Mainly limited by the fact that it took me four days to get around to posting this:
"The Invention of Money" from This American Life
Thursday, January 13, 2011
More thoughts on fluoride and lithium
Yesterday, Joseph posted his reaction to the possibility (discussed by Mike Moffatt at Worthwhile Canadian Initiative) of adding lithium to the municipal water supply of cities with low naturally occurring lithium levels. Joseph made some good points but I'd like to go a bit further, starting with the way the original question was stated:
How Much Would You Be Willing to Pay to Reduce Murders by 30%?
I don't have a problem with assigning a dollar value to a life when discussing policy (there's generally no alternative), but I think this is the wrong way of framing the problem for a number of reasons. We are talking about getting a drug to the relatively small portion of the population that needs it by giving it to everybody. There are other options for getting lithium to the people who need it. The water supply approach has the advantage of missing fewer people though not all (I suspect this will make some people, particularly the paranoid, switch to bottled water), but it comes with other concerns.
The obvious comparison here is with fluoride, a comparison that Moffatt himself makes here:
First, tooth decay affects most people and virtually all children (whose health society has a responsibility to protect). There was no other practical way to get this treatment to everyone who needed it. Relatively few people need lithium treatment. As mentioned before, there may be other options for getting treatment to those people.
From an ethical standpoint, we are talking about exposing the majority of the population to a heightened level of a chemical that treats a condition that they don't have. This doesn't mean that adding lithium is a bad idea, but it is certainly possible to make an ethical case for fluoride that doesn't hold for lithium.
Add to that the concerns, noted by Joseph, over adding a mind-altering substance to a city's water supply. On the practical side, there have to be unexpected consequences (even with fluoride, there were enough minor side effects to reduce the level used). On the ethical side, you're adding a mind-altering substance to a city's water supply.
I don't know whether we should consider manipulating lithium levels, but I'm pretty sure we should start by acknowledging the complexity of the problem and taking a good look at the alternatives. Though much beloved by economists, this is one situation where "how much would you pay to..." is not going to cut it.
How Much Would You Be Willing to Pay to Reduce Murders by 30%?
I don't have a problem with assigning a dollar value to a life when discussing policy (there's generally no alternative), but I think this is the wrong way of framing the problem for a number of reasons. We are talking about getting a drug to the relatively small portion of the population that needs it by giving it to everybody. There are other options for getting lithium to the people who need it. The water supply approach has the advantage of missing fewer people though not all (I suspect this will make some people, particularly the paranoid, switch to bottled water), but it comes with other concerns.
The obvious comparison here is with fluoride, a comparison that Moffatt himself makes here:
Will it work? I don't know. It seems like it would be worthy a pilot study or two. Although those levels of elemental lithium are believed to be safe, there may be side-effects we are not considering. There are ethical considerations as well, but it is hard to make a case that adding fluoride to the water supply is ethical but lithium is not - and we've been adding fluoride to drinking water for over half a century.But there are at least two important differences between lithium and fluoride, and both differences have practical and ethical considerations.
First, tooth decay affects most people and virtually all children (whose health society has a responsibility to protect). There was no other practical way to get this treatment to everyone who needed it. Relatively few people need lithium treatment. As mentioned before, there may be other options for getting treatment to those people.
From an ethical standpoint, we are talking about exposing the majority of the population to a heightened level of a chemical that treats a condition that they don't have. This doesn't mean that adding lithium is a bad idea, but it is certainly possible to make an ethical case for fluoride that doesn't hold for lithium.
Add to that the concerns, noted by Joseph, over adding a mind-altering substance to a city's water supply. On the practical side, there have to be unexpected consequences (even with fluoride, there were enough minor side effects to reduce the level used). On the ethical side, you're adding a mind-altering substance to a city's water supply.
I don't know whether we should consider manipulating lithium levels, but I'm pretty sure we should start by acknowledging the complexity of the problem and taking a good look at the alternatives. Though much beloved by economists, this is one situation where "how much would you pay to..." is not going to cut it.
The middle of January and already in reruns -- Alice in Lawyerland
This post from Matt Yglesias on intellectual property (with additional comments by Joseph here), got me thinking about this post from a few months ago. I apologize for repeating myself, but this is one of my favorite examples of copyright hypocrisy:
Alice in Lawyerland: would the laws Disney lobbied for have prevented Disney from existing in the first place?
(disclaimer: I have cashed a number of royalties checks over the years so the following is obviously not an attack on the concept of intellectual property. I like royalty checks. I'm just worried about the consequences of taking these things to an extreme.)
In 1998, the Walt Disney company had a problem: their company mascot was turning 70. Mickey Mouse had debuted in 1928's "Mickey Mouse In Plane Crazy" which meant that unless something was done, Mickey would enter the public domain within a decade. This was a job for lobbyists, lots of lobbyists.
From Wikipedia:
Mickey had been Disney's biggest hit but he wasn't their first. The studio had established itself with a series of comedies in the early Twenties about a live-action little girl named Alice who found herself in an animated wonderland. In case anyone missed the connection, the debut was actually called "Alice's Wonderland." The Alice Comedies were the series that allowed Disney to leave Kansas and set up his Hollywood studio.
For context, Lewis Carroll published the Alice books, Wonderland and Through the Looking Glass, in 1865 and 1871 and died in 1898. Even under the law that preceded the Mouse Protection Act, Alice would have been the property of Carroll's estate and "Alice's Wonderland" was a far more clear-cut example of infringement than were many of the cases Disney has pursued over the years.
In other words, if present laws and attitudes about intellectual property had been around in the Twenties, the company that lobbied hardest for them might never have existed.
There's nothing unusual about a small company or start-up exploiting lapsed or unenforced copyrights to get a foothold. The public domain has long been fertile ground for stage companies, record companies, publishers, and producers of movies or radio and television; it's just been getting a lot less fertile lately.
Alice in Lawyerland: would the laws Disney lobbied for have prevented Disney from existing in the first place?
(disclaimer: I have cashed a number of royalties checks over the years so the following is obviously not an attack on the concept of intellectual property. I like royalty checks. I'm just worried about the consequences of taking these things to an extreme.)
In 1998, the Walt Disney company had a problem: their company mascot was turning 70. Mickey Mouse had debuted in 1928's "Mickey Mouse In Plane Crazy" which meant that unless something was done, Mickey would enter the public domain within a decade. This was a job for lobbyists, lots of lobbyists.
From Wikipedia:
The Copyright Term Extension Act (CTEA) of 1998 extended copyright terms in the United States by 20 years. Since the Copyright Act of 1976, copyright would last for the life of the author plus 50 years, or 75 years for a work of corporate authorship. The Act extended these terms to life of the author plus 70 years and for works of corporate authorship to 120 years after creation or 95 years after publication, whichever endpoint is earlier. Copyright protection for works published prior to January 1, 1978, was increased by 20 years to a total of 95 years from their publication date.
This law, also known as the Sonny Bono Copyright Term Extension Act, Sonny Bono Act, or pejoratively as the Mickey Mouse Protection Act,[2] effectively "froze" the advancement date of the public domain in the United States for works covered by the older fixed term copyright rules. Under this Act, additional works made in 1923 or afterwards that were still copyrighted in 1998 will not enter the public domain until 2019 or afterward (depending on the date of the product) unless the owner of the copyright releases them into the public domain prior to that or if the copyright gets extended again. Unlike copyright extension legislation in the European Union, the Sonny Bono Act did not revive copyrights that had already expired. The Act did extend the terms of protection set for works that were already copyrighted, and is retroactive in that sense.
Mickey had been Disney's biggest hit but he wasn't their first. The studio had established itself with a series of comedies in the early Twenties about a live-action little girl named Alice who found herself in an animated wonderland. In case anyone missed the connection, the debut was actually called "Alice's Wonderland." The Alice Comedies were the series that allowed Disney to leave Kansas and set up his Hollywood studio.
For context, Lewis Carroll published the Alice books, Wonderland and Through the Looking Glass, in 1865 and 1871 and died in 1898. Even under the law that preceded the Mouse Protection Act, Alice would have been the property of Carroll's estate and "Alice's Wonderland" was a far more clear-cut example of infringement than were many of the cases Disney has pursued over the years.
In other words, if present laws and attitudes about intellectual property had been around in the Twenties, the company that lobbied hardest for them might never have existed.
There's nothing unusual about a small company or start-up exploiting lapsed or unenforced copyrights to get a foothold. The public domain has long been fertile ground for stage companies, record companies, publishers, and producers of movies or radio and television; it's just been getting a lot less fertile lately.
Wednesday, January 12, 2011
More on Just Desserts
Matt Yglesias has a very good point:
I think that this is a very astute point; the structure of modern intellectual property laws have made the creation of these goods very lucrative. But linking success to morality is a very tough proposition because most people who are very successful are going to benefit from favorable regulation (because in places where regulation is unfavorable, it ia harder to be a success).
Consider this small businessman in California (who has discovered that there is a tax for have retail hand scanners):
The merits of one specific tax may or may not be justified. But people can work hard at a socially productive activity and still end up with a marginal income due to the choices we make on how to tax and regulate business activity. We may have chosen the optimal levels of these things (anything is possible) but ascribing moral superiority to classes of people who manage to obtain favorable regulatory treatment does not appear to be ideal.
And this is for good reason. It’s pretty clear if you read the paper that Mankiw doesn’t intend to be arguing for any really radical changes in the structure of American society. He wants to defend modern industrial capitalism, while bolstering the case for lower taxation of the rich and less generous spending on the non-rich. But think about his examples here. How is it that you can get rich writing books, making movies, designing MP3 players, or making TV shows? Well it’s thanks to statutory definitions of intellectual property. If the copyright on a book only lasted two years, JK Rowling wouldn’t be nearly as rich. If the inventor of the Xerox Alto owned some kind of perpetual right to the concept of a graphical user interface, Steve Jobs’ whole career would be unimaginable. And the firms involved in these industries are constantly “manipulating the system” of intellectual property to try to maximize their own advantage.
I think that this is a very astute point; the structure of modern intellectual property laws have made the creation of these goods very lucrative. But linking success to morality is a very tough proposition because most people who are very successful are going to benefit from favorable regulation (because in places where regulation is unfavorable, it ia harder to be a success).
Consider this small businessman in California (who has discovered that there is a tax for have retail hand scanners):
Then yesterday the bill arrived. Sure enough, the people of California had enacted a new tax on small business. $205 in my case, including $100 for existing and $105 for having a POS system with one barcode scanner. It's like a tax on progress, only applicable to forward thinking businesses that have migrated away from the inefficiency of the cash register. Want to raise state revenue? Require retail businesses to have a point-of-sale machine or pay a $205/year fine. At least then you'll have capital investments in equipment and services that lead to jobs and more tax revenue.
The bottom line is that politics in this state preclude tax increases and our state is tens of billions of dollars over budget. Conservatives decry tax increases while liberals won't budge on public services. This naturally results in the nickel and diming of small businesses. We don't have a union or trade group to defend us, so watch as our business fees silently rise 20%.
The merits of one specific tax may or may not be justified. But people can work hard at a socially productive activity and still end up with a marginal income due to the choices we make on how to tax and regulate business activity. We may have chosen the optimal levels of these things (anything is possible) but ascribing moral superiority to classes of people who manage to obtain favorable regulatory treatment does not appear to be ideal.
Hoisted from comments -- more on Mankiw's assumptions
David had this to say about my post critiquing the way Greg Mankiw and many other economist who defend the magic of the market don't spell out the highly restrictive assumptions they use in their arguments:
These statements may well form a set of conditions that are sufficient but for the most part not necessary to support Mankiw's conclusions. You could say the much same foe some list of statements in most intellectually mature movements. With Mankiw, I'd go even further and say that if these statements don't have to be true; they just have to approximate reality to a sufficient degree in order to make his case.
But we're talking about something slightly but significantly different. In this context, these assumptions are part of the arguments that Mankiw is making. It is, of course, possible for invalid argumnts to lead to correct conclusions and you can have a trivially valid argument that starts with a false premise, but (putting aside those old logic lessons about the implications of the existence of unicorns) you can't have a valid and meaningful argument based on false assumptions.
It's important to put this in context. Mankiw is arguing that, in addition to being immoral, a return to Clinton era tax rates would cause a sharp drop in productivity and economic growth. It is possible that he's right, but there is considerable historical evidence and any number of counterarguments (many by Nobel Prize winners) that contradict his conclusions. Under those circumstances, I think the burden of proof should rest with the guy who's saying this time it will be different.
An often neglected aspect of these standard assumptions is that they are *sufficient* not necessary conditions. Perfect information, for example, might not exist, but that doesn't mean there won't be an equilibrium capturing all the potential gains from exchange.
These statements may well form a set of conditions that are sufficient but for the most part not necessary to support Mankiw's conclusions. You could say the much same foe some list of statements in most intellectually mature movements. With Mankiw, I'd go even further and say that if these statements don't have to be true; they just have to approximate reality to a sufficient degree in order to make his case.
But we're talking about something slightly but significantly different. In this context, these assumptions are part of the arguments that Mankiw is making. It is, of course, possible for invalid argumnts to lead to correct conclusions and you can have a trivially valid argument that starts with a false premise, but (putting aside those old logic lessons about the implications of the existence of unicorns) you can't have a valid and meaningful argument based on false assumptions.
It's important to put this in context. Mankiw is arguing that, in addition to being immoral, a return to Clinton era tax rates would cause a sharp drop in productivity and economic growth. It is possible that he's right, but there is considerable historical evidence and any number of counterarguments (many by Nobel Prize winners) that contradict his conclusions. Under those circumstances, I think the burden of proof should rest with the guy who's saying this time it will be different.
"The generosity collapse"
Frances Woolley has an interesting post on the nonlinear relationship between demand and charitable giving:
People give when they're asked.
Jim Andreoni and Justin Rao have proved it. They ran the following experiment: one person, the allocator, was given 100 'money units', worth $10 in real money. She was free to choose how much to keep for herself and how much to give to another person, the recipient. The recipient, however, had an opportunity to ask for a particular division of money - 50/50, say, or 30/70 or 60/40.
It turns out that people who ask for more get more - up to a point. When the recipient asks for, say, 70 percent of the money in the envelope, the allocator is quite likely to say "sorry" and give nothing. But a recipient who asks for a 50/50 split on average receives more than the recipient who asks for nothing.
I'm not entirely comfortable with the way Woolley generalizes these results (I suspect her conclusions are correct; it just feels like a bit of a jump getting there), but it's a thought-provoking piece with important implications.
And the fishing analogy is pretty cool.
Tuesday, January 11, 2011
If a PhD isn't worth it, you can always get a law degree
Fresh on the heels of this, Felix Salmon continues to be the world's most depressing guidance counsellor:
David Segal is the best writer on the NYT’s business desk, so it’s a good thing that he was chosen to pen today’s 5,000-word disquisition on the economics of law degrees. He’s taken a particularly dry subject and turned it into a compelling and accessible read; that’s no mean feat.At the heart of the article is law schools’ bait-and-switch operation: universities rake in millions of dollars in tuition fees from students who are given to understand that a well-paid job lies waiting for them upon graduation. But such jobs are hard to find and precious few law graduates will ever waltz straight into a $160,000-a-year Biglaw job, especially if they graduate from a non-top-tier school.
Andrew Gelman on the methodological attribution problem
Andrew Gelman has a post in which he brings up the following insight:
I think that this concern is especially key for scientists who are moving between fields. The ideas and techniques in my field have been honed to a fine edge dealing the types of biases and design issues that often occur in our problems. I focus a lot on issues like "confounding by indication" and a lot less on other issues that can be very important in other fields. If I moved to another field, say economics, I might easily focus too much on small points (that really are not an issue in economics research) and yet miss the major points in the field. This type of translation issue is not inevitable but it is worth keeping in mind.
This sort of thing comes up a lot, and in my recent discussion of Efron's article, I list it as my second meta-principle of statistics, the "methodological attribution problem," which is that people think that methods that work in one sort of problem will work in others.
I think that this concern is especially key for scientists who are moving between fields. The ideas and techniques in my field have been honed to a fine edge dealing the types of biases and design issues that often occur in our problems. I focus a lot on issues like "confounding by indication" and a lot less on other issues that can be very important in other fields. If I moved to another field, say economics, I might easily focus too much on small points (that really are not an issue in economics research) and yet miss the major points in the field. This type of translation issue is not inevitable but it is worth keeping in mind.
Lithium in the water supply
There is an interesting post over at Worthwhile Canadian Initiative on whether to add Lithium to the water supply:
My first reaction is to note that Lithium is clearly a mind-altering drug and there does seem to be a basic principle that adding mind altering drugs to the water supply is a generally bad idea. Heck, the theme of the Firefly movies (Serenity) was all about a plan like this going very, very wrong. Or, more realistically, one could easily imagine the addition of sedatives to the water as being a response to political unrest (and this would also reduce the murder rate).
Furthermore, the original (ecological) study in Texas was based on naturally occurring Lithium in the water. This brings up two questions to me:
1) Is the distribution of Lithium independent of the characteristics of the inhabitants? This is necessary to make sure that this is not a confounding effect, of some kind (another way to say the same thing is whether water supply is a valid instrument for an instrumental variables analysis).
2) Is the causal agent lithium, or is it another substance that is associated with Lithium?
It is a complex question but it is very effective at making us evaluate our intuitions on public health intervention. Go read . . .
A city with no-to-little elemental lithium would need to add 70 micrograms/L of elemental lithium to the water supply. Since we're adding lithium carbonate (not pure lithium), we would need roughly 200 micrograms/L. (For reference, there are a million micrograms in a gram).
The average Canadian domestic user uses just over 100,000 L of water a year (Source). At 200 micrograms/L, we would need to add roughly 20 grams per person of lithium carbonate for a total cost of $1.53 per person, or $153,000 per 100,000 people.
The city of Toronto has 3.3 murders/100,000 people (Source). A 30% reduction in this rate would lower it by 1 murder per year per 100,000 people. If our rough back-of-the-envelope calculations are correct and the lithium carbonate method works like the Texas study suggests, $153,000 buys us one less murder. That does not take into account the reductions in rapes, suicides, drug use or thefts.
Will it work? I don't know. It seems like it would be worthy a pilot study or two. Although those levels of elemental lithium are believed to be safe, there may be side-effects we are not considering. There are ethical considerations as well, but it is hard to make a case that adding fluoride to the water supply is ethical but lithium is not - and we've been adding fluoride to drinking water for over half a century.
My first reaction is to note that Lithium is clearly a mind-altering drug and there does seem to be a basic principle that adding mind altering drugs to the water supply is a generally bad idea. Heck, the theme of the Firefly movies (Serenity) was all about a plan like this going very, very wrong. Or, more realistically, one could easily imagine the addition of sedatives to the water as being a response to political unrest (and this would also reduce the murder rate).
Furthermore, the original (ecological) study in Texas was based on naturally occurring Lithium in the water. This brings up two questions to me:
1) Is the distribution of Lithium independent of the characteristics of the inhabitants? This is necessary to make sure that this is not a confounding effect, of some kind (another way to say the same thing is whether water supply is a valid instrument for an instrumental variables analysis).
2) Is the causal agent lithium, or is it another substance that is associated with Lithium?
It is a complex question but it is very effective at making us evaluate our intuitions on public health intervention. Go read . . .
Google -- Over-spammed or over-engineered (or both)?
Brad DeLong points to a couple of posts on the declining quality of Google searches. Jeff Attwood concisely sums up the central point:
The great irony here is that by taking control away from the searchers, Google is making search engine optimization easier. If you really want to screw with the people trying to reverse engineer your algorithms, make the searches more interactive. If Google let us tune our searches with dials that changed the weights of parameters such as word order or proximity of words in our search, the results would be less annoying for us and more annoying for the SEO people.
People whose opinions I respect have all been echoing the same sentiment -- Google, the once essential tool, is somehow losing its edge. The spammers, scrapers, and SEO'ed-to-the-hilt content farms are winning.This is certainly right as far as it goes, but the Google searches that annoy me the most are the ones where Google decides I don't want what I just asked for, sometimes even ignoring quotation marks. For example, if you query "jeff bridges true grit", about a third of the results on the first page don't contain the string "jeff bridges true grit". This is an unlikely example but I've frequently found myself looking for an obscure search term that was similar to something popular. The results were unspeakably aggravating.
The great irony here is that by taking control away from the searchers, Google is making search engine optimization easier. If you really want to screw with the people trying to reverse engineer your algorithms, make the searches more interactive. If Google let us tune our searches with dials that changed the weights of parameters such as word order or proximity of words in our search, the results would be less annoying for us and more annoying for the SEO people.
Monday, January 10, 2011
'Standard' does not mean 'sound'
Eric Schoenberg is raising some important points:
As mentioned before, the way language is used in the debate compounds the problem. The 'free-market fundamentalists' (to use Schoenberg's phrase) often affect a folksy, plain-spoken tone. They make common-sense statements like "people are rational" or "people respond to incentives." They generally don't add that they are using these terms in a technical, highly specialized sense.
[Greg] Mankiw concisely summarizes the theory underlying the ethical argument for market capitalism: "under a standard set of assumptions... the factors of production [i.e., workers] are paid the value of their marginal product... One might easily conclude that, under these idealized conditions, each person receives his just deserts." Mankiw's long-standing opposition to higher taxes on the wealthy suggests that he thinks these conditions usually pertain in the real world, too.Mankiw's assumptions may all be correct, but they are not all self-evident. Some are at odds with experience. Some are in conflict with findings from related fields like psychology and behaviorial economics. Some are just hard to buy. These are the kind of assumptions that need to be stated and supported.
Consider me skeptical. The list of "standard assumptions" open to question is long... I believe, progressives must directly challenge the claim that unfettered markets create just deserts. This won't be easy. Free market fundamentalists have the advantage of a simple message -- ending bailouts will deliver just deserts -- and of nearly limitless funds from rich folks who benefited from the bailout but are happy to claim that it should never happen again.
As mentioned before, the way language is used in the debate compounds the problem. The 'free-market fundamentalists' (to use Schoenberg's phrase) often affect a folksy, plain-spoken tone. They make common-sense statements like "people are rational" or "people respond to incentives." They generally don't add that they are using these terms in a technical, highly specialized sense.
Sunday, January 9, 2011
Damned Canadian Show-offs
"Two and a Half Cheers for Education"
I've only had a chance to briefly skim this paper by Lane Kenworthy, so I can only give it a so-far-so-good recommendation, but what I've seen definitely looks interesting.
Here's a taste:
Thanks to Mark Thoma for the link.
Here's a taste:
Some home environments are less helpful to children's development than we would like them to be. Schools tend to do better. Evidence on this in the U.S. context comes from the natural experiment that is summer vacation. During those three months out of school, the cognitive skills of children in lower socioeconomic status (SES) households tend to stall or actually regress. Kids in high-SES households fare much better during the summer, as they are more likely to spend it engaged in stimulating activities. Cognitive psychologist Robert Nisbett concludes that "much, if not most, of the gap in academic achievement between lower- and higher-SES children, in fact, is due to the greater summer slump for lower-SES children."To get a fuller picture of this phenomena, listen to this segment on the Harlem Children Zone's Baby College from This American Life.
This is relevant also for inequality of opportunity. Some argue that
schools actually worsen inequality, because children from high-income households benefit more than their less advantaged counterparts, thereby widening the disparity. As the evidence from summer breaks attests, that is wrong. Without schools the gap in cognitive and noncognitive abilities almost certainly would be greater. Though they can't possibly produce full equalization, schools do help to equalize.
Thanks to Mark Thoma for the link.
Saturday, January 8, 2011
Political rhetoric and political violence -- the McKinley Assassination
William Randolph Hearst was relentless in his attacks on President McKinley. When the president was assassinated, those attacks had consequences:
We'll have to wait to see if there will be any real consequences for this.
Hearst Burned in Effigy
The publisher learned of the shooting in Chicago and said quietly to editor Charles Edward Russell of the American, "Things are going to be very bad." All of his papers took a sorrowful, solicitous, hopeful stance while waiting for news of McKinley's fate. When the president died, Hearst's enemies reprinted the cartoons, the poem, and the editorial that seemed to incite assassination. It was widely believed that Czolgosz was carrying a copy of the Journal in his pocket when he shot the president, but that story is apocryphal. Nonetheless, the Hearst papers were widely boycotted, and their publisher was burned in effigy along with anarchist Emma Goldman, whose lecture Czolgosz cited as his true inspiration for the assassination. Hearst punished none of the writers or cartoonists but soon changed the name of the Journal to the American. A cloud hovered over his empire for about a year, but by 1902 he was popular enough to win election to the House of Representatives from New York.
We'll have to wait to see if there will be any real consequences for this.
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