C'est la guerre!

-jsh


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Re: charlatanism, oh Fabio!

[john hull]

--- fabio guillermo rojas 
"As is probably obvious, I'm not an economist"

I didn't see that at all.  But then again, I'm a
flunkie, which probably is *really* obvious

Best to you,
jsh 


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Re: charlatanism

[john hull]

--- Fred Foldvary <[EMAIL PROTECTED]> wrote:
"I think it is better to use other symbols, such as
*caps*, since when they get copied, one may want to
revert to u/l."

Sorry.  Yahoo email doesn't give me many options.  I
was hesitant about yelling, which I guess is what all
caps is.  I'll try something else in the future. 
Thanks.

"Most of textbook microeconomics is a priori.  For
example, when deriving the law of demand, do they
justify this with data?"

By that reasoning, aren't all the results obtained in
Euclid's Elements assumed a priori?  I took the law of
demand, along with most textbook economics, to be
derived axiomatically rather than assumed.  Or is that
what a priori means?  Given reasonable assumptions
(axioms), does that mean that economic findings are
valid without being 'scientific,' i.e. rigoriously
tested?  It seems to me yes, but when data doesn't
match theory, one must search for new or modified
axioms.  Thoughts on that?

By the way, I was particularly interested in Bunge's
assertions that a scientific research program is to
find the functional forms between variables.  Should
economists spend more time on that program?  It seems
like it would be unnecessary in many contexts, e.g.
the Tragedy of the Commons where a result can obtain
by merely knowing that the production function is
concave, inter alia.  But then again, maybe not.  

It seems that alot of people critique econ. without
learning it, and Bunge seems to be in that school of
thought.  But it is good to take critiques seriously. 
I bet there are a lot of psychic mediums and polygraph
artists who actually believe what they're doing it
valid and real.  It's probably best to double check
once in a while and make sure we're not headed down
that road.

I still maintain that Bunge's ridiculous assertion
that economics assumes greed/money as the only human
motivator is held by most people.  I think it could be
addressed by including the definition of rationality
as the structure of preferences rather than the
content of preferences in basic economics education. 
I think educators are doing a great disservice by not
making this clear early on.

-jsh

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Re: falling murder rates attributable to better trauma care?

[john hull]

A while back I heard an ex-military man and author
claim that first-person video games do lead to gun
violence.  He made the claim that better medical care
has has hidden the rise in gun violence by reducing
the mortality rate.  It does make intuitive sense, if
one looks at murder per se.  While I don't think I've
really answered your question, I just wanted to say
that it may be an 'old' idea in some fields.  Perhaps
economists could profit from it.

-jsh



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charlatanism

[john hull]

"Holy entropy!  It's boiling!"   --G. Gamow

Here's a couple interesting passages from Mario
Bunge's "Chalratanism in Academia."  I am hoping to
generate interesting replies--any will be welcome. 
The ALL CAPS lines are my emphasis.

"To paraphrase Groucho Marx: the trademark of modern
culture is science; if you can fake this, you've got
it made.  Hence the drive to clothe groundless
speculations...with the gown of science.  ...[T]he
academic pseudosciences abide by reason, or at least
seem at first sight to do so.  Their main flaws are
that their constructions are fuzzy and do not match
reality.  (Some of them, SUCH AS NEO-AUSTRIAN
ECONOMICS, EVEN CLAIM THAT THEIR THEORIES ARE TRUE A
PRIORI.)  Let us take a small sample

"Example 1: Pseudomathematical Symbolism

"Vilfredo Pareto, an original, insightful, and erudite
student of society...listed a number of 'residues' or
'forces,' among them sentiments, abilities,
dispositions, and myths.  He assumed tacitly that
'residues' are numerical variables.  But, since he
failed to define them, the symbols he used are mere
abbreviations for intuitive notions.

"...Professor Gary Becker, a Nobel laureate at the
University of Chicago, is famous for his economic
approach to the study of human behavior. 
Unfortunatley he leans heavily on undefined utility
functions and tends to pepper his writings with
symbols that do not always represent concepts.  For
example, a key formula of his theory of social
interactions reads thus: 'R = Di + h.'  Here i labels
an arbitrary individual, and R is supposed to stand
for 'the opinion of i held by other persons in the
same occupation'; and 'h measures the effect of i's
efforts, and Di the level of R when i makes no effort;
that is, Di measures i's "social environment."' 
BECKER CHRISTENS THESE 'FUNCTIONS' BUT DOES NOT
SPECIFY THEM.  CONSEQUENTLY HE ADDS WORDS, NOT
FUNCTIONS.  WE ARE NOT EVEN TOLD WHAT THE DIMENSIONS
AND UNITS OF THESE PSEUDOMAGNITUDES ARE.  Therefore,
we would not know how to measure the corresponding
properties and so to test for the adequacy of the
formula.

"Of course, PSEUDOQUANTITATION IS SUFFICIENT BUT NOT
NECESSARY TO ENGAGE IN PSEUDOSCIENCE.  An alternative
is to relate precise magnitudes in imprecise ways,
such as 'Y is some function of X,' where X and Y are
well defined but the function is left unspecified. 
Milton Friedman's 'theoretical framework for monetary
analysis' is a case in point.  Indeed, it revolves
around three undefined function symbols (f, g, and l).
 HENCE IT MAY AT MOST PASS FOR A RESEARCH PROPOSAL, AN
AIM OF WHICH WOULD BE TO FIND THE PRECISE FORM OF THE
HOPEFUL FUNCTIONS IN QUESTION.  But the project does
not seem to have been carried out.  And in any case,
given the bankruptcy of monetarism, the project does
not seem worthy of being carried out.

"Example 3: Subjective Utility

"Most of the utility 'functions' occurring in
neoclassical microeconomics...are not well defined--as
Henri Poincare pointed out to Leon Walras.  In fact,
the only conditions required of them is that they be
twice differentiable, the first derivative being
positive and the second negative.  Obviously,
infinitely many functions satisfy these mild
requirements.  THIS OFTEN SUFFICES IN SOME BRANCHES OF
PURE MATHEMATICS  BUT THE FACTUAL (OR EMPIRICAL)
SCIENCES ARE MORE DEMANDING: HERE ONE USES ONLY
FUNCTIONS THAT ARE DEFINED EXPLICITLY...OR IMPLICITLY.
 Finally, experimental studies have shown that
preferences and subjective estimates of utility and
risk do not satisfy the assumptions of expected
utility theory.

"In short, THE USE OF UTILITY FUNCTIONS IS OFTEN
MATHEMATICALLY SLOPPY AND EMPIRICALLY UNWARRANTED. 
Now, rational choice models make heavy use of both
subjective utilities and subjective probabilities, as
well as of the simplistic hypothesis that selfishness
is the only motivation of human behavior.  Not
suprisingly, NONE OF THESE MODELS FITS THE FACT. 
Hence, although at first sight they look scientific,
as a matter of fact they are pseudoscientific."

Thoughts?

-jsh

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Re: Why Compact Cars Identical?

[john hull]

--- [EMAIL PROTECTED] wrote:
"My own guess is that the economy cars look alike
because of technology."

I asked a former GM engineer with 40 years at the
company if there was any engineering reason why all
compact cars look the same, even between
manufacturers.  He couldn't think of any.  Granted he
built cars rather than designed them, but that is some
evidence to suspect non-technology reasons.

Maybe they look the same because we don't pay much
attention to them.  Kind of like if you grew up in
Northern Michigan you'll probably have trouble telling
a person of Chinese vs. Thaiwanese vs. Japanese
descent, while you can separate English from French
from Italian, let's say.  It's not that some people
"all look the same," rather it's one's lack of
exposure to that group.  (Almost) similarly, we don't
pay much attention to compact cars--on the road all we
really look at are brake lights and blinkers; however,
'nicer' cars do get our attention and so we are more
attuned to thier differnces.

Evidence for this might be the gentleman who posted
that he does see very distinct differences between
compact cars.  Perhaps he just pays closer attention
to them.

Hopefully helpful,
jsh

=
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other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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Re: Reading recommendation

[john hull]

--- Bryan Caplan <[EMAIL PROTECTED]> wrote:
"I enthusiastically recommend: Kraus, Malmfors, and
Slovic.  1992"  

Sounds like a great article.  K, M, & S aren't alone. 
Here's some stuff from Rothman & Lichter's "Is
Environmental Cancer a Political Disease?" published
in the book "The Flight From Science and Reason," ed.
Gross, Levitt, & Lewis.

Scientists surveyed on causes of cancer, risk rated on
1-10 scale:
smoking  9.19
chewing tobacco  7.34
asbestos 6.49
second hand smoke**  5.88
fat in diet  5.39
aflatoxin4.85
low fiber diet   4.83
dioxin   4.74
alcohol  4.59
edb  4.22
radon4.00
hormone treatment3.99
ddt  3.83
food addatives/preservatives 3.27
nuclear power plants 2.46
alar 2.18
saccharin1.64
other sweeteners 1.19

Environmental activists surveyed on the same question:
smoking  9.1
dioxin   8.1
asbestos 7.8
edb  7.3
ddt  6.7
pollution6.6
sunlight 6.3
fat in diet  6.1
food additives   5.3
nuclear plants   4.6
alar 4.1
saccharin3.7

Note the differences in both the order and the scale.
(**How does the scientists ranking of second-hand
smoke jibe with Kip Viscusi's work, e.g.
catoinstitute.com/pubs/regulation/reg18n3e.html ?)

>From another graphic:

--U.S. faces a cancer epidemic?
31% of scientists agree; 85% of media sources agree

--Cancer-causing agents unsafe at any dose?
28% of scientists agree; 66% of media sources agree

--Can base human cancer risks on animal studies?
27% of scientists agree; 50% of media sources agree

--Support Delaney clause?**
12% of scientists agree; 25% of media sources agree

**The Delaney clause is the 'zero risk' standard that
"holds that chemicals and additives must be banned
from food and drugs if they are ever shown to cause
cancer in any species."

Finally, for your amusement, percentage of scientists
rating media outlet seven or higher on a zero-to-ten
scale of reliability for cancer information:
New England Journal of Medicine--72%
Journal of the AMA--55%
Scientific American--54%
New York Times--22%
Weekly News Magazines--9%
TV News Networks--6%

I wonder if that last one has gone down since Fox News
got big

Best to you,
jsh


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RE: efficient markets ...

[john hull]

--- Grey Thomas <[EMAIL PROTECTED]> wrote:
"'...we think you should have 100 stocks, minimum,
representing more than 20 different industries.'"

Is is true that a major strength of diversification
comes from the fact that stock prices have a
log-normal distribution, i.e. percentage change is
normally distributed, so that when a stock price goes
up by x%, and then up by x% again, the gain in dollars
is greater than the loss in dollars when it goes down
by x%, and then down by x% again, thus, spread over a
whole bunch of stocks going up and down, this effect
translates into "free" money?  Or something like that?

So intstead of "merely" protecting you if but one of
many firms tank, it also creates a sort-of money pump?

If this is so, or if it isn't, couldn't you just
spread around $10,000 for the same effect--or would
brokerage fees eat up all the gains in that case?


Curiously yours,
jsh

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Re: farm subsidies/amtrak

[john hull]

--- [EMAIL PROTECTED] wrote:
"I've noticed in contest after contest media polls
fairly consistently overstate support for the
candidate percieved to be more liberal by 5-15%"

That's interesting.  Two serious questions.  First, do
I recall correctly that the last presidential polls
were predicting something pretty close to a dead heat?
 (I wonder if there is a past poll database out there
somewhere)  That's not to contradict your
observations, I really don't follow polls much so it's
a vague memory.

Second, do you think political pollsters are more
accurate than media pollsters since their reputations
(and paychecks?) hinge on closely tracking actual
results?  (Or are they more accurate at all?)

Curiously yours,
jsh


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Re: Public support for farm subsidies

[john hull]

Howdy,

Does anybody think that the amount or pattern of
support for farm subsidies would change if the average
American were "better informed?"  (I know, I know,
"better informed" is awfully value laden and implies a
Philistine-ish public, I'm just not sure how to phrase
it.)  By better info I mean deeper understanding of
int'l trade economics along with more complete
knowledge of amounts spent and the patterns of
spending and per capita costs, etc.  (And anything
else you feel is important.)

[EMAIL PROTECTED] wrote:
"Even many self-proclaimed conservatives supported ag
subsidies during the Iowa Caucus seasons..."

Michael Moore, in an episode of his show "TV Nation"
went to Newt Gingrich's home district during a 4th of
July parade.  He first joined the parade carrying a
sign denouncing "big government" and got cheers.  He
changed his sign so that it denounced federally funded
local projects and was kicked out of the parade.  
While I'm not a big M. Moore fan, that stunt was a bit
revealing

Best regards,
jsh

=
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other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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stock mkt. & solar wind--science news

[john hull]

The paths basic research programs take are truly
amazing.  This is from www.sciencedaily.com:

Stock Market Swings Help Researchers Understand
Extreme Events In Solar Wind 

Astrophysicists at the University of Warwick have
applied data analysis methods used to model stock
market fluctuations, to explore changes in the solar
wind (the sun's expanding atmosphere). They have
discovered that the fluctuations in the solar wind
follow the same kinds of patterns seen in the stock
markets – particularly when it comes to the number of
extreme events or large fluctuations. 
The researchers led by Professor Sandra Chapman at the
University of Warwick, used "finite size scaling" to
look at the probability of fluctuations or jumps in
magnetic energy density in the solar wind, using data
from the NASA-WIND spacecraft. They found that the
solar wind fluctuations had a much higher probability
of extreme events than for more familiar random
processes (which follow a Gaussian or bell shaped
curve). In fact statistically, the solar wind
fluctuations are similar to those found previously for
fluctuations in stock market indices. Large
fluctuations in the solar wind affect our local 'space
weather'. Predicting these is as challenging as
predicting large changes in stock prices. As this work
suggests that the underlying mathematics is similar we
can apply knowledge from one area to understand the
other. 

The researchers also found that the magnetic energy
density fluctuations were self-similar (in that the
pattern of variations looked very similar at all time
scales up to a period of 20 hours or so – in the same
way that a fractal image tends to show very similar
properties or patterns when you look at it on
different scales). The team members are using their
new analysis to modify current turbulence theories to
produce more useful mathematical models of the
occurrence of extreme events in the solar wind. The
research team's first paper is entitled "B. Hnat, S.C.
Chapman, G. Rowlands, N.W. Watkins and W. M. Farrell,
Finite size in the solar wind magnetic field energy
density as seen by WIND, Geophys. Res. Lett., 29,
86-1, (2002). The authors are from the University of
Warwick, the British Antarctic Survey (BAS) and NASA
Goddard Space Flight Center. 

The University of Warwick analysis was supported at
the Warwick end by the Particle Physics and Astronomy
Research Council, and at BAS by the Natural
Environment Research Council. 

 




 
Note: This story has been adapted from a news release
issued by University Of Warwick for journalists and
other members of the public. If you wish to quote from
any part of this story, please credit University Of
Warwick as the original source. You may also wish to
include the following link in any citation: 

http://www.sciencedaily.com/releases/2002/07/020726081058.htm


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Re: free-vs-competitive

[john hull]

--- Fred Foldvary <[EMAIL PROTECTED]> wrote:
"The free market has #1 competition..."

So when "free market" is used, it is assumed that said
market has as a necessary part the "competitive
market" as defined in the textbooks.  Cool, thanks.

You're the best,
-jsh 


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Re: free-vs-competitive please reply!!

[john hull]

--- Bryan D Caplan <[EMAIL PROTECTED]> wrote:
"What exactly is 'rectifying a conception'?"

It sounds like the punchline to a very, very bad joke.
 Begging your forgiveness, what I am trying to ask,
poorly, is what is the "free market," how does it
differ from the competitive market as defined in
economic parlance, why do economists and economically
educated people speak of the free market rather than
the competitive market, and how is the free market
superior to the competitive market?

My inelegant phrase was intended to ask that one "put
right" the apparent discrepency between two
"concepts:" free vs. competitive markets.  It seems
that the spirit of the free market requires us to
cheer, "Bully for Enron!  Too bad it didn't work out!"
 Whereas, the spirit of the competitive market would
counsel us to enforce more rigorous accounting and
disclosure standards.  I suggest that we do a
disservice when in public we praise the former and
ignore the latter.  

With that mess hopefully cleared up, I respectfully
re-submit my question.

Best to you and yours,
-jsh

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free-vs-competitive please reply!!

[john hull]

Howdy:

Here's my justification for this question:  Milton
Friedman declared on C-span that "The Road to Serfdom"
was the book that inspired him to become a
libertarian.  So please consider the following:

In the Road to Serfdom, Hayek takes great pains to
distinguish between free vs. competitive markets.  The
first are considered to be very contrary to, let's
say, American values, while the latter are considered
to be in line with said values.  

Free markets are bad, according to Hayek, e.g. the
monopolist should be the "economic whipping boy" to
such an extent that any monopolist will welcome
competition rather than continue to be a monopolist
and suffer the regulation/abuse of government.

Additionally, Hayek makes clear extensive oppornuties
for government intervention to ensure a competitive
market rather than a free market.  

Please, please, please!!! Will the advocates of the
"free" market, and those uninterested who have an
opinion, please rectify their conception of the free
market with the competitive market so that it doesn't
offend "The Road To Serfdom."

Begging enlightment,

jsh

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Re: take-in/eat out--jsh's dumb question

[john hull]

--- Bryan Caplan <[EMAIL PROTECTED]> wrote:
"The same goes for mail order vs. brick-and-mortar
stores.  The Internet crash makes it seem like mail
order can't afford to discount 40% below
brick-and-mortar.  But why not?  It sure seems like a
website must be vastly cheaper to run than a physical
store, especially when one website can do the work of
thousands of local stores."

This prompts another question from me--simliar perhaps
to a previous dumb question.  Firms price where
marginal revenue equals marginal cost, right?  So does
the physical existence of a brick-and-mortar store,
and it's logical consequences (e.g. rent paid, or lost
rent received), add to the marginal cost of a book,
let's say?  For example, to sell an additional book, a
physical store would need about 1 minute of additional
cashier time, which at $10/hour would be about $0.17.
So there's seventeen cents that the mail order firm
can save, minus what it costs for them to make a sale.


Or consider rent.  Rent is constant up to a certain
number of books when the bookstore becomes packed and
can no longer hold any more.  So should rent increase
the price of the marginal book by the amount it would
cost to rent an additional 8 & 1/2 square-inches of
retail space?  How would rent affect the price given
the mr=mc assumption?

Alternatively, is the predicted price differential
"really coming from" how the brick-and-mortar vs. mail
order question affects the demand side of the
equation?  

Have I made my confusion clear?  I'd really enjoy it
if someone could set me straight on this: mail order
should be cheaper, but I don't understand why.

Curiously yours,
jsh


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"...for no one admits that he incurs an obligation to another merely because that 
other has done him no wrong."
-Machiavelli, Discourses on Livy, Discourse 16.

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