An Excellent Argument

Henry at CT.

If he’s being quoted accurately, Mankiw seems unduly defensive. If I were him, I’d take a much more pro-active stance. I’d claim that I was teaching my students a valuable practical lesson in economics, by illustrating how regulatory power (the power to assign mandatory textbooks for a required credit class, and to smother secondary markets by frequently printing and requiring new editions) can lead to rent-seeking and the creation of effective monopolies. Indeed, I would use graphs and basic math in both book and classroom to illustrate this, so that students would be left in no doubt whatsoever about what was happening. This would really bring the arguments of public choice home to them in a forceful and direct way, teaching them a lesson that they would remember for a very long time.

Yup, that would do it.


This Will Be Interesting

About 100,000 workers at the Olympics site in London are to be screened using advanced face and palm recognition techniques in one of the largest and most expensive security operations undertaken on a British construction project.

Every worker on the site – up to 10,000 at one time at the peak of construction in 2010 and 100,000 in total – will pass through a two-tier biometrics access system that includes palm-print reading and face recognition.

“The gates will be like the Jubilee Line – put your hand down and it will open,” John Armitt, chairman of the Olympic Delivery Authority (ODA), said.

Keep an eye on this. I suspect that it will be an expensive disaster: and that such will be covered up. Because if biometrics cannot be made to work on such a scale then of course, they won\’t work for the National Database either, will they?


Cannabis use among young people has fallen since the Government downgraded it to a Class C drug, according to figures published yesterday.

Of course, the Government thinks that cannabis should be upgraded back to Class B in order to reduce the number of young who take it….


Could be Better

Seumas Milne on Hamas, Gaza and Israel:

More than 120 Palestinians have been killed in Gaza by Israeli forces in the past week, of whom one in five were children and more than half were civilians, according to the Israeli human rights group B\’Tselem. During the same period, three Israelis were killed, two of whom were soldiers taking part in the attacks.

I agree this is more than a little bloodthirsty but redo those numbers. In urban fighting, scragging 50% enemy soldiers, with 50% civilian casualties (the so called "collateral damage"), taking out 60 armed enemy while losing 2 of your own. In most armies that would be considered a very respectable result.

The ins and outs of why the fighting is going on, sorry, but this has been going on since I learned to read and I\’m sure it will still be doing so when I am decomposing in the grave and beyond reading about it. I\’m afraid that it all simply washes over me: but I suspect that those actual figures quoted by Milne simply aren\’t evidence of the atrocities that he wants us to believe they are.


Spotting the Laffer Curve in the Wild

Now, we all know that the Laffer Curve exists, that\’s a simple piece of maths. Where all the argument comes in is at what tax rates do we start to see Laffer Curve effects?

Such effects can go either way: a fall in tax rates leading to higher tax collections, or a rise in tax rates leading to lower such revenues. The Guardian tells us that we\’ve actually spotted one such Laffer effect in the wild:

The last time a windfall tax was imposed on North Sea operators in 2005, it brought short-term gains to the Treasury but led to a slump in drilling activity that ultimately cut tax revenues.

Interesting, no?


The problem has not been extended licensing itself, but its often baffling application. I don\’t recall, for example, widespread public demand for supermarkets and off-licences to sell booze around the clock.

Well, the widespread public demand is surely in the fact that people are buying and drinking the stuff, which is what you\’re complaining about, isn\’t it?

And The Problem Is?

In other words, the big retailers have used the latest headline stories on food price inflation to jack up their profits on pork, without passing any of the gravy down the chain to the wretched farmers.

Instead, they chose the moment to bury stakes into the barely palpitating breasts of the only people that stood between themselves and cheap imports.

Cheap imports are good, cheap imports are what we want.

Sure, domestic producers don\’t like them very much but there\’s what, a few thousand of them? As against 60 million consumers?


John Smeaton said she congratulated him for his actions last summer.

"We just had a wee chat. The Queen said, \’Well done and congratulations\’," he said.

After receiving the Queen\’s Gallantry Medal, Mr Smeaton, flanked by his parents and sister, said it had been "a magnificent experience" coming to "Buck Palace" and played down talk of his heroism.

I\’d missed the announcement of this award.

Well done that man.

Swedish Gender Pay Gap

Sweden Stable, with small increase from 84% (1995) to 82% (2000) (figures refer to monthly pay). Increasing.
UK Gradually narrowing, from 76.6% (1990) to 80.6% (2000) (UK0104126F) (figures refer to hourly pay). Narrowing.

Umm, if even Sweden can\’t eradicate it, why the angst here?

Fair Pay Network

Yes, we\’ve got another bunch of do-gooders around, the Fair Pay Network.

Evidence suggests that fair pay policies increase worker efficiency within organisations that adopt them. This is primarily felt through the contribution which fair pay levels have in combating the recruitment and retention problems which plague employers of low-paid workers.

This is, of course, true. But they\’ve missed the important part of it. It is only true for the companies that adopt it if most other companies do not adopt it.

Companies are in competition with each other for the best workers: workers are in competition with all other workers for the best available jobs. If you raise the pay then as the employer you\’ll be beating your competition for those best workers: if as a worker you\’re getting better pay than others then you\’ll work harder and better to keep that better pay. Plus, of course, you\’re less likely to switch jobs (staff recruitment is a very high part of the total costs in some sectors).

All excellent stuff of course. But if everyone now starts paying "Fair Wages" (what they mean is the Living Wage) then these benefits for the company disappear, for neither of the two driving forces remain extant.

So, err, by campaigning for all businesses to pay "Fair Wages", the organisation is campaigning to eradicate the very reason that fair wages are beneficial to those businesses which pay them.


Blogging Bleg

A quick question for anyone who understands blog advertising.

Over on the old blog, the one now dedicated to trivial maunderings about Britney, I\’ve put a banner advertising programme on there. In February this raised $1.81. On 265,000 page views. Clearly, an irrelevance.

Are there actually any such programmes that would be worth having? I can\’t use MessageSpace as it\’s almost all US traffic. I can\’t use Valueclick, because it doesn\’t have its own domain name. Pay-Ads were spamming bastards. Already got both BlogAds and Adsense on there.

Any ideas?

Outrageous Ego Puffery of the Day

There\’s simply so much wrong wih this statement:

Wherever there are scarcity and free choices, market reality automatically follows. I finished reading "Discover Your Inner Economist" by the Marginal Revolution blogger Tyler Cowen. The book was bit of a disappointment in that even though MR is the top-notch economics blog, in the long form Cowen just isn\’t as good a writer as, say, Tim Worstall or Steven Landsburg.

I\’ve, amongst other things, never written in the long form.

But should I persevere with that manuscript? Looks like I might get one sale at least.

Aha! We have an answer to this. He meant Tim Harford, not Tim Worstall.

Guardian Subs

Umm, guys?

Facial reconstruction is making great advances, and may soon enter the realm of science fiction.

The article is actually arguing the opposite. That what was formerly thought of as mere science fiction, speculation about the future, is now becoming reality as a result of the great advances.