Commoditization vs. Trafficking

I had not heard it put quite this way before.  Regardless of whether this is logically defensible, the author does seem to make a valid empirical point:  exchange is more acceptable than "trafficking," for many people. (Click for a more readable image)

A Marxist wrinkle on the Aristotelian distinction of trading things as things and trading things as commodities.  Except it's a lot clearer than Marx.

From "The Cultural Biography of Things," by Igor Kopytoff, in The Social Life of Things, edited by A. Appadurai, Cambridge Press, 1986, pp. 64-95.

Kling on Trade

Arnold Kling gives his overview of the "Central Principle of Economics." See how many of the sidebar EE conditions you can recognize.

If Wishes Were Fishes: Dead Musician Edition

You can restore one dead musician to life. Who would it be?

So asketh Fightin' Steve H. Answers range from classical (plenty of Mozarts) to the more contemporary (at least one ODB). But the question itself asks more than it seems to. Professor Horwitz's own answer (John Entwistle) illustrates something about the nature of production in what is basically an extension of folk music.

The sole reason to bring back a Mozart or a Liszt or (my own pick) a Dvořák (okay, you caught me—I'd actually choose Grieg) is because they'd have a few good compositions left in them. Beethoven could have easily produced more work on par with Für Elise; Mozart could have had another Requiem in D minor or two given a few extra years on earth; Russian ballet would have certainly benefited from an extra Tchaikovsky composition or two.

But folk music, including jazz, blues, rock and roll, and their many offshoots combines the songwriter with the performer. In a way, most of today's pop where the performer doesn't get within arm's reach of a pen and paper hearkens back to the days of chamber music. But for much of the 20th century, the person on stage is the person who wrote the song (for the most part). Bob Dylan is Bob Dylan as much for his nosebeast yawrl as for the contents of his lyrics.

So if you were to bring back Entwistle, it would be for up to two reasons: 1) you expect he'd produce more studio work and 2) you want to enjoy a live performance. The second reason is inapplicable for a Handel or a Strauss. In other words, the marginal revenue product of a singer-songwriter is separable into two parts: the composition and the performance. If you lose one person, ceteris paribus, you lose two sources of value generation. The BATNA disparity for keeping a singer-songwriter alive is higher than for keeping a composer or a performer alone alive.

The recent trend towards separating these two functions therefore makes today's pop music more euvoluntary than in Janis Joplin's time. Right? Specialization of trade is limited by the extent of the market, yes? Cheap digital distribution means that the slog of studio production can be sourced to specialists, while the pretty people with questionable chops can run the tour circuit. Isn't that how it's supposed to work? The Wal-Mart model reigns supreme?

To answer the question however, I'd bring back Dwayne Goettel. In a flash.

Old and Busted: Tacocopter. New Hotness: 420drone

If the FAA comes through on strict measures to prevent commercial unmanned airborne air transport for small packages, we may have an opportunity to see the Allen-Alchian theorem in action.

The A-A theorem is one of those great blackboard theories in economics that tends to have contestable empirical support. It's pretty simple though: if you add a fixed cost (in this case, the cost of a criminal violation) to differently-priced substitutes, you tilt the relative prices in favor of the higher-priced good. In their textbook examples, that's why you should expect to see the best lobsters exported from Maine, the best apples exported from Washington, etc. Of course, this is holding everything else equal, which is really not the case in produce exporting, so that's why it's hard to find lots of evidence in support of the theorem.

But here, we've got a pair of well-timed exogenous treatment effects. Amazon and Taco Bell would (presumably) like to be able to deliver piping hot books and burritos straight to your door without all the tedious mucking about with roads and the like. But so would your neighborhood drug dealer. The difference is, Amazon and Taco Bell are already mostly compliant with statute law and the relevant regulations of their industries. The drug dealer is already in violation of a number of trafficking statutes, so one additional charge is far less likely to change their decision calculus. If a commercial drone can improve customer service or otherwise improve productivity, it is more likely that they will adopt the technology.

And for those property owners that wish to be unmolested by flyovers, there's much less legal recourse against smugglers than against above-the-board business owners.

The conclusion is clear. If we wish commercial drone operations to be legal and properly regulated in the US (whatever path to regulation is chosen, via tort search or FAA prior restraint), we absolutely must end the coercive, unjust war on drugs.

Tip of the hat to Eli Dourado and Ilya Somin for the idea.

Is Euvoluntary Exchange Just?

I'm not quite finished abusing Aristotle just yet. (NE, Bk. V)

Of particular justice and that which is just in the corresponding sense, (A) one kind is that which is manifested in distributions of honour or money or the other things that fall to be divided among those who have a share in the constitution (for in these it is possible for one man to have a share either unequal or equal to that of another), and (B) one is that which plays a rectifying part in transactions between man and man. Of this there are two divisions; of transactions (1) some are voluntary and (2) others involuntary- voluntary such transactions as sale, purchase, loan for consumption, pledging, loan for use, depositing, letting (they are called voluntary because the origin of these transactions is voluntary), while of the involuntary (a) some are clandestine, such as theft, adultery, poisoning, procuring, enticement of slaves, assassination, false witness, and (b) others are violent, such as assault, imprisonment, murder, robbery with violence, mutilation, abuse, insult.

I reiterate, justice is near. When its pale, far-mode phantom ascends, we witness corruption like the Star Chamber, or the kangaroo courts of the French Revolution, or the hideous social engineering shoggoths of Mao's Great Leap Forward, Stalin's purges, and Hitler's bloody eugenics rampage. Trials by jury, the due process of law, constitutional protections against unwarranted search and seizure... these are all defensible using consequential reasoning, but all of the judicial review imposed by the US Constitution serves as a reminder that Aristotle was right: justice requires context.

So how can euvoluntary exchange be just? Modern market exchange lacks context. When I go to the store and buy footie pajamas and hot cocoa mix, I know nothing of the vendor beyond the goods she offers and the price she offers them at. I don't know if she's kind to children and animals. I don't know if she's pious or profane, humble or hubristic, sunny or sour. In short, I make a judgement-free decision whether or not our exchange benefits me, and rely on her logic of exchange to decide if the exchange benefits her. Is this not vulgar?

It is not. The rules governing exchange that constitute a market order meet the conditions of virtue-preserving federalism.

Consider that a playground version of the Lex Mercatoria is just such an institution. There are rigid rules governing all trade (no takesies-backsies, rules of adverse possession, etc.), and there are local governing institutions. Don't believe me? As an itinerant child, I can assure you that if you brought the specific terms of trade from one schoolyard to the next, you'd find yourself excluded from the Lunchables secondary market. But also, the constant of "snitches get stitches" varies (or it did when I was a kid) by the barest whisper o'er the land. There is indeed a hierarchy of rules. And that's just as true for the real Lex Mercatoria as it is for the ersatz childhood version.

And when it comes to the local customs having primary authority, there's a reason that "when in Rome, do as the Romans" remains a useful cliche: folks who refuse to hew to local customs find it impossible to strike contracts. Just try running an im/ex business in Korea without dealing with the chaebol system. Contracts require offer and acceptance. The meeting-of-the-minds aspect of agreements means that you play ball or you go home.

A common moral identity? Ask Avner Greif about "impersonal exchange" and how it is in a modern market order, it just doesn't matter if my vendor is pious or profane, humble or hubristic, sunny or sour. High-trust societies with thick, functioning markets insist on at least a modicum of dignity for all. In a market society, it's completely normal to expect someone to discharge the obligations of a contract with no quibbling. The common moral identity of modern market participants is to honor contracts at a minimum to the letter, and if you're lucky, then the spirit as well. This approach is quite novel in human history. Clannishness rules human behavior. Overcoming that, or at least re-channeling it, is a remarkable feat.

As for the last one, the inability of local markets to rewrite the moral order, this is the one ordinary people have to be truly vigilant against. Inhabitants of the first and second estates have an incentive to improve the relative status of their houses against the third. This is particularly worrying when the third estate is growing rapidly (to the clear benefit of everyone qua consumer). Beware especially Helen Lovejoy political kayfabe.

Markets act as an organization preserving justice, just as good political organizations act to preserve the integrity of markets. That is, unless mischief is afoot. Euvoluntary exchange is both just and available when markets are available and have integrity. When that's not the case, the upper bound on the ability for people to serve each other voluntarily shrinks. Fair warning.

If there Was a Grand Canyon, She Could Fill it up with the Lies He's Told Her

Following up on Arizona's SB 1062, George Takei writes an open letter to the people of Arizona. In it, he pledges to boycott the entire state.

If your Governor Jan Brewer signs this repugnant bill into law, make no mistake. We will not come. We will not spend. And we will urge everyone we know–from large corporations to small families on vacation–to boycott. Because you don’t deserve our dollars. Not one red cent.

Having studied public choice economics, I'm perhaps over-sensitive to methodological individualism. I have an appreciation for the nature of coalition politics and how it can be that no one's first choice for either policy or representative could (under certain circumstances) end up on the ballot. Indeed, since I understand all this in my bones, I am deeply puzzled by Takei's pledge. It strikes me as a missed opportunity.

As I noted a couple of posts back, the struggle for equality is one waged in the moral sensibilities of the constituency. If I were an avid gay rights champion, I would take this as an opportunity to visit Arizona and reward gay-friendly businesses, perhaps picketing bigoted firms while I was in town.

The thing I find remarkable is that Takei and his family were subjected to Executive Order 9066, one of America's greatest 20th Century moral embarrassments. Roosevelt's WWII internment of Americans with Japanese ancestry assumed guilt by association. Though different in scope and application (especially since it was conducted by force rather than with voluntary withdrawal), the logical error was still the same: [Japanese implies traitor] <==> [Arizona business owner implies bigot].

But that's not the EE point. What I strive to do here is to understand moral intuitions. In Arnold Kling's terms, this issue is spoken of using the language of oppression. The oppressed have few tools available to them to signal displeasure, among them are economic sanctions. This issue falls flat to libertarians, since explicit coercion is actually decreasing in Arizona. And for conservatives, it allows ordinary citizens to fight back against encroaching barbarism. Of the three moral dimensions, I think I side with the progressive sentiments the strongest. The systematic oppression of LGBT citizens is an affront to common decency. However, I also find myself predisposed to the notion that the heavy lifting of changing minds is a task for rhetoric, not for mulish legislation. Plugging your ears and turning your back punishes the innocent along with the guilty and risks further alienating friends and allies.

There's nothing euvoluntary about refusing ordinary arms-length commerce because of taste-based discrimination. Why work to make the world of peaceful exchange even smaller by withholding your business from folks who would never consider such offensive behavior?

Boycotts are a heuristic. Examine your impulses.

NYTimes Cries Out for the Answers that Euvoluntarism Can Give!

Goodness.  This is just what we want people to ask!

Here ya go.

Haggling Norms: Euvoluntary?

Jeffrey Tucker (with special thinks to Cathy Reisenwitz) has a great piece on haggling. The question he wants to us to ask ourselves: how is a woman buying a car in Illinois like an American buying a sponge in Italy? As a former expat, I frequently found myself on the short end of the stick abroad. It upset my wife to no end when I'd get shafted by a vendor who mumbled something like, "he's an American, he's got money" in a language he thought I didn't speak.

Still, a deal's a deal. It was voluntary.

But was it euvoluntary? Does the fact that other folks get better deals make your relatively lousy terms of trade unfair? Why? Which EE condition is violated?

Rise of the Machines

The always-interesing Robin Hanson talks about brain uploads here:

What do you think? In a world of machine intelligence, even where the minds are emulations of meat-generated human brains, how will the face of euvoluntary exchange adjust? With insanely fast clock speeds, uploads are likely to quickly outstrip traditional humans in population as well as wealth. Our descendants could end up in a world where BATNA disparity is far beyond what we encounter these days. How will moral intuitions change? How will the institutions of trade adapt? Will the basic lessons of economics still apply?

Everybody Poops (Peas and Gravy)

In yesterday's post on wagers, I casually asserted that attempts to combine the sacred and the profane is fingers on a chalkboard for regular folks. In my haste, I neglected to support this claim. Here is that support.

Michael Sandel. What Money Can't Buy: The Moral Limits of Markets

I think that even after you've read Sandel (and you should, he's as good as you're likely to get on the subject), you'll mostly agree with me that his claims are fundamentally aesthetic. But here's the difference you get with Sandel compared to a prototypical hand-wringing anti-capitalist: he makes normative claims about the extent of markets underpinned by rigorous positive aesthetic analysis. Whether Michael Sandel likes the idea of paying cash to see Shakespeare in the Park is not relevant to his argument, it's that he's (correctly, as far as I can tell) identified that ordinary people in their ordinary lives object to these sorts of arrangements.

Well, maybe ordinary folks don't care that much about Shakespeare per se, but let's not let that distract from the key point. Toddlers like their food touching about as much as grown-ups relish impersonal monetary transactions in deeply personal settings. We call it "tithing" and tell each other and ourselves that the geld goes to "God". Parishioner please. Economists are trained (and the good ones continue to hone this valuable skill) to peer through petticoats like these to the truth hidden beneath. We trade in sacred goods all the time, we just have a knack for calling it something else. TANSTAAFL.

A question then of values: the economist would have you swallow your discomfort, encourage you to simply and honestly acknowledge that incentives matter, that to get more of something you want, you must must must pay for it. The economist will also give you a laundry list of good, convincing reasons why impersonal voluntary exchange tends to be the most efficient way to trade. Hey-presto, job done, right? Everybody poops, so why just plainly and publicly acknowledge that and then get along with the business of business?

Or is this all just intolerably indecent? Am I a bad person for advocating for the legal (and marginally safer) trade in sexual services? Or for vigorous resale markets? I reject the notion that my own sentiments of disgust should be elevated to the realm of public policy; does this make me an ogre? Should I conform to the shared fib that denies that from all living buttocks emerge feces? Does that make for a better world? Is my position a minority one because it's just plain wrong? Prices are information, but maybe I'm totally wrong and it's sometimes more comfortable to dwell in ignorance.

How Interesting: When Disability Is An Asset

So, it appears that people are hiring tour guides at the Tragic Kingdom, my old employer Disney World in Orlando, FL.

Nothing surprising about that .  But there is a wrinkle.  If there is a disabled person in your party, you get to cut the line.  This can save an hour, or more, at each ride.

That--the right to cut the line--is a valuable asset.  It's non-transferable, though, as it should be.  The disabled person can't sell the right to cut in line to someone else who is able-bodied.

Now, growing up in Central Florida, I have seen parties where one person was the designated wheel-chair person, having just pretended to be disabled so the group can cut in line.  That's wrong, no good, etc.

But can you hire a disabled person, someone you don't know, to go around with your party?  Is the exchange euvoluntary?  The disabled person (presumably) is made better off.  In fact, otherwise unemployed people may now get jobs, where someone else pays their ticket cost, and pushes them around to go on Disney rides for free, and not have to wait in line.

The problem is that all the other people in the party get to cut the line also, because they are paying the disabled person to be their "guide."  Perhaps the disabled person is also a good tour guide, having been to the Tragic Kingdom 100 times or 1000 times on one of these gigs.  But the tour guide part--meaning pointing out the sites and talking about history-- is NOT what makes the hire attractive.  It's the disability part.  It's the wheelchair.

The people hiring the "tour guide" must be better off, or think they are.  The tour guide is explointing his/her disability, but it's a job.

Who is harmed?  The people waiting in line are likely to have wait a little longer, but if this practice is not too widespread it won't be over a minute or two (times 500 people in line, that's a real cost, of course).

Should this practice be illegal?  We give disabled people other privileges, why not this one?  Is it euvoluntary, or should the state intervene?

(nod to Jeremy Balog)

UPDATE:  Check back two days earlier for SW's take on the same issue.  I should have checked!

Virtue-Preserving Federalism

The Whitest Man on Earth ever so impishly guides my eyes to a Forbes piece of his from a few years back. In his tale, he buys ponchos cheap from dollar stores and sells them dear at sporting events.

Much like our ice truck yahoos or Adam Smith's sea merchant, Dubbers braves the maelstrom of uncertainty. Will it actually rain? Will he be able to move his entire inventory? Will the Crimson Tide roll far enough inland to justify snapping up more than one game's worth of ponchos?

Will university police throw him in an Alabama slammer for unlicensed sales?

There are two broad sorts of risk involved here: risks from nature and risks from man. Within each, we can find the finer taxonomies we're used to of risk, uncertainty, and non-ergodicity. There's not much anyone can do about the weather or the frequency of earthquakes or the likelihood of being swallowed by a sea serpent, but there is something we can do about our tolerance for the caprice of our legislators.

Anti-gouging laws, bans on genetic research, prohibitions against prostitution. These things prevent people from serving each other. Worse yet, the very notion that the scope of legislative power is broad enough to encompass virtually any activity that involves voluntary exchange between consenting adults chills the entrepreneur. From her perspective, it's bad enough that the ordinary risks of the market and the ever-shifting whims of her as-yet unidentified customers shake her confidence, so just imagine how much worse it is having to worry about whether or not the cops are going to upturn your stall, unplug your reefer and toss your tacos in the sewer. The threat of preemptive expropriation compounds upon fickle fortune in times when the simple dignity to try is subjugated in civil society.

But do we even need entrepreneurs? Do we need creative destruction? Innovation? Good question. I suppose we could be happy enough living in mud huts and plowing our subsistence farms by hand, but the fact that we see vanishingly few people actually doing this strikes me as reasonably good evidence that humanity cherishes those few of us who pack our bags for the hike out of Hobbes' jungle. It seems painfully obvious that the lot of humanity is advanced by the freedom to experiment, to search for the little ways we can find to strike mutually beneficial arrangements. Conversely, prosperity is retarded when the median constituent has granted political elites, either through inattention or active demands, the authority to meddle in private affairs.

If you don't want to buy what an entrepreneur is selling, that's great. Don't buy it. But that's no excuse to tolerate elected officials who have made it their business to go round smashing eggs in the nest before they even hatch. That's a great way to ensure the hens stop laying.

Entrepreneurship is far from euvoluntary. It's also the camshaft of economic growth. Its henhouse deserves to be free from the guardianship of elected foxes.

Sugar Baby Colleges: You Sure Know How to Arrange Things

With apologies to the Eagles:  "A rich old man, she won't have to worry...she'll dress up all in lace, and go in style."

Or so it seems, given the rise of "sugar baby" college ladies using "Arrangements.  The story is here.  The web site, "SeekingArrangement.com" , is here.  ("Sure know how to arrange things," indeed).  You may not want to click through, however.  Not sure what sort of ick cookies THAT site comes with.  After all, "It breaks her heart...to think her love is only...given to a man with hands as cold as ice."  The Eagles lyrics/video:


All leading to the question:  euvoluntary?  These young ladies, according to the article at least, are looking for something like $3,000 per month.  That allows them to pay their college expenses and stay in school.

  They could, of course, work as waitresses, or some other job.  But it wouldn't "pay" as well.  And this way they can fool themselves into thinking it isn't pay at all.

And what about the Eagles' song?  Is "wife" really the "oldest profession," after all?  That young lady clearly had choices.  She just like to dress up all in lace and go in style.  Still, I guess every form of refuge has its "price."  Euvoluntary?

With a nod to John-O, who has a daughter, bless his heart.

Are Gifts Exchange?

In one of the most interesting passages in one of the most important articles in the pedagogy of economics, R. A. Radford has this to say:

Very soon after capture people realized that it was both undesirable and unnecessary, in view of the limited size and the equality of supplies, to give away or to accept gifts.... ‘Goodwill’ developed into trading as a more equitable means of maximizing individual satisfaction...

 

Now, isn't that interesting?  Using gifts, in a repeated bargaining situation is not just inefficient (though it is that).  It is also more equitable to use exchange.  If I give a gift, and expect something in return, that is an exchange.  When does this kind of relation cross a line into exchange?  And if a gift requires a reciprocal gift, is giving a gift a problem for euvoluntary exchange?  Should I refuse the gift, if I reject the implied reciprocal obligation?

An interesting study offers some insights:

You Owe Me , Ulrike Malmendier & Klaus Schmidt , NBER Working Paper, November 2012

Abstract: In many cultures and industries gifts are given in order to influence the recipient, often at the expense of a third party. Examples include business gifts of firms and lobbyists. In a series of experiments, we show that, even without incentive or informational effects, small gifts strongly influence the recipient's behavior in favor of the gift giver, in particular when a third party bears the cost. Subjects are well aware that the gift is given to influence their behavior but reciprocate nevertheless. Withholding the gift triggers a strong negative response. These findings are inconsistent with the most prominent models of social preferences. We propose an extension of existing theories to capture the observed behavior by endogenizing the "reference group" to whom social preferences are applied. We also show that disclosure and size limits are not effective in reducing the effect of gifts, consistent with our model. Financial incentives ameliorate the effect of the gift but backfire when available but not provided.

UPDATE:  Continuation on how the law handles obligations and gifts, under tax code...

GDP vs. EE

Double-entry accounting serves commerce well. I don't pretend to know the intricacies of GAAP  beyond what I picked up as an undergrad, but as an improvement over the single-entry ledgers of antiquity, modern standards are fair, transparent, uniform, and reliable. For the purpose for which they were tailored, they serve admirably.

Repurposed, accounting standards may be misleading. Consider national income accounting. National accounts treat sovereign nations as if they were meaningful business entities and estimate* the productive activities within. Annual GDP figures are sort of like a nation's income statement. Recall from your intro to macroeconomics course its components:

GDP = C+I+G+(X-M)

or;

Gross Domestic Product is the sum of the following:

1. Consumer expenditures, which includes final purchases of new non-capital products. From a business accounting perspective, this would be stuff that gets filed under "expenses". For people, it's everything you buy at the grocery store.
   
2. Investment expenditures, which are goods that get capitalized. It's true that the line between expenses and durable assets can be a little blurry at times, but in general, if you buy something that you can apply depreciation to, it counts as investment expenditure. Note again, these are purchases of new capital equipment. A fresh-off-the-floor front end loader would count, a used quarry truck would not.
   
3.  Government expenditures, including local, parish, county, state and federal outlays. Note the sign here. G is counted as directly contributing to GDP. Because of this, you might be able to squint your eyes and see how the "growth" camp in Europe could become convinced that more government spending is "good for the 'economy'", in the sense that more G directly boosts GDP (and possibly again using the curious logic that is the fiscal multiplier). There's quite a lot to say about this component, and perhaps I will return to it in another post, but for today, I'd like to consider:
   
4. Net exports. X stands for "exports", M for "imports". Again, the idea of (X-M) makes sense for firms. Firms sell what they produce (X) and purchase intermediate goods for transformation (M) or for to run the company or whatever. A firm that has more value coming in the aft hatch than going out is on a fast boat to Puerto de Bankruptia. 

The advantages to using an accounting technique among nations are similar to those for firms: you can write neat ledgers, tidy balance sheets, and give currency traders the information they need to ensure the capital account matches the current account. All very nice and proper.

Except when GDP pulls double duty.

Where GDP is usually referenced by economists and the press is as a proxy for the health and vitality of the economy. Higher GDP per capita tends to correlate well with higher standards of living and better material well-being. There are quite a few things folks consider desirable that track well with high GDP, like lower violent crime, longer life expectancy, lower infant mortality, et al. That's great, but if we're measuring prosperity, it seems kind of perverse to ding your metric for exchanges that happen in one particular direction across one particular type of border. By using GDP as a proxy for prosperity, the deck is sort of stacked against the euvoluntarity of international trade, and this is completely independent of any intertemporal, loanable funds considerations. It's almost tacitly suggesting that imports are something we have to suffer for the privilege of exporting. How strange.

I can perhaps understand how economists might want to concern themselves with prosperity maximization. I'm more puzzled by ones who translate this to "GDP maximization".

I'm sort of curious if folks' moral intuitions towards overseas trade would change if some snickering rogue could convince the profession to switch the sign on imports.

In the past, I've puzzled over which component of EE is violated by international trade, and I have a suspicion that this might have a little something to do with it. Anti-foreigner bias really does seem to be worse (anecdotally, mind you--I haven't done any rigorous research on this) for buying than for selling. Folks seem to be happy to sell American-made goods to the rest of the world, but bristle when it's cheap imports arriving in large ships. Maybe the GDP calculation links moral intuitions to the conventional capacity to exchange. Maybe. What do you think? Are national accounting techniques endogenous to intuition? The other way round? What other plausible stories can be told about the euvoluntarity of international trade and GDP accounting?

Bonus link: Munger on price-gouging and Locke, tied closely with his forthcoming follow-up work on Euvoluntary Exchange. Enjoy.




*Note that I use the word "estimate" and not "calculate". For practical purposes, GDP reckonings are usually close enough as to make little difference for panel comparisons among entities with similar regime characteristics, but rare events can introduce bias into the measure. This phenomenon is extremely interesting and fuels quite a bit of research, but it's a bit off topic, so I won't dwell on it here.

Kids Prefer Euvoluntary Exchange

I've long held a suspicion that many moral intuitions are holdovers from childhood lessons. Fairy tales are moral nilla wafers, intended for minds too feeble to grasp narrative subtlety. "Adult supervision" usually means reigning in kids' natural reaction to situations, ranging from "golly, I wonder what that fork tastes like after I jam it into that power outlet" to "hey, that kid has a toy I want and all I have to do it punch him and take it." Children's sports and games reflect cultural norms, at least in the meta-rules they convey (note that soccer is popular on the continent and in Latin America, hockey in Canada, football in the US, cricket and rugby in the commonwealth).

The Dub-MOE on Sweatshops

Art Carden on sweatshops, at Forbes.

Would poor people be better off if we closed the sweatshops, and did nothing else?

Tales from the Mancgere

Claims of skullduggery leveled at market makers come quick to the lips of the pedestrian economist. Such claims are usually grossly mistaken, but every now and again evidence seems to suggest that the secondary market as she is arranged, works poorly.

Here is a story about Christos Kamenides, a Greek professor (un)fed up with non-euvoluntary markups by gadabout wholesalers that he just up and sidestepped the production chain. Tired of excessive markups at the grocer's, he arranged a direct-to-the-consumer market between Greek farmers and shoppers. Farmers, for their part, get paid fairly and immediately--rather than waiting as long as a full calendar year for payments that for all they know might not ever arrive at all (it's fine for foreigners to mull about the ramifications of possible Greek default from our cozy offices, but a much different story for folks who have to live with the Sword of Papademos hanging o'er their head).

Without knowing more about the intricacies of the Greek agriculture market, I can only share my suspicion that the Southern European penchant for interventionism has managed to leak into the production, transportation and sale of food. If a wholesaler can leave farmers in arrears for over a year, that seems to be a rather dreadful failure of either the business model, the regulatory environment or the futures market. I won't bore you with a rehash of criticisms of the locavore movement here, but I will mention that this effort to bypass the middleman does not fall afoul of many of the fallacies of mood affiliation that plague most declarations of local farmer solidarity. Here we have a failed market and a low-cost alternative that (for the moment, anyway) effectively skirts a dysfunctional distribution system. It is a nice little flowering of euvoluntary exchange in a swamp of debt crisis* and central planner meddling.

Simply beautiful.

*(Author's note: it's not my first choice to refer to the problems in Greece as a "debt crisis", as by my reckoning they have a "government problem", but young lass, alas and alack, I lack the clout to rebrand the bee date, let alone the debate)

Jews Don't Make Anything, So Create No Value?

EE fan (and author of SMBC!) Zach Weiner sends this snippet, for our consideration:

"The Jews were unpopular, partly because of this narrowness already noted in the Roman world, partly perhaps because they had already fallen into that habit of merely handling things for exchange instead of working to make them with their hands." Chesterton's "The Everlasting Man" chapter 4.

Okay, let's ignore the stupid anti-Semitism. Evil, common, but not very creative or interesting.

Let's ignore the fact that even the factual premise is absurd: many Jews were in fact artisans, very skilled artisans, because human capital (jewelry maker, blacksmith, carpenter) was portable. The reason is that you could never tell if some jack-leg king-o-the-month needed a scapegoat and decided it was time for a random Jew-fry, and the people had to skedaddle. This part is just dumb, and wrong: Jews have been brilliant at making things with their hands, for 3,000 years.

The interesting thing about this quote is that it more or less takes it for granted that anyone who just "handles things for exchange" is not creating any value. The Mancgere, then, could be an honorary Jew, in terms of the opprobrium and scorn focused on someone who just trades but does not produce.

Thanks, Zach. Well quoted. I had not seen that one.

What Can Society Force Women to do, or NOT do, with Their Bodies?

Yesterday was the first post in this two-part discussion. Here is the second.

Let's review the laws that tell adult women what they can do with their bodies:

1. Casual sex with strangers: no problem
2. Casual sex with strangers where he pays for airfare, hotel in the Bahamas, jewelry, dinner, new clothes: no problem
3. Casual sex with strangers where he pays the woman for her time: illegal in most of US, though legal in much of the world. (on this map, red is no, green is yes).
4. Causal, though athletic, sex with strangers on film, to make pornography, where filmmaker pays the woman: generally no problem
5. Donation of eggs to fertility clinic: no problem
6. Sale of eggs to fertility clinic: iffy. Amazing story here: "If you pay something, you get lots of girls."
7. Intentional abortion of 10 week old fetus: in most states, no problem.
8. Donation of baby to anonymous guardian chosen by adoption agency: no problem
9. Donation of baby to well-qualified guardian selected by mother: no problem
10. Sale of baby to well-qualified guardian selected by mother: clearly illegal, and most people would probably say a grotesque ethical violation.

Here's my question: is the difference between 10 (terrible) and 8 or 9 (admirable) really that big? And is our admiration of 8 or 9 conditioned by the idea that 7 (abortion) is really, actually, deep down ethically repulsive?

And, as always on this blog, I ask the exchange question: if donating a baby to someone you select is okay, why is selling the baby NOT okay? The problem is NOT transferring ownership of the baby. The problem is compensating a desperately poor woman who really needs the money. Are you sure that's the right policy? Why does everyone hate poor people?