Rich Enough To Play At Being Poor

SWPL burrito-slinger Chipotle has raised a few Red Team hackles by announcing that they will no longer serve food containing genetically modified organisms. Here's one particularly risible quote from the link:

One recent study by researchers at Washington State University estimated that between 1996 and 2011, pesticide and herbicide use increased by more than 400 million pounds as a result of GMO cultivation.

Source

If you ever find yourself short on fodder for an intro stats or principles of logic course, I urge you to put that on a midterm.

Anyway, if it makes wealthy westerners feel all warm and fuzzy inside to eat conventionally cultivated food, what's the harm? They're not obliging the desperately poor and malnourished people of the world to play Marie Antoinette after all.

Well, unless you count the mandatory labeling crowd. Recall your principles of economics: imposing mandatory costs on producers will shift the long-run cost curve upward, driving marginal producers out of business and raising entry barriers for new firms. Incumbent producers benefit from the monopoly-promoting policies, and if the policy covers the entire market (such as for food), consumers with low price elasticity of demand end up footing the bill. The unfortunate equilibrium results in two types of high-cap agribusiness: organic and GMO on the one hand, and unregulated subsistence farming on the other hand.

Then again, decades of farm policy and land use restrictions have spiked the GINI coefficient in agriculture anyway. Mandatory GMO labeling will do little more than cement the already-egregious market advantage enjoyed by spectacularly gigantic firms like ADM and Monsanto, so maybe it's not such a big deal after all.

An Apology to my Readers

I've been posting here at EE since January of last year, and in that time, I've been writing under the warrant that fully euvoluntary exchange is universally acceptable. That indeed, if all six conditions are met and the exchange itself isn't morally or aesthetically objectionable, then not only would the tails of the voting distribution shelve any pretense at meddling, but even the busybodies themselves would pass their eye over the exchange in search of more worthy prey.

I was under the impression that the Euvoluntary Exchange thesis had something important to say about the nature of third party interference in mutually beneficial voluntary exchanges. I thought that Munger had made some very compelling arguments that fit well with not only the conflict resolution literature but with my own reflections gathered from close to four decades of trundling my corpulence upon this weary earth. I truly believed that a careful analyst, perhaps backed by frameworks forwarded by leading philosophers and economists could comment meaningfully upon modern instances of state-sponsored coercion.

I was wrong, and for that, I sincerely apologize.

From CBS, through Reason, and handled by the Dub-MOE, we now have irrefutable evidence that the EE conditions are insufficient to explain state intervention into the act of eating a meal in your own home.

Take your time. Read the links, especially the CBS link with the original story.

Now pause for a moment and ask yourself what the difference is between a cholera epidemic and a salmonella outbreak. Ask yourself if there is a meaningful difference between harm and external harm. I used to think there was. I used to think that an airborne contagion that could infect others without their knowledge and consent was substantively different in kind if not merely in degree than a food-borne illness whose risk was already captured in market prices. The metastasis of public health organizations suggests to me that my distinctions were the benighted ravings of an academic crackpot. Public health officials (in this story, retired public health officials) have now conflated private, one-off (minor) health risks with effectively unavoidable airborne pathogenic diseases. I had it all wrong.

I mean, the alternative explanation is that the snout of the state has begun to push past the euvoluntary fold, and that? That's just crazy.

You Gonna Eat That?

I assume this is a goof, but if the remarks from the SF Health Department are legitimate, it's a goof that has officials flustered.

It's an app that allows strangers to finish your lunch for when you can't cram the whole thing down your facehole yourself. My initial thought (beyond "this is a silly joke") is "f-ing nasty, man", but you know, different strokes and all. If someone wants to risk, I don't know, mononucleosis or something for a lukewarm, sloppy Reuben, that's their business. Caveat comedor.

What do you think? Public health hazard? Price discrimination? Recycling? What's the right analytical approach? Is LeftoverSwap euvoluntary?

Two by Four: Round 2

Last time, I questioned folks who invoke pedestrian notions of cost when discussing the encorpulentation of Americans. Today, I want to ponder the ecological rationality of gluttony and its partial role in body weight outcomes.

Our good pals Von Neumann and Morgenstern lend us four axioms against which to adjudge blackboard rationality:

1. Completeness: preferences can be weakly rank-ordered. I either prefer apples to oranges, oranges to apples, or I'm indifferent between the two. I cannot both prefer apples to oranges and oranges to apples. I think of the completeness condition as the anti-schizophrenic axiom. 
2. Transitivity: preference rank order preservation. If I prefer apples to oranges and oranges to bananas, I prefer apples to bananas. No rock-paper-scissors when it comes to preferences. This one is where it gets tricky when we include extra dimensions.
3. Continuity: there's some exchange rate at which I'll swap apples for bananas. Yes, I like one apple more than one banana, but all else equal, I'll give up a slice of apple for a bunch of bananas. And then it'll get awkward because I'm always tempted to call a bunch of bananas a "group" of bananas, much in the same way I'll call a bunch of grapes a "cluster" of grapes just for pure contrary cussedness. 
4. Independence: irrelevant choices shouldn't affect my rank ordering. If I prefer one apple to one banana, I should prefer one apple and one orange to one banana and one orange. This one is the most obviously difficult to sustain in an ecological setting. Suppose I prefer milk to apples. Add oranges to each. With apples and oranges, I can make fruit salad (yum!). With milk and oranges, all I can make is sadness and disappointment. Independence is violated (sort of).

These are nice axioms to use when we create those cute utility models with which to derive demand curves. The problem is, as with the GDP stuff I keep grousing about, is when our model shifts from being a tool to describe the world to being Procrustes' bed upon which to rack and hew mankind. Nutritional do-goodniks wage bright campaigns against sellers of chow balanced upon the thin reed of probable regret. No raw milk, no imported cheese, no big-ass sodas, no bundling of toys with fast food, no trans-fats, no bacon-wrapped frankfurters, no this, no that. You can't control your appetite, so it's up to us to control it for you. Don't worry, you'll thank us later.

This is the world of ex post regret. Would you like to super-size that?

Funny thing though, there's a lot to the argument. Ignore the shallow reasoning based on fiscal externalities and assume that we've got a world undistorted by farm bills and "health" policy (the scare quotes are there because we subsidize medicine and insurance and then pretend that we're subsidizing health). Even in a world where all costs are borne by the consumer, discounting is such that many folks will overeat. Gluttons will regret all the face-stuffing. Gorging yourself isn't euvoluntary.

There's a now-ridiculed old-timey virtue called temperance which unfortunately got all muddled up in the anti-alcohol campaigns of the late 19th and early 20th centuries. Temperance and a fair dose of table manners may have helped keep appetites in check. As with most other virtues, the path that leadeth there cannot be trod by political elites on the behalf of constituents. Forced virtue is no virtue at all. Duh. So if I prefer more food to less food today and I prefer being svelte to being obese tomorrow, I've got a challenge that confounds my Max-U rationalist. Maybe it's a fine time to recall that this problem is far from intractable. It's just that the particular traction happens to be out of the hands of politics but rather impaled on the forks of diners.

So yes, people are getting fatter. The solution isn't more and thicker bans. People are too hungry and too clever for that. At a minimum, it's directionally euvoluntary to stop doing harm. 

Lost and Found Redux: Lost and Founder

In my last post, I referenced a classic opportunity cost exam question. The scenario stipulates that you've camped out overnight for tickets to a concert whose box office price was $300. Before you got to the window, the tickets had been sold out. Dejected, you slog back to your car, but on the way you find tickets being sold by scalpers for a fivefold markup. Unwilling to shell out $1500 for the tickets, you hop in your Volvo Taco Truck and head to the nearest Waffle House for some smothered hash browns and watery coffee.

In your booth, you find an envelope. The envelope is not sealed, so you peer inside. Lo and behold, you find tickets to the very concert you were camped out for. At this point there is some hurried lip service to discharging a moral duty to return the property to its rightful owner, then the professor gets to the real meaty question: what do you do, attend the concert or head back and sell your windfall find? The answer tells you whether or not your students picked up the idea of opportunity cost (hint: many of them haven't). That's fine, but the scenario got me to thinking.

Assuming that there is indeed a moral imperative to find the original owner, does that obligation depend on the contents of the envelope? Is there a similar moral duty to return $1500 cash as there is to return $1500 worth of concert tickets?

We all know that value is subjective, but the closest thing we have to objective value is cash (nod to Nathanael Snow for reminding me that the value of cash is more contextual than subjective), so $1500 cash is worth $1500. $1500 in tickets is subjectively worth $1500 or more to the original owner. They were somewhere up there on the upswing of the demand curve.

So given this self-evident premium, should there be more consideration given to restoring goods to the original owner than to a market-equivalent amount of cash? Is this trash-treasure relationship relevant? If the owner of a booger collection who valued his lost or stolen boogers at half a million dollars be as deserving of restoration as a half-million dollar sapphire necklace owner? What are the relevant margins? Presumed social status? Does your own subjective valuation matter? When you find something, what assumptions do you make? Which of these are relevant to the effort you spend reuniting property with the rightful owner?

How do we form moral intuitions over found property and how do those intuitions change when we find cash instead of stuff?

And why would you go to der Waffle Haus when you drive a perfectly good taco truck?