EU Insurance Ruling: More Pain for Women?

by Vladimir Guevarra

Wall Street Journal
March 1, 2011

To all women out there: Which would you rather have – cheaper or more expensive car insurance? Or if I can sharpen the question a bit, would you pay more for car insurance in the name of the struggle against gender discrimination?

Well, today, the European Court of Justice has answered that for you.

The EU’s highest court declared illegal the widespread practice of charging men and women different rates for insurance, in a major decision which would overhaul the pricing of insurance policies across Europe.

Generally, insurers charge cheaper life and car insurance premiums to women because statistics show that women live longer and cause less car accidents.

But no, the ECJ said that’s gender discrimination and it needs to end by Dec 12, 2012. That means, ladies, you’ll have to get ready for more expensive premiums.

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Privacy and the Invisible Hand

by Robert Hahn and Peter Passell

Forbes
February 28, 2011

Some four decades ago, Nobel economist George Akerlof argued that markets didn’t get it right when sellers knew a lot more than their potential customers. In the used car market, for example, buyers can’t readily distinguish lemons from non-lemons without investing in the services of an independent mechanic. So they are forced to assume the worst. Bad cars, in effect, drive the good ones from the market, leaving both buyers and sellers worse off.

To many economists, this problem of “asymmetric” information constituted a solid justification for regulating car sales. State legislators agreed, passing a spate of laws that guaranteed buyers the right to return lemons. But this consumer protection was hardly free: it added to the cost of transactions in the used car market.

What nobody noticed at the time, though, was that one man’s market failure was another’s market opportunity. CarMax pioneered the used-car guarantee, which finessed the information problem. And many other used car dealers followed suit.

These dealers have a strong incentive to discover faults and repair them before they put them up for sale. Of course, guaranteed cars sell for higher prices. But that’s just the point: the market found a way to separate the good cars from the bad ones.

Why are we telling you this? Because, given a little time, markets have a way of fixing themselves in more situations than you might imagine.

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MFI conference salutes ‘economists’ economist’ Gary Becker

The University of Chicago News
February 25, 2011

The President of the Czech Republic, a former U.S. Secretary of State, a Nobel laureate, and distinguished economists saluted the work of Gary Becker as they took part in a daylong conference held in honor of his 80th birthday.

University faculty joined with other leading scholars in the Weymouth Kirkland Courtroom at the Law School to discuss the role of markets in the modern economy, economics and government policy, and new directions and continuing breakthroughs in the field.

The remarks frequently referenced the pioneering contributions of Becker, University Professor in Economics and 1992 recipient of the Nobel Memorial Prize for Economic Sciences.

“Gary Becker is not only one of the world’s leading economists, he is also one of the most influential scholars in the world,” said President Robert J. Zimmer in his opening remarks at the Friday, Feb. 11 gathering organized by the Milton Friedman Institute for Economic Research.

"In his intellectual fearlessness, which he has demonstrated time and time again, he is an exemplar of the aspirations of the University of Chicago," Zimmer continued.

Former U.S. Secretary of State George P. Shultz, who served as Dean of the Graduate School of Business, now Chicago Booth, was the first presenter at the conference. He discussed one of Becker’s proposals—confronting the failure of the war on drugs by legalizing and taxing drugs—and made suggestions for further research.

Shultz urged Becker to study the experience of Portugal, where drugs have been decriminalized and treatment programs offered to addicts, and to explore other ways to shift the demand curve. Shultz, who recently turned 90, joked that at 80, Becker is a promising younger scholar who has years ahead to follow up on these research suggestions.

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The canon of economics

Economist
February 24, 2011

One hundred years ago, in March 1911, the American Economic Review (AER) published its first article—on irrigation in the “sun-blistered” deserts of the western United States. The article described how the “fervid suns of May and June” melted “vast beds of snow and ice”, so that “springs and torrents rush down to the lowlands” and “the rivers overflow their banks”.

It is fair to say that the journal’s prose style has rushed downhill since those first lyrical pages. But if the AER’s opening article ranks among the best-written in the review’s history, it does not rank among the best. To mark its centenary issue, the journal asked six eminent economists to trawl through the thousands of papers that followed and pick the top 20. The results, with links to all 20 papers, are available online.*

The links are worth clicking on. Many of these papers are more cited than read. They are known not by their full titles, but by the author-and-date shorthand (Modigliani and Miller, 1958; Friedman, 1968; Diamond and Mirrlees, 1971) used in references. Reading them in the original yields some pleasing rediscoveries.

Unsurprisingly, the list includes the 1955 paper by Simon Kuznets explaining why inequality might first rise then fall in the course of economic development. Surprisingly, nowhere in the paper did he actually draw the “Kuznets curve” that is now inseparable from his name. (He described the arc of inequality as a “long swing” instead.) Robert Mundell’s 1961 theory of “optimum currency areas”, which lays out the conditions for a workable currency union, is now often cited by the euro’s critics. Ironic, therefore, to note that Mr Mundell wrote the paper to show why flexible exchange rates were impractical because many nations are not optimal currency areas either. Should every local “pocket of unemployment” have a “separate currency”, he snorted.

With one or two exceptions, the chosen papers convey an impression of economics as a tidy, coherent discipline. The subjects covered are traditional: consumption, tax, currencies, inflation, that sort of thing. There are no excursions into sumo or intestinal worms. The furthest off-piste they go is Anne Krueger’s 1974 article on rent-seeking, explaining why people may lobby for governments to distort the economy.

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See also

Huck and Jim and Law

by Eric A. Posner

New Republic
February 21, 2011

There is a story about the University of Chicago economist who complained in a seminar that he did not have any friends. “Buy one!" came a call from the back. A similar response will greet Ethan J. Leib’s new book, which argues that friendship should be promoted as a matter of public policy and subjected to legal regulation. If you think that friendship should be legally regulated, you just don’t understand friendship.

Leib anticipates this reaction and spends a great deal of time trying to refute it. Courts already do regulate friendships, he observes, and no one seems to have a problem with this. In many states, friends owe fiduciary duties to each other. This means that if you sell your old car to a friend, you have an obligation to mention the leaky carburetor and perhaps to charge a fair price—obligations that one does not owe to strangers. Friends who form business ventures and then fall out may discover that courts hold them to a higher standard of conduct. Since friends trust each other, they are vulnerable to being taken advantage of, and some courts take this factor into account when resolving cases. A stranger who breaches a contract is not as odious as a friend who betrays his trust: although their behavior may be identical, a court might come down harder on the friend than on the stranger.

Leib also points out that the most intimate relationships are shot through with legal regulation. We sometimes think that marriages are “outside” law. In fact, husbands and wives owe countless legal obligations to each other. They must provide care and support, and if the marriage falls apart, the state intervenes and arranges the most intimate details of their lives, such as how long each may spend with the children. In return, spouses get tax breaks (although sometimes they have a heavier tax burden) and they enjoy special legal privileges—to make life and death decisions when the other is in a coma, to refrain from testifying against each other at trial, to take leave from work when the other is sick. If husband and wife, why not friend and friend?

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Read the Response by Prof. Leib

Monopoly, Milton Friedman’s Way

by Damon Darlin

New York Times
February 19, 2011

When Hasbro showed a new version of Monopoly last week at the Toy Fair, people were aghast that an infrared tower in the center of the board would squawk instructions, track players’ money and make sure that everyone abided by the rules.

A generation of children may never learn to make change. They may never learn to argue about rules and change them. And they may never, as I and a group of Monopoly fanatics in college did in a great all-night game, learn important economic lessons. “There might not be the attention span for that anymore,” said Mike Zelenty, one of the players.

Monopoly was taken seriously in Shorey House at the University of Chicago in the late 1970s. A room was set aside as “The Monopoly Room.” But in that post-Vietnam, pre-Reagan era, all assumptions were questioned and a game our parents played was no exception. Rules were meant to be altered. The house even convened a “constitution convention” to change the official rules of the game to allow a person to build a hotel on a property without first having to own four houses. Mr. Zelenty, now a corporate lawyer in his native New Jersey, remembers holding a sign that said, “New Jersey Espouses / Hotels Without Houses.”

The other thing taken as seriously in that dorm was free-market economics or, more precisely, Milton Friedman, the University of Chicago economics professor. This was a house that frequently invited Professor Friedman and his wife, Rose, to sherry hours. House members ran a snack bar in the basement of the dormitory called Tanstafl, an abbreviation of a saying favored by Mr. Friedman, that “there ain’t no such thing as a free lunch.”

Mr. Zelenty owned the greatest of treasures any of us could imagine because it combined those two passions. He had asked Mr. Friedman to sign his Monopoly board at one of those sherry hours. The Nobel laureate did so, writing, “Down with” above the game’s name. We didn’t play on that board. No one ever played on that board. (Mr. Zelenty said he still has it and wants to donate the relic to the university one day. “It’s in a place of safety more than a place of honor,” he said.)

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Information Overload

by Carl Bialik

Wall Street Journal
February 18, 2011

The latest information about information overload is a lot to handle.

Wielding numbers that stretched to 20 or more digits, researchers recently reported on the world's massive ability to store, communicate and compute information. All three have grown at annual rates of at least 23% since 1986, according to a study published this month in Science.

Translated to a human scale, the massive numbers mean that the average person in 2007 was transmitting the informational equivalent of six newspapers per day, and receiving, in turn, 174 newspapers of data.

For data engineers, this might seem like cause for celebrating humanity's expanding universe of information. For the rest of us, it is another reminder that information is piling up at overwhelming rates.

But the digital avalanche isn't as massive as those numbers suggest. Much of the growth reflects the surge in high-resolution video and photos. In addition, while there is much more information available, each piece is being consumed, on average, by far fewer people than in the past.


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Fool Coverage

with Daffy Duck and Porky Pig

Story by Tedd Pierce
Directed by Robert McKimson

Not Having Enough Sex? Economic Theory May Help

Wall Street Journal
February 12, 2011

Couples have long squabbled over things from who does the dishes to how often to have sex. Kelsey Hubbard speaks to WSJ Editor Paula Szuchman who has co-authored a new book called Spousonomics which uses economic theories to solve everyday marital conflict.

Milbank Sending Midlevel Associates to Harvard Law for Business Training

National Law Journal
February 11, 2011

Associates at Milbank, Tweed, Hadley & McCloy are heading to Harvard.

The firm has agreed with Harvard Law School to launch what it believes is a first-of-its-kind associate development program. Midlevel associates will attend annual eight-day training sessions focused on business principles at the Cambridge, Mass., campus.

The program is called Milbank@Harvard.

It's not uncommon for law firms to send attorneys through intensive executive training courses at top academies such as the Wharton School and the University of Pennsylvania, but those programs often are geared toward leadership development for partners. Milbank's program will be open to all third- through seventh-year associates.

"We don't know of anyone who is doing something like this," said Milbank Vice Chairman Scott Edelman. "For one thing, it's going to involve every associate in the firm and a commitment over a period of years. It's not a one-year program."

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Influential economists The contemporary Keynes

Economist
February 10, 2011

Dismal economies are often dismal for economists. Respected figures find themselves defending discredited theories or justifying why they failed to see trouble coming. But calamity can also clear paths for new ideas. The Depression was the backdrop for the work of John Maynard Keynes. The stagflationary 1970s vindicated Milton Friedman: a generation of liberalisation followed.

The Economist asked members of “Economics by invitation”, our online forum of more than 50 prominent economists, to nominate colleagues with the most important ideas for a post-crisis world. The respondents came up with nearly 20 different names. None won an absolute majority, but a few cropped up more often than others (see table).

First among them is Raghuram Rajan of the University of Chicago, whose book Fault Lines argues that rising inequality led governments to facilitate credit growth, contributing to the crisis. Robert Shiller of Yale University has long warned of the dangers of irrational exuberance, and urges colleagues to consider “animal spirits” in assessing economic fluctuations. Kenneth Rogoff’s work on debt bubbles with Carmen Reinhart placed the crisis in an 800-year continuum of borrowing and collapse: his papers have earned the most academic citations of the table-toppers in our poll. Barry Eichengreen has written excellent works on the history of the gold standard and the danger of fixed-exchange-rate regimes. Nouriel Roubini earned the nickname “Dr Doom” for warning of an impending global crash.

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9+ 1 Μύθοι για τη Θεωρία της Ορθολογικής Επιλογής

Διάλεξη Αριστείδη Χατζή

Πανεπιστήμιο Αθηνών
Τμήμα ΜΙΘΕ
4 Φεβρουαρίου 2011

Στο πρώτο video θα βρείτε την διάλεξη (λείπουν τα πρώτα 12 λεπτά) και στο δεύτερο την συζήτηση που ακολούθησε.





Περισσότερα

The Poverty of Dictatorship

by Dani Rodrik

Project Syndicate
February 9, 2011

Perhaps the most striking finding in the United Nations’ recent 20th anniversary Human Development Report is the outstanding performance of the Muslim countries of the Middle East and North Africa. Here was Tunisia, ranked sixth among 135 countries in terms of improvement in its Human Development Index (HDI) over the previous four decades, ahead of Malaysia, Hong Kong, Mexico, and India. Not far behind was Egypt, ranked 14th.

The HDI is a measure of development that captures achievements in health and education alongside economic growth. Egypt and (especially) Tunisia did well enough on the growth front, but where they really shone was on these broader indicators. At 74, Tunisia’s life expectancy edges out Hungary’s and Estonia’s, countries that are more than twice as wealthy. Some 69% of Egypt’s children are in school, a ratio that matches much richer Malaysia’s. Clearly, these were states that did not fail in providing social services or distributing the benefits of economic growth widely.

Yet in the end it did not matter. The Tunisian and Egyptian people were, to paraphrase Howard Beale, mad as hell at their governments, and they were not going to take it anymore. If Tunisia’s Zine El Abidine Ben Ali or Egypt’s Hosni Mubarak were hoping for political popularity as a reward for economic gains, they must have been sorely disappointed.

One lesson of the Arab annus mirabilis, then, is that good economics need not always mean good politics; the two can part ways for quite some time. It is true that the world’s wealthy countries are almost all democracies. But democratic politics is neither a necessary nor a sufficient condition for economic development over a period of several decades.

Despite the economic advances they registered, Tunisia, Egypt, and many other Middle Eastern countries remained authoritarian countries ruled by a narrow group of cronies, with corruption, clientelism, and nepotism running rife. These countries’ rankings on political freedoms and corruption stand in glaring contrast to their rankings on development indicators.

In Tunisia, Freedom House reported prior to the Jasmine revolution, “the authorities continued to harass, arrest, and imprison journalists and bloggers, human rights activists, and political opponents of the government.” The Egyptian government was ranked 111th out of 180 countries in Transparency International’s 2009 survey of corruption.

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The Politics of Revolutionary Surprise

by Timur Kuran

Project Syndicate
February 8, 2011

In setting himself ablaze following a humiliating encounter with the police, the university-educated Tunisian vegetable seller Mohamed Bouazizi triggered a wave of protests across the Arab world. Several Arab dictators who had held power for decades have already been ousted or forced to announce that they will retire.

But protesters in Cairo, Tunis, and Sana want much more. They also seek efficient governance, economic reforms to stimulate growth, the ouster of collaborators, democratic rights, freedom of religion (and perhaps also from religion) – in short, a comprehensive social transformation.

Everywhere, incumbent regimes have mounted resistance. The unforgettable scene of camel- and horse-riding Mubarak supporters beating tech-savvy Egyptian protesters signals that the old order will not yield without a fight.

The revolts themselves caught seasoned observers, even Arab leaders, off guard. Had the United States known what lay ahead, Secretary of State Hillary Clinton would not have remarked, after demonstrations broke out in Egypt, that the Egyptian government was “stable.” Arab leaders now showering their key constituencies with pay raises and food subsidies would have done so earlier, thus avoiding the impression of vulnerability.

Longtime regime opponents, too, were caught off guard. For days after Egypt erupted, the Muslim Brotherhood did not know how to react, making it seem out of touch with the “Arab street.”

For decades, most Arabs, however unhappy, kept their political grievances private, for fear of persecution if they turned against their leaders publicly. Through private discussions with trusted friends, everyone sensed that discontent was common, yet no one knew, or could know, the extent of it.

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Παρουσίαση στο Βήμα

Η απατηλή λάμψη της ψευδοεπιστήμης

του Αριστείδη Χατζή

Vice Versa

Ιανουάριος 2011

Δεν είναι ψέμα, αν εσύ το πιστεύεις

George Costanza

Οι τρεις κυρίες που κάθονταν ακριβώς από πίσω μου στο θέατρο συζητούσαν στο διάλειμμα για τον συγγραφέα. Το έργο ήταν ο Θείος Βάνιας και ο συγγραφέας ο Άντον Τσέχωφ, ο οποίος, σύμφωνα με τη μία από τις κυρίες που φαινόταν να ξέρει πολλά, ήταν δημόσιος υπάλληλος. Η ίδια κυρία, με αφορμή τις γνώσεις της για τα επαγγελματικά του Τσέχωφ, συνέχισε να εντυπωσιάζει τις φίλες της κάνοντας μια σύντομη ανάλυση της σχέσης της τέχνης με την εργασία στο δημόσιο. Ο Τσέχωφ, όπως και οι υπόλοιποι λογοτέχνες-δημόσιοι υπάλληλοι, διοχέτευε στο έργο του την ανεκμετάλλευτη δημιουργικότητά του. Βέβαια, στην πραγματικότητα, ο Τσέχωφ ήταν γιατρός και αρκετά ευκατάστατος γαιοκτήμονας ώστε να προσφέρει δωρεάν τις υπηρεσίες του σε πολλές περιπτώσεις. Το πρόβλημα δεν είναι ότι η κυρία στην πίσω σειρά δεν το γνώριζε, το πρόβλημα είναι ότι κατασκεύασε μία ολόκληρη θεωρία για την ιστορία της λογοτεχνίας βασισμένη στις ελλιπείς της γνώσεις που όμως διέδιδε με μεγάλη αυτοπεποίθηση.

Στην περίφημη σκηνή του Νευρικού Εραστή (Annie Hall) του Γούντυ Άλλεν, ο πρωταγωνιστής (ο ίδιος ο Άλλεν) περιμένει σε μια μεγάλη ουρά μπροστά σε ένα κινηματογράφο μαζί με τη φίλη του (Νταϊάν Κίτον) και εκνευρίζεται καθώς αναγκάζεται να ακούει τις μπουρδολογίες για τον Φελίνι και τον Μπέκετ ενός τύπου που στέκεται ακριβώς από πίσω του στην ουρά: «Θα πάθω εγκεφαλικό!» λέει στην Κίτον. Ο τύπος όμως συνεχίζει τις μπαρουφο-αναλύσεις του για τον Μάρσαλ ΜακΛούαν μέχρι που ο Γούντυ αγανακτισμένος στρέφεται προς την κάμερα για να αναρωτηθεί τι θα πρέπει να κάνει όταν είναι αναγκασμένος να ανέχεται τις βλακείες κάποιου σε παρόμοιες περιστάσεις. Ο άλλος διαμαρτύρεται έντονα λέγοντας ότι έχει δικαίωμα να διατυπώνει την άποψή του και στο κάτω-κάτω διδάσκει ένα σχετικό μάθημα στο Πανεπιστήμιο Columbia και γνωρίζει πολύ καλά το έργο του ΜακΛούαν! «Α, ναι;» απαντάει ο Γούντυ, «ωραία, γιατί τυχαίνει να έχω εδώ τον ίδιο τον ΜακΛούαν!» Φυσικά εμφανίζεται ο ΜακΛούαν στην οθόνη και εξευτελίζει τον τύπο: «Δεν έχεις ιδέα για το έργο μου! Είναι εντυπωσιακό και μόνο το γεγονός ότι σε προσέλαβαν να διδάξεις οτιδήποτε..». Ο Γούντυ ξαναστρέφεται στην κάμερα και μονολογεί: «Μακάρι και η πραγματική ζωή να ήταν έτσι..»

Όμως η πραγματική ζωή δεν είναι έτσι. Ο Τσέχωφ δεν εμφανίστηκε στην κεντρική αίθουσα του Εθνικού Θεάτρου και η κυρία στην πίσω σειρά συνέχισε τη γεμάτη ανακρίβειες ανάλυσή της απολαμβάνοντας τον ανυπόκριτο θαυμασμό των άλλων κυριών που μάλλον αποστήθιζαν τη διάλεξη για να την μεταφέρουν στο δικό τους περιβάλλον με το ανάλογο τελετουργικό ύφος εγκυρότητας.

Όλοι κάνουμε λάθη και ο συγγραφέας αυτού του κειμένου έχει σίγουρα το μερίδιό του στα σφάλματα. Υποθέτω ότι θα συνεχίζω να κάνω λάθη και ελπίζω ότι θα βρίσκεται πάντα κάποιος ή κάποια να μου τα επισημαίνει.

Όμως το πρόβλημα δεν είναι το απλό λάθος που οποιοσδήποτε μπορεί να κάνει αλλά το σοβαρό σφάλμα που μπορεί να διαπράξει εξαιτίας μιας ψευδοεπιστημονικής πλάνης. Είναι απαράδεκτο το 2011, στη δεύτερη δεκαετία του 21ου αιώνα να είναι τόσο δημοφιλείς στην Ελλάδα απόψεις που ταιριάζουν στο μεσαίωνα. Είναι αδιανόητο να περιτριγυρίζεσαι από θρησκείες και κινήματα που δεν τις έχει αγγίξει ο διαφωτισμός. Είναι σουρεαλιστικό να ακούς θεωρίες συνομωσίας που είναι τόσο ευφάνταστες και ταυτολογικές όσο λίγες ταινίες επιστημονικής φαντασίας. Είναι ανατριχιαστικό να ακούς νέους ανθρώπους να απορρίπτουν την επιστήμη και να υπερασπίζονται τον τσαρλατανισμό. Είναι τραγικό να βλέπεις πόσο αδύναμη είναι πολλές φορές η γνώση απέναντι στην αυτοπεποίθηση της κτηνώδους άγνοιας.

Όποια ώρα κι αν ανοίξεις την τηλεόραση, όπου κι αν ψάξεις στο internet, όποια εφημερίδα κι αν διαβάσεις, θα πέσεις πάνω στους έμπορους της άγνοιας. Σε εκείνους δηλαδή που επιβιώνουν και ενίοτε πλουτίζουν, εκμεταλλευόμενοι την άγνοια αυτών που τους εμπιστεύονται και βασιζόμενοι στις ελλιπείς γνώσεις που έχουν οι περισσότεροι για διάφορα ζητήματα (ιστορία, διεθνής πολιτική, οικονομικά, κλπ.). Καθώς είναι αρκετά δύσκολο να επενδύσει κάποιος στη συγκέντρωση των απαραίτητων πληροφοριών και να επιλέξει τις αξιόπιστες πηγές, γιατί δεν διαθέτει το χρόνο και τα απαραίτητα εργαλεία για να το κάνει, αναζητά κάτι απλό και εύπεπτο. Κάτι που να τον κάνει να αισθάνεται ειδήμων και έξυπνος με την ελάχιστη δυνατή προσπάθεια και το μικρότερο κόστος. Επιπλέον είναι παρηγορητικό να διαβάζεις θεωρίες συνωμοσίας, με καλούς, κακούς, ισχυρούς, αδύνατους, αδικημένους και δολοπλόκους. Η γοητεία αυτών των αφηγήσεων έγκειται στην απλοϊκότητά τους όσον αφορά στη δόμηση ενός κόσμου που μπορεί να κατανοηθεί από όσους δεν μπορούν να αντιληφθούν ή να ανεχθούν την πολυπλοκότητα.

Δόξα τω θεώ υπάρχουν αρκετοί επιτήδειοι που κάνουν ακριβώς αυτό: πουλάνε την επίφαση της γνώσης και ζουν εκμεταλλευόμενοι την άγνοια. Αντί να σπουδάσεις ιστορία για 4-5 χρόνια και να διαβάσεις 100-150 εγχειρίδια για να αποκτήσεις τις βασικές απλώς γνώσεις σε ένα τεράστιο αντικείμενο, βλέπεις το Zeitgeist και τα μαθαίνεις όλα αυτά σε λίγα λεπτά – ανήκεις μάλιστα σε μια «επίλεκτη» ομάδα ανθρώπων που γνωρίζουν πολύ περισσότερα από τους υπόλοιπους που μελετάνε τη «συμβατική ιστορία» («οι βλάκες!») χάνοντας τον χρόνο τους.

Αντί να καθίσεις να μελετήσεις οικονομικά (ένα πολύ δύσκολο και τεχνικό αντικείμενο), βλέπεις την ταινία του Michael Moore ή ένα κλιπάκι της συμφοράς στο internet και έχεις καταλάβει πώς λειτουργεί ο παγκόσμιος καπιταλισμός, ποιος κατευθύνει την παγκοσμιοποίηση και ποιος παγίδεψε την Ελλάδα στο σατανικό σχέδιο του μνημονίου. Αντί να αντιμετωπίσεις τα πραγματικά προβλήματα με αποτελεσματικά μέσα αναζητάς τον Dr. Evil.

Δυστυχώς ή ευτυχώς για την κατάκτηση της γνώσης υπάρχει ένας μόνο δρόμος, κι αυτός είναι ο δύσκολος δρόμος που προσφέρει η επιστήμη. Οποιαδήποτε άλλη προσπάθεια να κατανοήσεις τον κόσμο με άλλα εργαλεία είναι το αντίστοιχο του να προσπαθήσεις να μάθεις αστρονομία διαβάζοντας το ωροσκόπιο στην εφημερίδα.

Όμως η άγνοια δεν είναι προνόμιο αυτών που δεν είχαν την τύχη να συναντηθούν με την επιστήμη, ούτε η γνώση συνδέεται απαραίτητα με τα τυπικά πτυχία αλλά περισσότερο με την ουσιαστική ικανότητα να διακρίνεις τους έγκυρους τρόπους απόκτησης της γνώσης. Η ικανότητα αυτή όμως αποκτάται μετά από χρονοβόρα και ιδιαίτερα απαιτητική επένδυση σε ανθρώπινο κεφάλαιο.

Η ψευδαίσθηση της γνώσης δεν περιορίζεται στο πνευματικό προλεταριάτο. Πρόσφατα διάβασα τρία διαφορετικά κείμενα καθηγητών Νομικής για την οικονομική κρίση. Οι τρεις αυτοί συγγραφείς είναι καλοί νομικοί, διακεκριμένοι στον τομέα τους και με πολλά χρόνια σπουδών. Όμως αποφάσισαν να ασχοληθούν με ένα οικονομικό φαινόμενο και να ασκήσουν κριτική στην οικονομική πολιτική της κυβέρνησης (καθόλα θεμιτό καθώς η πολιτική αυτή σηκώνει πολλή κριτική). Όμως διαβάζοντας τις αναλύσεις και τα επιχειρήματά τους, ακόμα και ένας πρωτοετής φοιτητής οικονομικού τμήματος θα εντόπιζε με μεγάλη ευκολία τα λάθη και τις ανακολουθίες. Γιατί όμως ένας σοβαρός επιστήμονας να ασχοληθεί με κάτι που δεν γνωρίζει ή μάλλον γιατί να νομίζει ότι γνωρίζει κάτι για το οποίο δεν έχει προφανώς ιδέα; Στη θεωρία του δικαίου το φαινόμενο αυτό ονομάζεται νομικός φορμαλισμός: η ψευδαίσθηση που έχουν πολλοί νομικοί ότι σε όλα τα ερωτήματα αρκούν για την απάντηση τα αναλυτικά εργαλεία και οι έννοιες της νομικής επιστήμης – οι άλλες επιστήμες είναι περιττές.

Ο νομικός φορμαλισμός δεν περιορίζεται στην άγνοια των οικονομικών. Εκτός από τους νομικούς που εκφράζουν μερκαντιλιστικές απόψεις του 16ου αιώνα στα άρθρα τους, έχουμε και τους νομικούς που ασχολούνται με τη φύση του γενετικού υλικού (είναι «πράγμα» ή «στοιχείο της προσωπικότητας») θεωρώντας απόλυτα φυσικό να μην κάνουν καμία αναφορά σε θεωρίες βιοηθικής και κυρίως τους νομικούς που ασχολούνται με τη ρύθμιση μιας κοινωνίας που δεν γνωρίζουν, γιατί δεν θεωρούν απαραίτητο να χρησιμοποιήσουν τα εργαλεία των εμπειρικών κοινωνικών επιστημών για να την κατανοήσουν. Φυσικά δεν είναι μόνο νομικοί αυτοί που διακρίνονται για την επίδειξη της αυτάρεσκης ημιμάθειάς τους αλλά και πολλοί άλλοι. Η καλή γνώση μιας επιστήμης δεν σου δίνει αυτόματα την αυθεντία και σε όλες τις άλλες.

Το πρόβλημα με τους διανοούμενους (με και χωρίς εισαγωγικά) που εκφράζουν δημόσια τις απόψεις τους είναι ότι δεν υπάρχει ένας εύκολος τρόπος να ελέγξει το κοινό την ποιότητά τους. Μπορούν να λένε ό,τι θέλουν. Από τον Michael Moore, τον Max Keiser, το Zeitgeist και τη Naomi Klein μέχρι τους εγχώριους μεταπράτες των θεωριών συνωμοσίας, τους αμόρφωτους δημοσιογράφους και τους διανοούμενους της συμφοράς, οι διαφορές είναι ελάχιστες. Η ομοιότητα όμως είναι μία και σημαντική: θα προωθήσουν τη δική τους ατζέντα σπεκουλάροντας στη δική μας άγνοια. Σε μια ελεύθερη κοινωνία δεν υπάρχει κανένας άλλος τρόπος να τους εμποδίσουμε παρά μόνο η περισσότερη γνώση, η ευρύτερη πληροφόρηση και φυσικά η επιστήμη – το καλύτερο όπλο απέναντι στην πλάνη.



Ο Αριστείδης Χατζής είναι Επίκουρος Καθηγητής Φιλοσοφίας Δικαίου και Θεωρίας Θεσμών στο Τμήμα Μεθοδολογίας, Ιστορίας και Θεωρίας της Επιστήμης του Πανεπιστημίου Αθηνών. Θα διαβάσει με ενδιαφέρον τα σχόλιά σας που θα στείλετε εδώ. Μπορείτε να επισκεφτείτε την ιστοσελίδα του για περισσότερα. Τη σκηνή από το Νευρικό Εραστή θα τη βρείτε εδώ. Περισσότερα και πολύ ενδιαφέροντα για το θέμα θα διαβάσετε στο εξαιρετικό άρθρο του Michael Shermer στο Scientific American και ειδικά για το Zeitgeist σ’ αυτό το κείμενο από το Skeptic Magazine. Στο Skeptic Magazine γράφουν μερικοί από τους μεγαλύτερες επιστήμονες διεθνώς με σκοπό να απαξιώνουν τις εκάστοτε ψευδοεπιστημονικές αντιλήψεις. Τέλος, αρκετοί έλληνες νομικοί γνωρίζουν πολύ καλά οικονομικά. Σας συστήνω ενδεικτικά τα κείμενα των Πέτρου Γέμτου, Παναγιώτη Γκλαβίνη, Γιώργου Δελλή, Αντώνη Καραμπατζού και Ιωάννη Ληξουριώτη.

Εδώ θα βρείτε το δημοσιευμένο κείμενο σε PDF

Εδώ θα βρείτε ένα άρθρο μου για τις θεωρίες συνωμοσίας

Εδώ θα βρείτε ένα κείμενό μου για το Δόγμα του Σοκ

Obama’s Cost-Benefit Revolution

by Eric A. Posner

New Republic
January 22, 2011

Tuesday, the president issued a new executive order on cost-benefit analysis and regulation. Already, the right has denounced it as a paean to collectivism and the left has declared that Obama has sold out to business groups. In fact, both sides are incorrect. The surprising reality is that cost-benefit analysis, as it will likely be practiced under the Obama administration, is not nearly as threatening as its detractors suggest. Then again, neither is it as revolutionary as its supporters like to imagine.

Long ago, cost-benefit analysis was a rallying cry for conservatives. It was brought to government by none other than Ronald Reagan, in Executive Order 12291 of 1981. Reagan was riding the wave of the deregulatory movement, which held that regulation of industry was excessive and stunted economic growth. His order stipulated that agencies should issue regulations only after finding that the benefits exceeded the costs.

Outraged liberals charged that cost-benefit analysis was a pretext to stifle regulation, and that it was arbitrary because of the difficulty of attaching dollar values to lives, environmental goods, and other regulatory benefits. Conservatives replied that cost-benefit analysis blocks bad regulations: Why would one support a regulation that produces higher costs than benefits? At the time, the alternative was regulation that seemed to reflect no more than the instincts of bureaucrats (or the agendas of interest groups), accompanied by impenetrable bureaucratese. The debate continued in this vein for decades, but over time, positions shifted. Some liberals came to see cost-benefit analysis as a good-government tool that promotes transparency and accountability, while some conservatives began to wonder whether it confers legitimacy on the New Deal state.

In that vein, President Clinton renewed Reagan’s executive order in 1993, albeit in slightly modified form. And for the last two years, observers have been wondering whether Obama would follow Clinton’s path: The president appointed some defenders of cost-benefit analysis to high administrative posts, such as Cass Sunstein, the head of the Office of Information and Regulatory Affairs, which oversees regulation. But he also hired critics of cost-benefit analysis and installed them in the EPA and other posts.

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Regulation versus Litigation: Perspectives from Economics and Law

The efficacy of various political institutions is the subject of intense debate between proponents of broad legislative standards enforced through litigation and those who prefer regulation by administrative agencies. This book explores the trade-offs between litigation and regulation, the circumstances in which one approach may outperform the other, and the principles that affect the choice between addressing particular economic activities with one system or the other. Combining theoretical analysis with empirical investigation in a range of industries, including public health, financial markets, medical care, and workplace safety, Regulation versus Litigation sheds light on the costs and benefits of two important instruments of economic policy.

More and More

Toward a 21st-Century Regulatory System

by Barack Obama

Wall Street Journal
January 18, 2011

For two centuries, America's free market has not only been the source of dazzling ideas and path-breaking products, it has also been the greatest force for prosperity the world has ever known. That vibrant entrepreneurialism is the key to our continued global leadership and the success of our people.

But throughout our history, one of the reasons the free market has worked is that we have sought the proper balance. We have preserved freedom of commerce while applying those rules and regulations necessary to protect the public against threats to our health and safety and to safeguard people and businesses from abuse.

From child labor laws to the Clean Air Act to our most recent strictures against hidden fees and penalties by credit card companies, we have, from time to time, embraced common sense rules of the road that strengthen our country without unduly interfering with the pursuit of progress and the growth of our economy.

Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs. At other times, we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.

Over the past two years, the goal of my administration has been to strike the right balance. And today, I am signing an executive order that makes clear that this is the operating principle of our government.

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Read the Executive Order

Prof. Christine Jolls on the New Behavioural Law and Economics

Depth of the Kindness Hormone Appears to Know Some Bounds

New York Times
January 10, 2011

Oxytocin has been described as the hormone of love. This tiny chemical, released from the hypothalamus region of the brain, gives rat mothers the urge to nurse their pups, keeps male prairie voles monogamous and, even more remarkable, makes people trust each other more.

Yes, you knew there had to be a catch. As oxytocin comes into sharper focus, its social radius of action turns out to have definite limits. The love and trust it promotes are not toward the world in general, just toward a person’s in-group. Oxytocin turns out to be the hormone of the clan, not of universal brotherhood. Psychologists trying to specify its role have now concluded it is the agent of ethnocentrism.

A principal author of the new take on oxytocin is Carsten K. W. De Dreu, a psychologist at the University of Amsterdam. Reading the growing literature on the warm and cuddly effects of oxytocin, he decided on evolutionary principles that no one who placed unbounded trust in others could survive. Thus there must be limits on oxytocin’s ability to induce trust, he assumed, and he set out to define them.

In a report published last year in Science, based on experiments in which subjects distributed money, he and colleagues showed that doses of oxytocin made people more likely to favor the in-group at the expense of an out-group. With a new set of experiments in Tuesday’s issue of the Proceedings of the National Academy of Sciences, he has extended his study to ethnic attitudes, using Muslims and Germans as the out-groups for his subjects, Dutch college students.

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See the papers (1 and 2)

Ο αντιιμπεριαλισμός της συμφοράς

του Διονύση Γουσέτη

Athens Review of Books
Μάιος 2011


Naomi Klein, Το δόγμα του Σοκ. Η άνοδος του καπιταλισμού της καταστροφής, μτφρ. Άγγελος Φιλιππάτος, Α. Α. Λιβάνη, Αθήνα 2010, σελ. 718

Κατά έναν περίεργο τρόπο [οι Έλληνες], σώσατε το ΔΝΤ από τη χρεοκοπία

Ναόμι Κλάιν

1. Η μέθοδος εργασίας

Ο Έλληνας αναγνώστης θα καταλάβει καλύτερα τον τρόπο εργασίας της Καναδής δημοσιογράφου και ακτιβίστριας, με μεγάλη δράση στο κίνημα της αντιπαγκοσμιοποίησης, Ναόμι Κλάιν, αν διαβάσει τις απόψεις της για ένα θέμα που το ζει και το γνωρίζει: την κατάσταση στη χώρα μας. Ο Άγγελος Αθανασόπουλος της πήρε συνέντευξη πριν ακόμα κυκλοφορήσει το βιβλίο της στα ελληνικά, στην οποία η Ν. Κλάιν φανερώνει με πόσο δογματισμό και πόση επιπολαιότητα βλέπει και ερμηνεύει τα πολιτικά φαινόμενα. Μας βεβαιώνει χωρίς δισταγμό:

Παρακολουθώ από πολύ κοντά την ελληνική κρίση και φυσικά την παρέμβαση της τρόικας του ΔΝΤ, της Ευρωπαϊκής Ένωσης και της Ευρωπαϊκής Κεντρικής Τράπεζας. Αυτό που με εντυπωσίασε, ιδιαίτερα στην αρχή της κρίσης, ήταν ότι οι Έλληνες αντιστάθηκαν στα όσα πήγαιναν να τους επιβληθούν. Όταν μάλιστα και στις Ηνωμένες Πολιτείες είχαμε την κρίση με τις τράπεζες, επεσήμαινα το γεγονός αυτό σε αμερικανούς συνομιλητές μου. Κι ακόμη πιο αδίστακτα: Κατά έναν περίεργο τρόπο, σώσατε το ΔΝΤ από τη χρεοκοπία!

Αν η Ν. Κλάιν έκανε τον κόπο να δει τις δημοσκοπήσεις στη χώρα μας, ιδιαίτερα στην αρχή της κρίσης, θα διαπίστωνε ότι οι Έλληνες όχι μόνο δεν αντιστάθηκαν στην τρόικα, αλλά έδιναν σημαντικό προβάδισμα στο κόμμα που ενέταξε τη χώρα στον μηχανισμό στήριξης. Αλλά αυτή η διαπίστωση δεν ταιριάζει με την ιδεοληψία της και γι’ αυτό βολικά την αντιστρέφει. Τις θέσεις της αυτές η Ν. Κλάιν επαναλαμβάνει σε συνέντευξή της στο περιοδικό Επίκαιρα. Εκεί όμως κάνει μια προσθήκη συν μία αντίφαση. Η προσθήκη είναι ότι

Και στις δύο περιπτώσεις [Ελλάδα και Αργεντινή] έχουμε μια κρίση που δημιουργήθηκε με πλήρη συνέργεια του διεθνούς τραπεζικού συστήματος· …πιστεύω ότι είναι παρόμοιες καταστάσεις, καθώς η Αργεντινή είναι μια χώρα με μεσογειακή κουλτούρα

Προκειμένου να ενοχοποιήσει το διεθνές τραπεζικό σύστημα, η Κλάιν δεν διστάζει μπρος στην αλήθεια. Την αλήθεια για την Αργεντινή την είπε επανειλημμένα ο ίδιος ο κεντροαριστερός πρώην πρόεδρος της χώρας Φερνάντο Ντε Λα Ρούα, ακόμη και σε ελληνικό τηλεοπτικό σταθμό: η καταστροφή δεν προήλθε από το διεθνές τραπεζικό σύστημα, αλλά από την επιλογή της κυβέρνησής του να μειώσει τα ελλείμματα μέσω της αύξησης των εσόδων με την επιβολή καινούργιων και μεγάλων φορολογικών επιβαρύνσεων . Και για τη χώρα μας ομοίως η κρίση δεν δημιουργήθηκε με συνέργεια του διεθνούς τραπεζικού συστήματος. Δημιουργήθηκε από την καλοζωία με δανεικά.

Και η αντίφαση: η Ν. Κλάιν, αντίθετα με αυτά που δήλωσε στο Βήμα για την αντίσταση των Ελλήνων, τώρα δηλώνει:

Υπάρχει και μία διαφορά με την Αργεντινή: Εκεί υπήρχε μία προθυμία η χώρα να ορθώσει το ανάστημά της στο διεθνές χρηματοπιστωτικό σύστημα και στον εκφοβισμό του ΔΝΤ. Θεωρώ ότι, επειδή ο πληθυσμός κινητοποιήθηκε τόσο το 2001 και το 2002, απέρριψε τους πολιτικούς που δεν αντιστέκονταν στο ΔΝΤ.

Αυτός είναι γενικότερα ο τρόπος εργασίας της Ν. Κλάιν. Ψεύδη ή μισές αλήθειες ή περίπου αλήθειες, αυθαίρετα συμπεράσματα, μονομερείς απόψεις. Όλα αυτά για να υπηρετήσει έναν αρρωστημένα δογματικό αντιιμπεριαλισμό. Με αυτόν τον τρόπο είναι στημένο το πολυσέλιδο βιβλίο της.

Κατεβάστε ολόκληρο το άρθρο σε PDF

[υπάρχουν μικρές διαφορoποιήσεις με το τελικό κείμενο που δημοσιεύθηκε στο Athens Review of Books, τ. 18 (Μάιος 2011): σελ. 27-31]

Incentives Matter

by Russell Roberts

Econlib.org

June 5, 2006

Towards the end of the 18th century, England began sending convicts to Australia. The transportation was privately provided but publicly funded. A lot of convicts died along the way, from disease due to overcrowding, poor nutrition and little or no medical treatment. Between 1790 and 1792, 12% of the convicts died, to the dismay of many good-hearted English men and women who thought that banishment to Australia shouldn't be a death sentence. On one ship 37% perished.

How might captains be convinced to take better care of their human cargo?

You might lecture the captains on the cruelty of death, and the clergy from their pulpits did just that. You might increase the funds allotted by the state provided to the captains based on the number of passengers they carried. You might urge the captains to spend more of those funds for the care of their passengers. (Some entrepreneurial captains hoarded food and medicine meant for the convicts and sold them upon arrival in Australia.) You might urge the captains to spend the money more carefully. Shame them into better behavior.

But a different approach was tried. The government decided to pay the captains a bonus for each convict that walked off the boat in Australia alive.

This simple change worked like a charm. Mortality fell to virtually zero. In 1793, on the first three boats making the trip to Australia under the new set of incentives, a single convict died out of 322 transported, an amazing improvement.

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The Locavore's Dilemma: Why Pineapples Shouldn't Be Grown in North Dakota

by Jayson L. Lusk and F. Bailey Norwood

Econlib.org
January 3, 2011

Oklahoma's government, like those of 45 other states, funds a farm-to-school program encouraging cafeterias to buy their food from local sources. U.S. Representative Chellie Pingree (D-Maine) wants to help; she recently introduced the Eat Local Foods Act (HR 5806) to assist schools in providing local foods in school lunches. From Michelle Obama's White House garden to grants from the U.S. Department of Agriculture's "Know Your Farmer, Know Your Food" initiative, an agenda has emerged to give local foods more prominence on our dinner plates. Interestingly, no agricultural economist has informed the public that a key claim of local-food advocates—that local-food purchases enhance the local economy—violates the core economic principles taught in every introductory economics class. Until now.

A major flaw in the case for buying local is that it is at odds with the principle of comparative advantage. This principle, which economists have understood for almost 200 years, is one of the main reasons that the vast majority of economists believe in free trade. Free trade, whether across city, state, or national boundaries, causes people to produce the goods or services for which they have a comparative advantage and, thus, makes virtually everyone wealthier. Princeton University economist Paul Krugman, who won the Nobel Prize in economics for his contributions to the economics of international trade, called comparative advantage "Ricardo's Difficult Idea" because so many non-economists deny it and are unwilling to understand it. But if people understood comparative advantage, much of the impetus for buying local foods would disappear.

When the tomatoes are ripe and the price is right, we, the two authors, enjoy local food. In fact, we grow vegetables in our own backyards. But, according to some bestselling authors, daytime talk show hosts, celebrity chefs, and the U.S. government, we aren't growing and buying enough. These groups have offered a host of economic arguments to promote the sale of local food—arguments that are fundamentally wrong.

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Pregnant Taiwan women trying to delay labour for 2011 cash bonus

Earth Times
December 28, 2010

Many pregnant Taiwan women are trying to delay labour so that their births can coincide with a government bonus, a newspaper reported Wednesday.

According to the Liberty Times, two Taiwan cities - Taipei and New Taipei City - plan to give bonuses for babies born in 2011, to celebrate the centenary of the birth of the Republic of China (ROC), as Taiwan is formally known.

Under the programme, a baby born in 2011 can receive 20,000 Taiwan dollars (680 US dollars) if one parent is a citizen of Taipei or New Taipei City.

New Taipei City is a recently organized municipality with a 3.8 million population.

As the programme begins Saturday, the first day of 2011, many pregnant women in Taipei and New Taipei City want to delay their births until Saturday or later.

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Making It Clear That a Clear Parking Space Isn’t

New York Times
December 28, 2010

By dawn on Tuesday, the space savers were out in abundance on East Seventh Street in South Boston. Someone had staked out a neatly shoveled parking spot with a potted plant, its dead fronds trembling in the wind. Someone else had reserved a space with a hot-pink beach chair.

Elsewhere in the neighborhood, the epicenter of the parking wars that erupt here after a snowstorm, the narrow streets were lined with bar stools and coolers, end tables and shopping carts, all meant as warnings: This shoveled-out space is mine until the snow melts. Occupy it at your own risk.

Marguerite Maguire, who had an orange parking cone ready to guard her spot, was hoping to avoid the kind of confrontation she got into after a 2009 snowfall, when someone tried taking her space the minute she finished clearing it.

“I told her, ‘Forget it, lady,’ and we yelled at each other for a few minutes until she pulled away,” Mrs. Maguire, 50, recalled. “I think she must have been new here.”

Though not unique to Boston — Chicago, Philadelphia and Pittsburgh are among the other cities that embrace it — space-saving after snowstorms has an impassioned history here, especially in scrappy, densely populated South Boston. When snow puts parking spots at a premium, as the blizzard that just left 18 inches of snow here did, snatching someone’s marked space can lead to hurled insults, slashed tires or worse — in 2005, a man was arrested after smashing a car window with a plunger during an argument over a freshly shoveled spot.

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Coase’s 100th Birthday: No More “Externalities”

by Terry Anderson

Percolator
December 29, 2010

Today, the great economist and Nobel laureate Ronald Coase will celebrate his 100th birthday. Coase’s work has revolutionized the way economists view resource conflicts. His paper “The Problem of Social Cost” challenged the widely-accepted work of Arthur C. Pigou on externalities and inspired a whole new way of thinking about environmental issues.

Unlike the Pigouvian approach, which claimed that market failure could be corrected by taxes, subsidies, and regulations, Coase taught us to view these issues in light of property rights and markets. In short, Coase taught against the use of the word “externality.”

For several years, I have been on a campaign to expunge the term “externality” from the vocabulary of economists, policy makers, and environmentalists. My campaign is not motivated by a belief that markets perfectly account for all costs and benefits. Rather it is driven by the lessons learned from entrepreneurs—the people with a passion for solving problems by finding win-win solutions. Entrepreneurs thrive in the space where there are impacts not accounted for in market transactions. It is in that space that they create gains from trade.

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The Social Function of Futures Markets

by Robert P. Murphy

Mises Daily
November 29, 2006

In a previous article, I described the "social function" of stock speculators. In the present piece, we'll explore the role of healthy futures and forward markets in a modern economy. Of course, both parties to any voluntary exchange expect to benefit, at least ex ante — otherwise the exchange wouldn't be voluntary. But beyond this truism, it is at first unclear how anything is added when intelligent workers are sucked out of other occupations and devote their careers to trading "futures contracts." After all, these intangible financial instruments can't be eaten or used to build a house, so what good are they? The present article seeks to answer just this question.

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The Social Function of Stock Speculators

by Robert P. Murphy

Mises Daily
November 22, 2006

Libertarian economists typically adopt a two-pronged approach in their advocacy of free markets. On the one hand, they stress that people have rights (whether God-given or self-evident from the exercise of reason) and therefore should be able to engage in any voluntary activities with each other, free from political interference. Unfortunately, this appeal to principle is never enough, since the type of person who votes for today's politicians doesn't care much about abstractions.

This leads to the second prong of the argument: The use of economic science to demonstrate unnoticed and often counterintuitive benefits from activities that the common man despises. For example, after pointing out that the government has no business sticking its nose into capitalist actions between consenting landlords and renters, the libertarian might use economic theory to illustrate the disastrous effects of rent control. After all, the right to property is (rightly or wrongly) easier to appreciate when populist violations of it lead to housing shortages.

It is in this spirit that I offer the present essay, an examination of the social benefits of stock speculators. Now when it comes to different ways of making a living, stock speculation certainly wouldn't make the Top Ten Most Altruistic among Oprah Winfrey viewers. Indeed, even among people who think that middlemen perform vital services in tangible commodities — such as buying oranges low in Florida, and selling them high in Alaska — there seems to be something artificial about transactions involving nothing more than electronic swapping of shares to corporations. Even among people who ought to know better, there is a presumption that stock speculation is a zero-sum game, and that if one person buys low and sells high, his gain only comes at the expense of someone else, leaving society on net exactly the same.

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Elena Panaritis ον Property Rights and Building Trust

TEDxAthens
December 23, 2010

Elena Panaritis at TEDxAthens 2010, in Athens, Greece, gives a great talk on property rights.

Teen birth rate hits record low

Washington Post
December 21, 2010

As the nation continued to struggle in the recession in 2009, the rate at which U.S. women are having babies continued to fall, pushing the teen birth rate to a record low, federal officials reported Tuesday.

The birth rate among U.S. girls aged 15 to 19 fell to 39.1 births per 1,000 teens in 2009, the most recent year for which statistics are available. That's a 6 percent drop from 2008 and the lowest rate ever recorded in the nearly 70 years that the federal government has been collecting reliable data, according to a preliminary analysis of data from the National Center for Health Statistics.

"The decline in teen births is really quite amazing," said Brady E. Hamilton, who helped perform the analysis.

The drop marked the second year in a row the birth rate among teens fell, meaning it has dropped for 16 out of the past 18 years. The 8 percent two-year decline strengthens the belief that a two-year increase during the preceding two years was an aberration.

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Homes at Risk, and No Help From Lawyers

New York Times
December 20, 2010

In California, where foreclosures are more abundant than in any other state, homeowners trying to win a loan modification have always had a tough time.

Now they face yet another obstacle: hiring a lawyer.

Sharon Bell, a retiree who lives in Laguna Niguel, southeast of Los Angeles, needs a modification to keep her home. She says she is scared of her bank and its plentiful resources, so much so that she cannot even open its certified letters inquiring where her mortgage payments may be. Yet the half-dozen lawyers she has called have refused to represent her.

“They said they couldn’t help,” said Ms. Bell, 63. “But I’ve got to find help, because I’m dying every day.”

Lawyers throughout California say they have no choice but to reject clients like Ms. Bell because of a new state law that sharply restricts how they can be paid. Under the measure, passed overwhelmingly by the State Legislature and backed by the state bar association, lawyers who work on loan modifications cannot receive any money until the work is complete. The bar association says that under the law, clients cannot put retainers in trust accounts.

The law, which has few parallels in other states, was devised to eliminate swindles in which modification firms made promises about what their lawyers could do, charged hefty fees and then disappeared. But foreclosure specialists say there has been an unintended consequence: the honest lawyers can no longer afford to assist Ms. Bell and all the others who feel helpless before lenders that they see as elusive, unyielding and skilled at losing paperwork.

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Jonathan Macey, "Corporate Governance: Promises Kept, Promises Broken"

Even in the wake of the biggest financial crash of the postwar era, the United States continues to rely on Securities and Exchange Commission oversight and the Sarbanes-Oxley Act, which set tougher rules for boards, management, and public accounting firms to protect the interests of shareholders. Such reliance is badly misplaced. In Corporate Governance, Jonathan Macey argues that less government regulation--not more--is what's needed to ensure that managers of public companies keep their promises to investors.

Macey tells how heightened government oversight has put a stranglehold on what is the best protection against malfeasance by self-serving management: the market itself. Corporate governance, he shows, is about keeping promises to shareholders; failure to do so results in diminished investor confidence, which leads to capital flight and other dire economic consequences. Macey explains the relationship between corporate governance and the various market and nonmarket institutions and mechanisms used to control public corporations; he discusses how nonmarket corporate governance devices such as boards and whistle-blowers are highly susceptible to being co-opted by management and are generally guided more by self-interest and personal greed than by investor interests. In contrast, market-driven mechanisms such as trading and takeovers represent more reliable solutions to the problem of corporate governance. Inefficient regulations are increasingly hampering these important and truly effective corporate controls. Macey examines a variety of possible means of corporate governance, including shareholder voting, hedge funds, and private equity funds.

Corporate Governance reveals why the market is the best guardian of shareholder interests.

Jonathan R. Macey is the Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law at Yale Law School. He is the author of a number of books, including Macey on Corporation Laws.

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Why Do People Believe in Fantasies?

by John Stossel

Townhall.com
December 15, 2010

We human beings sure are gullible. Polls report that 27 percent of Americans believe in ghosts, and 25 percent in astrology. Others believe mediums, fortunetellers, faith healers and assorted magical phenomena.

I'd think the astrologers or the psychics or the ghost hunters would be eager to prove they were for real. Not only would they convince skeptics, they'd make a million dollars.

That's what James Randi, the magician, author and debunker of bogus claims, will pay anyone who can prove he or she actually has an ability that can't be explained by science.

"All people have to do is make a claim, come to us, fill out the form, arrange a protocol, and then we have somebody else do the test," Randi says. He won't do the test himself, he says, because when psychics failed in the past, they claimed that Randi put out "evil vibrations" to thwart their powers.

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The Inequality That Matters

by Tyler Cowen

American Interest
January - February 2011

Does growing wealth and income inequality in the United States presage the downfall of the American republic? Will we evolve into a new Gilded Age plutocracy, irrevocably split between the competing interests of rich and poor? Or is growing inequality a mere bump in the road, a statistical blip along the path to greater wealth for virtually every American? Or is income inequality partially desirable, reflecting the greater productivity of society’s stars?

There is plenty of speculation on these possibilities, but a lot of it has been aimed at elevating one political agenda over another rather than elevating our understanding. As a result, there’s more confusion about this issue than just about any other in contemporary American political discourse. The reality is that most of the worries about income inequality are bogus, but some are probably better grounded and even more serious than even many of their heralds realize. If our economic churn is bound to throw off political sparks, whether alarums about plutocracy or something else, we owe it to ourselves to seek out an accurate picture of what is really going on. Let’s start with the subset of worries about inequality that are significantly overblown.

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Louis Kaplow, "The Theory of Taxation and Public Economics"

The Theory of Taxation and Public Economics presents a unified conceptual framework for analyzing taxation--the first to be systematically developed in several decades. An original treatment of the subject rather than a textbook synthesis, the book contains new analysis that generates novel results, including some that overturn long-standing conventional wisdom. This fresh approach should change thinking, research, and teaching for decades to come.

Building on the work of James Mirrlees, Anthony Atkinson and Joseph Stiglitz, and subsequent researchers, and in the spirit of classics by A. C. Pigou, William Vickrey, and Richard Musgrave, this book steps back from particular lines of inquiry to consider the field as a whole, including the relationships among different fiscal instruments. Louis Kaplow puts forward a framework that makes it possible to rigorously examine both distributive and distortionary effects of particular policies despite their complex interactions with others. To do so, various reforms--ranging from commodity or estate and gift taxation to regulation and public goods provision--are combined with a distributively offsetting adjustment to the income tax. The resulting distribution-neutral reform package holds much constant while leaving in play the distinctive effects of the policy instrument under consideration. By applying this common methodology to disparate subjects, The Theory of Taxation and Public Economics produces significant cross-fertilization and yields solutions to previously intractable problems.

Louis Kaplow is the Finn M. W. Caspersen and Household International Professor of Law and Economics at Harvard, a research associate at the National Bureau of Economic Research, and a fellow of the American Academy of Arts and Sciences. He has published widely on the theory of taxation and public economics.

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Timur Kuran" The Long Divergence: How Islamic Law Held Back the Middle East"

In the year 1000, the economy of the Middle East was at least as advanced as that of Europe. But by 1800, the region had fallen dramatically behind--in living standards, technology, and economic institutions. In short, the Middle East had failed to modernize economically as the West surged ahead. What caused this long divergence? And why does the Middle East remain drastically underdeveloped compared to the West? In The Long Divergence, one of the world's leading experts on Islamic economic institutions and the economy of the Middle East provides a new answer to these long-debated questions.

Timur Kuran argues that what slowed the economic development of the Middle East was not colonialism or geography, still less Muslim attitudes or some incompatibility between Islam and capitalism. Rather, starting around the tenth century, Islamic legal institutions, which had benefitted the Middle Eastern economy in the early centuries of Islam, began to act as a drag on development by slowing or blocking the emergence of central features of modern economic life--including private capital accumulation, corporations, large-scale production, and impersonal exchange. By the nineteenth century, modern economic institutions began to be transplanted to the Middle East, but its economy has not caught up. And there is no quick fix today. Low trust, rampant corruption, and weak civil societies--all characteristic of the region's economies today and all legacies of its economic history--will take generations to overcome.

The Long Divergence opens up a frank and honest debate on a crucial issue that even some of the most ardent secularists in the Muslim world have hesitated to discuss.

Timur Kuran is professor of economics and political science and the Gorter Family Professor of Islamic Studies at Duke University. He is the author of Islam and Mammon: The Economic Predicaments of Islamism (Princeton).

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Taking Sides in a Divorce, Chasing Profit

New York Times
December 4, 2010

Michelle Pont and her husband amassed millions of dollars in properties and investments from a freight-hauling business that they started with a single stake-bed truck in 1991. They bought a four-bedroom home, then a second home, a vacation home, a motor home and half a dozen cars.

But when Ms. Pont decided to seek a divorce last year, she quickly ran out of money. She had no job. Her husband controlled the family’s investments. A few months of legal bills maxed out her credit cards and drained her retirement account.

She wrestled with accepting a smaller settlement than she considered fair. Then a lawyer referred her to Balance Point Divorce Funding, a new Beverly Hills lender that offers to cover the cost of breaking up — paying a lawyer, searching for hidden assets, maintaining a lifestyle — in exchange for a share of the winnings.

In October, Balance Point agreed to invest more than $200,000 in Ms. Pont’s case.

“It’s given me hope,” Ms. Pont said. “I don’t view it as a loan; I view it as an investment in my future. They are helping me to get what is rightfully mine.”

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Stacey Napp is the founder of Balance Point Divorce Funding