Saturday, April 25, 2015

Worship at the Y?

How are we to judge whether something is a church?

For this a church?  I expect most people would say "no," but the discretion to classify as a church, or not, is a pretty significant power for the state to have.

Thursday, April 23, 2015

It takes a tough man to make a tender chicken

Mrs. Angus recently went to Pepperdine to talk about her book, "The Long Process of Development".

They just dropped a video of the talk on youtube.

Here are some of the titles I suggested for the book:

"The long and winding road"
"Time time time is on our side"
"Its just a matter of time"

Here is my one sentence synopsis of the book's main message:

"It takes a tough man to make a tender chicken".

What she shows in the book is that, while it's true that England adopted vastly superior economic policies in its North Atlantic colonies than did Spain, it was the relative strength and sophistication of the English state compared to the Spanish that allowed England to do what it did. The argument refutes the common view that Spain was strong and centralized, and the strength of the state led directly to its crappy colonial policies.

Just like I said, right?

Here's the Amazon page for the book. If the price tag is a deal breaker for you, remember that the paperback will be out May 1 at a considerable savings.

People, how can the Kindle edition be $60???? Have you ever heard of such a thing? My own dear wife is a price-gouger!

Wednesday, April 22, 2015

Hey, Kids! Join the Climate Club!

Climate Clubs: Overcoming Free-Riding in International Climate Policy 

William Nordhaus 
American Economic Review
April 2015, Pages 1339-1370 

Abstract: Notwithstanding great progress in scientific and economic understanding of climate change, it has proven difficult to forge international agreements because of free-riding, as seen in the defunct Kyoto Protocol. This study examines the club as a model for international climate policy. Based on economic theory and empirical modeling, it finds that without sanctions against non-participants there are no stable coalitions other than those with minimal abatement. By contrast, a regime with small trade penalties on non-participants, a Climate Club, can induce a large stable coalition with high levels of abatement.

Nod to Kevin Lewis

Sunday, April 19, 2015

Packin' Em In!

My lecture at Masaryk U in Brno, CR.  It was on the Sharing Economy.  Very fun time.  Thanks to Richard Durana and to Petr Barton.

Tuesday, April 14, 2015

Monday, April 13, 2015

Pete Boettke: I want to eat unicorn for breakfast

This morning had a great time watching Pete Boettke wander around at APEE, complaining that all the breakfast (advertised on the program as "continental breakfast", btw) foods were breads and sugar.  He wanted "protein."

If ONLY there were a system where one could go to some establishment, order exactly what one wanted, and then exchange some valuable tokens for that meal.  We could call it... markets.  And restaurants (there are at least six full service restaurants in this hotel complex...)

But I have to admit that I was with Pete.  Wouldn't it be great if there were just free food, as much as I want, and it had bacon and eggs (the Angus special) and cheese and ham and steak and.... Wouldn't that be great? 

It's so tempting to want that, and to want someone else to provide it.  The difference is that Pete was actually just  joking and having a good time.  Many people really think there "should" be free stuff for everyone. But when they/we try to provide free stuff for everyone, you get people standing in long lines for stuff like toilet paper.  Forget protein...we're talking about toilet paper.  That's not right.  Markets are the best we can do, and they are actually pretty good.

Memo to the NYT: Consumer Surplus is not a "social return"

In Sunday's NYT "Economic Views" column, I was stunned to read, fairly early in the piece, this error of basic economics:

"Every profession produces both private returns — the fruits of labor that a person enjoys — and social returns — those that society enjoys. If I set up a shop on Etsy selling photographs, my private returns may be defined as the revenue I generate. The social returns are the pleasure that my photographs provide to my customers."

People, private returns are the returns enjoyed by market participants both producers AND consumers. Consumer surplus is not a "social return". It flows to the buyer alone.

Social returns are returns that accrue to people outside the market. People other than the buyers and sellers.

Let's try an example of our own.

If I paint people's houses, the private returns are the producer surplus (which is not my revenue) I enjoy AND the consumer surplus my customers enjoy. The social returns could be (A) zero, (B) positive because the newly painted house raises my neighbors' property values, or (C) negative because my customer had the house painted purple and it is causing disutility for the neighbors.

If that quote above was given as an answer to a question about the difference between private and social benefits in my principles class, it would fail.

The worst part of the whole thing is that, to introduce the offending quote, the columnist says, "As an economist, I look at it this way".