Ticket Prices Pay For The Whole Seat, But You'll Just Need The EDGE

The chamber is sparsely, yet tastefully appointed. The lone orchid is in bloom, shrouded from the glassy-eyed gaze of the man in the chair, partly obscured by the shadow cast by the naked bulb incongruously dangling from a plain black wire and partly obscured by the thick rawhide strap fastening his head to the sturdy oaken top rail.

The silence is broken by the sharp, staccato click of steel-shrouded heels on blood-red tile. The woman is carrying a cage that John Hurt or George Orwell fans will immediately recognize. At one end is a military-grade OBA facemask with the window removed. Secured to that is a wire mesh tunnel, perhaps eighteen inches long with deadfall gates at each end. At the other end is a tiny tin shack, roof rusted, housing a hillbilly rat famished from a sparse diet of millet crumbs.

The woman quickly, professionally, and wordlessly attaches the contraption first to the dedicated bracket emerging from the top of the chair, then with a fluid motion that suggests a journeyman's familiarity with shipboard firefighting gear, strapped the repurposed breathing mask to the man's sweat-soaked face. The involuntary whine that escaped his lips did precisely nothing to deter either her resolve or her efficiency of motion.

The comically large gold-plated key in his right hand was leaving an impression in his flesh, even as he strained vainly against his restraints. He didn't notice as she glided out of view behind him and began releasing the first safety catch on the deadfall nearest the snaggletoothed rodent snuffling at the far end of the cage. He did notice as the deadfall fell and the rat cautiously advanced down the tunnel, its claws raking against the wire mesh in the most awful symphony he could imagine.

As her elegantly manicured fingernail stretches toward the next catch, his whine escalates rapidly through a keen, then a wail, finally landing on an eardrum-shattering shriek. His hand flies open and before the prop key can even clatter to the floor, the device is whisked from his trembling head and is being spirited away by a dedicated assistant. The leather bonds on his head, arms, and legs are released, and he slumps to the floor, weeping in the sort of ecstatic bliss that only a brush with the deepest of fears can evoke.

I invite you to draw your attention to the woman. If she were in possession of a psychiatry degree and the room were part of her professional offices, this would be called "aversion therapy" and would be perfectly legal. If, contrarily, her job were unlicensed and she used the professional title of "dominatrix," the session described above would be called "edgeplay" and would be illegal, at least if money changed hands.

Consider the possibility that emotional therapy is a vocation, and that the wisdom embedded in the heuristics employed by seasoned professional doms is as good (if not better in some cases) than the classroom education obtained in graduate school. If paid licensed therapy is euvoluntary, why isn't paid BDSM?

End prohibition now. Therapy is not a crime.

Now I Have a Pumpkin Patch. Ho Ho Ho

The economics of many of our beloved Christmas tales are either trivial (Charlie Brown's chronic despondency induced hyperbolic discounting) or have been done expertly by economists far more talented than I (here's the Dub-MOE on The Grinch and Landsburg on Ebeneezer Scrooge). Today, I'd like you to think about one of my favorite Christmas tales, Tim Burton's The Nightmare Before Christmas.

Consider if you will that one of the peripheral messages behind Jack Skellington's exploration of Sandy Claws's realm weaves a Talebesque tale underpinned by a surprisingly courageous acceptance of failure consistent with the central theme of Tim Harford's Adapt. For those of you who have yet to see the film, the protagonist of the story is one Jack Skellington, aka The Pumpkin King, lord of the annual holiday of Halloween. Skellington dwells in his own sovereign realm, ruling over motley spooks, ghouls, goblins, witches, and the dread Oogie-Boogie, an ambulatory, gambulatory burlap sack filled with creepy-crawlies. Santa Claus is a ruler in his own right, wielding dominion over a diminutive labor force and stacks of brightly-colored gift boxes. When Skellington stumbles upon a portal to the Land of Christmas in a secluded grove and joyously jumps through, the comedy of errors is well and truly underway. All singing, all dancing, etc etc.

To borrow an idea from a friend, each realm (and there are many others, including the Easter, Valentine's Day, et al) is its own tightly-bound network. By crossing the holiday divide, Skellington is exploring what, to him, is non-ergodic space. He is making a foray into unmapped territory. Wearing the goggles of an economist, it's a parable for entrepreneurship, even scientific inquiry.

Ultimately, the tale ends with a bit of euvoluntary cultural exchange: Jack's subjects frolic in the snow and Jack himself gets the girl, while Santa's left a bit tussled from a kidnapping, but none the worse for the wear. However, the audience is invited to imagine an alternate telling where the chief antagonist (Oogie) emerges victorious, ultimately murdering Santa, conquering Christmas Town, and subjugating its inhabitants.

In a world governed by the Precautionary Principle, the downside risk of allowing a creature like Oogie Boogie access to the gentler realms would be sufficient to justify the destruction (or at the very least gating) of the grove of portals. With a Halloween Town version of the FDA in place, the story would likely go like this: bored Pumpkin King mopes around for an hour and a half, Sally mops the floor for Dr. Finklestein, ghost dog inspires forgettable Forrest Whittaker movie, The End. With an exceptionally strong precautionary principle in place, life loses some of its luster, some of its excitement, perhaps some of its joy. We trade the thrill of making new network contacts for the mundane security of the familiar. I don't know about you guys, but that sounds like a pretty raw deal to me. Up with experience, up with exploration, up with the enduring human enterprise of expanding the boundaries of the map and shining new light into the dank crannies of the earth. Up with the unexpected friendship between lanky Pumpkin Kings and Sandy Clawses.

Merry Saturnalia, people. And a Euvoluntary New Year!

EE Goes to the Movies Ep. 1: Empire of the Sun

One of the legendary classic papers in economics is R.A. Radford's 1945 Economica piece "The Economic Organisation of a P.O.W. Camp" available here. As an object lesson in the value generated simply by trading an initial endowment, this piece is at once brilliant in its simplicity and delightful in its replicability. Some of the more engaging Principles of Economics professors out there should cop to a simple little classroom experiment where you randomly distribute randomly selected tchotchkes (double the randomness, double the fun!) to a classroom full of students. Have them subjectively rate their endowment on a scale of 1-10, tally the scores, then give them 15 minutes to trade (there are little flourishes you can do to this depending on what you want to emphasize) and repeat the assessment phase. In almost every attempt, the post-trading pseudo-GCP (gross classroom product) will be higher after the trading session.

Now, I don't know how many econ courses Spielberg slogged through at California State, but it seems at least a little bit unlikely that he's sat down with Radford for a cozy evening of comparative economic history.

Then again, the paper was based on what Raford himself actually witnessed in a prisoner camp, and spontaneous market formation is hardly rare. Be it marbles, Pogs, Pokemon, Barbie accessories, CIA terrorist playing cards, or thermal exhaust schematics for the Death Star, people require little prompting to begin trading when it's to their advantage.

Regrettably, I can't find a quickly available clip, but this tendency was nicely presented in Spielberg's 1987 film Empire of the Sun. A young Batman, before he even donned a Gatsby (yes, that's the proper term for a Newsboy Cap) and began prancing around the Disney lot singing about the exploitation of child labor, found himself a young ward in the custody of Japanese jailers in wartime China. While there, he busied himself as a gofer for the camp's mancgere, shuttling a little of this, a little of that, buying cheap and selling dear.

Here's the question (and I again apologize for not having a clip to share): do you get the sense from watching the film that the business of POW camp trader is euvoluntary? It's not that easy a question, is it? In an absolute sense, everyone in the camp (perhaps even the guards) has a lousy BATNA, but since the prisoners all more or less share the same grim fate, there's not a lot of disparity there. That is, until the gains from trade start to accrue to the entrepreneur.

Even if everyone is better off in the camp as a result of a functioning market, is it still okay to begrudge the modest wealth accumulated by the shopkeep? What's your opinion? How does Spielberg want you to think about it? Does the silver screen depiction mirror commonplace moral intuitions? Does it attempt to insert its own interpretations into the minds of the audience? How successful do you think it is?

Under what conditions do POW camp black markets stop providing net benefit and begin being truly predatory?