Monday, 16 October 2017

Speaking truth to "power"

Bob McManus writes at the City Journal:
Stephen Colbert, with arguably the sharpest tongue among America’s late-night TV ankle-biters, made his bones at the 2006 White House Correspondents Dinner, laying a vile spiel on President George W. Bush and finding himself the man of the moment. How brave, to speak such truth to power, gushed the usual suspects, and Colbert has been riding that wave ever since.

But he had done no such thing. In the absence of personal risk, haranguing the powerful can be soul-satisfying, and sometimes it forges careers, but it isn’t brave by a long shot. Thomas More spoke truth to Henry VIII, and it cost him his head. Dietrich Bonheoffer spoke truth to Adolf Hitler and was hanged in a concentration camp. Aleksandr Solzhenitsyn spoke truth to the Soviet Union and suffered grievously for it. Stephen Colbert piddled on the president’s rug, and he’s been cashing big-bucks checks ever since. See the difference?
Statements have to be costly to be credible. Cheap talk is .... well .... cheap talk. Signals need to be costly if people are to believe them. And there is nothing costly or brave about just sounding off against "power" when that "power" will not respond.

Saturday, 14 October 2017

Palgrave studies in ancient economies

An interesting looking new book series from Palgrave.

Call for Proposals - Palgrave Studies in Ancient Economies

Announcing a new series

This series provides a unique dedicated forum for ancient economic historians to publish studies that make use of current theories, models, concepts, and approaches drawn from the social sciences and the discipline of economics, as well as studies that use an explicitly comparative methodology. Such theoretical and comparative approaches to the ancient economy promotes the incorporation of the ancient world into studies of economic history more broadly, ending the tradition of viewing antiquity as something separate or ‘other’.

The series not only focuses on the ancient Mediterranean world, but also includes studies of ancient China, India, and the Americas pre-1500. This encourages scholars working in different regions and cultures to explore connections and comparisons between economic systems and processes, opening up dialogue and encouraging new approaches to ancient economies.

Series Editors:
Paul Erdkamp, Vrije Universiteit Brussel, Belgium
Ken Hirth, Penn State University, USA
Claire Holleran, University of Exeter, UK
Chunyan Huang, Yunnan University, China
Michael Jursa, University of Vienna, Austria
J. G. Manning, Yale University, USA

Contact for Proposals
Submissions are ideally between 60,000 and 110,000 words, although shorter submissions (25,000-50,000 words) will be considered for our Palgrave Pivot publication format.

Authors interested in submitting a proposal should contact the series editors directly or Laura Pacey (laura.pacey@palgrave.com)

Civil asset forfeiture, crime, and police incentives

Yes the police, like criminals, respond to incentives.

A new NBER working paper makes this point.

Civil Asset Forfeiture, Crime, and Police Incentives: Evidence from the Comprehensive Crime Control Act of 1984

Shawn Kantor, Carl Kitchens, Steven Pawlowski
The 1984 federal Comprehensive Crime Control Act (CCCA) included a provision that permitted local law enforcement agencies to share up to 80 percent of the proceeds derived from civil asset forfeitures obtained in joint operations with federal authorities. This procedure became known as “equitable sharing.” In this paper we investigate how this rule governing forfeited assets influenced crime and police incentives by taking advantage of pre-existing differences in state level civil asset forfeiture law and the timing of the CCCA. We find that after the CCCA was enacted crime fell about 17 percent in places where the federal law allowed police to retain more of their seized assets than state law previously allowed. Equitable sharing also led police agencies to reallocate their effort toward the policing of drug crimes. We estimate that drug arrests increased by about 37 percent in the years after the enactment of the CCCA, indicating that it was profitable for police agencies to reallocate their efforts. Such a reallocation of effort, however, brought an unintended cost in the form of increased roadway fatalities, seemingly from reduced enforcement of traffic laws.
Enforcement goes where the money is, not where the need is.


Friday, 13 October 2017

Intellectual property rights: yay or nay?

From the IEA comes this podcast in which Kate Andrews and Steve Davies talk about the good and bad aspects of intellectual property rights.
The Institute of Economic Affairs's Dr Steve Davies joins Kate Andrews to discuss the arguments for and against intellectual property rights - a topic that which particularly divides the libertarian movement.

In the podcast, Steve explains the philosophical arguments both for and against, ultimately arguing that copyright law forms illogical conclusions when taken to the extreme.

However, Steve thinks certain forms of intellectual property are justifiable and helpful, like trademarks, often because they spring up organically, and recognised by courts rather than determined by state policy.

He also points out, that as it becomes increasingly more difficult to monitor copyright infringement, changes to law may be needed for the 21st century.

The Latest bad idea in town: economic nationalism

From the IEA comes this podcast in which Kate Andrews and Steve Davies talk about the rise of economic nationalism.
From the left-ward shift of the Conservative Party in Britain, to the rise of Donald Trump in America, there seems to be a growing appetite for protectionism and central planning in contemporary politics. Steve and Kate examine some of the reasons behind this trend - and whether advocates of free trade are losing the "Battle of Ideas" in the 21st century.

They also look at what protectionist governments hope to achieve from adopting these policies - and how likely they will be to succeed in "bringing back jobs" for declining domestic industries.

Thursday, 7 September 2017

Pigs don't fly: the economic way of thinking about politics

This essay, Pigs Don't Fly: The Economic Way of Thinking about Politics by Russ Roberts is well worth rereading, especially as we are only weeks away from the election.
Politicians are just like the rest of us. They find it hard to do the right thing. They claim to have principles, but when their principles clash with what is expedient, they often find a way to justify their self-interest. If they sacrifice what is noble or ideal for personal gain, they are sure to explain that it was all for the children, or the environment or at least for the good of society.

Pigs don't fly. Politicians, being mere mortals like the rest of us, respond to incentives. They're a mixture of selfless and selfish and when the incentives push them to do the wrong thing, albeit the self-interested one, why should we ever be surprised? Why should be fooled by their professions of principle, their claims of devotion to the public interest?
And yet voters are stupid enough to be fooled.

Roberts makes a nice point about bootleggers and Baptists,
The Baptists give the politicians cover for doing what the bootleggers want. No politician says we should ban liquor sales on Sunday in order to enrich the bootleggers who support his campaign. The politician holds up one hand to heaven and talk about his devotion to morality. With the other hand, he collects campaign contributions (or bribes) from the bootleggers.

Sunday, 13 August 2017

"Democracy in Chains" versus public choice

From the Cato Institute comes this Cato Daily Podcast audio in which Michael Munger is interviewed by Caleb O. Brown about Nancy Maclean's book Democracy in Chains. The book paints Nobel Laureate and Cato Distinguished Senior Fellow James Buchanan as the scholar who would help bring down democracy using the methods of public choice. Michael Munger of Duke University comments.

Is price gouging bad?

No.

4.42 minutes stating the obvious.

Saturday, 12 August 2017

Why you want to keep politicians away from business

The ever disintegrating Venezuela gives us a great illustration of why politicians should be kept out of businesses. Trying to gain political support by interfering in the running of a business doesn't improve the business.
To survive months of street protests and an economy in tailspin, Venezuelan President Nicolas Maduro is trying to turn state oil company PDVSA into a bastion of support, further degrading an already vulnerable enterprise.

Political appointees are gaining clout at the expense of veteran oil executives, while employees are under mounting pressure to attend government rallies and vote for the ruling Socialists. The increasing focus on politics over performance is contributing to a rapid deterioration of Venezuela's oil industry, home to the world's largest crude reserves, and to a brain drain at the once world-class company.

Interviews with two dozen current and former employees, foreign oil executives, and contractors point to a PDVSA coming apart at the seams.

"Everything is a disaster and yet we have to clap," said a PDVSA employee, who asked to remain anonymous because she feared retaliation.
and
Now Venezuela's oil production is on track to end 2017 at a 25-year low, but the leftist government still relies heavily on PDVSA to be its financial motor.

That leaves management in a precarious balancing act and sources say political factions are increasingly locked in power struggles within the company.

A senior management team named in January that draws heavily on political and military appointees has left PDVSA's president, the Stanford-educated engineer Eulogio Del Pino, largely powerless, according to two high-level sources in PDVSA and the government who spoke on the condition of anonymity for fear of reprisals.

Meanwhile, the infrastructure of the company is crumbling, rig counts are at historic lows and refineries are working at a fraction of capacity.

Staff at PDVSA's once gleaming headquarters complain that many elevators are out of service, the bathrooms lack toilet paper, and their cars are broken into in the parking lot. Scarce paper and ink are diverted to make political posters.
and
Prominent new executives include trading division boss Ysmel Serrano, who used to work for current Vice President Tareck El Aissami, and finance vice president Simon Zerpa, a young ally of Maduro's.

The influx of inexperienced executives and middle managers is keenly felt by foreign oil executives, who say they sometimes spend hours waiting for PDVSA representatives and complain that simple decisions are inexplicably delayed.

"Most of the time executives don't answer phone calls or emails. It's surprising how young and unprepared some managers are," said a representative of a foreign firm holding a supply contract with PDVSA.

He said that managerial and operational chaos was worsening, with waiting time to load a tanker stretching to 30-40 days compared to 2-3 days a few years ago.
In short the business of politicians is politics, not business.

Thursday, 10 August 2017

George Selgin on "A Monetary Policy Primer, Part 11: Last-Resort Lending"

One of the few interesting bits of monetary policy is the central banks role as the lender of last resort.
For many, the "lender of last resort" role of central banks is an indispensable complement to their task of regulating the overall course of spending. Unless central banks play that distinct role, it is said, financial panics will occasionally play havoc with nations' monetary systems.
George Selgin's aim is to challenge this way of thinking. Its an interesting antidote to much of what you hear said about the importance of the lender of last resort role of central banks.

Worth a few minutes to read.