Tuesday, 30 September 2014

Why the Catholic Church May Have Caused France to Have Too Low a Population Today

Usually when the Catholic Church is mentioned, one thinks of persons encouraging people to have more children and consequently populations to grow. However, in a current working paper, Oxford economist Ferdinand Rauch and his LSE colleague Guy Michaels show that the Catholic Church may have caused there to be fewer Frenchies today than what would otherwise have been the case. From the abstract:

"Do locational fundamentals such as coastlines and rivers determine town locations, or can historical events trap towns in unfavorable locations for centuries? We examine the effects on town locations of the collapse of theWestern Roman Empire, which temporarily ended urbanization in Britain, but not in France. As urbanization recovered, medieval towns were more often found in Roman-era town locations in France than in Britain, and this difference still persists today. The resetting of Britain’s urban network gave it better access to naturally navigable waterways when this was important, while many French towns remained without such access."
One reason why this happened is the decline of the Catholic Church on the British Isles after the collapse of the Western Roman Empire in 453 AD, while the bishoprics of France remained strong and attracted people who might have otherwise founded new towns.

This is a very interesting working paper and I hope it will be published in a good journal. This is not really my field, but before, I put a great deal of stock in the locational fundamentals hypothesis, but now I tend to think that maybe cities are also partially just random formations from a group of people's at one time happening to live close together.

Still, I am not saying that randomness is a big part, just somewhat greater than I had thought before. To adjudicate between the competing hypotheses, one can look at bomb raids and natural disasters and see whether the affected cities have risen again. This is the approach taken by many economists and as far as I can tell it tends to favour the locational fundamentals hypothesis. But Rauch and Michaels do a great job of achieving variation in the sources of evidence and that is why I update my beliefs and why I - again - hope this paper gets its authors a really good publication.

Sunday, 28 September 2014

Football Associations' Dislike of (Some) Property Rights

Football's ("soccer's") worldwide governing association are apparently attempting to ban third-party ownership of footballers (link will start an annoying video, though the video can be switched off), which means that one can play for a club "on loan" from some consortium or other owner-organization. The cited reason is that the phenomenon has been found to influence where players are going, which seems to be against FIFA regulations for some reason. European counterpart UEFA's official stance is similar:
"UEFA says the practice drains huge sums of money from the sport, and threatens the integrity of competitions when players are transferred regularly to generate profits. "It threatens the integrity of our competitions, damages football's image, poses a long-term threat to clubs' finances and even raises questions about human dignity,'' Platini said."
I don't see why third-party ownership's influencing where players are going should matter. All owners are apt to be interested in making money and so players go wherever there is most of it (provided that they want to themselves), irrespective of ownership. This means going to the club whose fans are willing to pay the most to see the player in action. So why would third-party ownership matter for footballers' destinations? Probably because it enables them to get around certain transfer rules or because transfers can be more difficult to negotiate with additional parties involved, but I am not sure.

UEFA's stance is odder still. The way in which the integrity of competitions is threatened by third-party ownership is not made clear in the article. Maybe (again) because the transfer rules are different, so that third-party-owned players can be signed even outwith the transfer window? (I don't know if this is the case.) I have to make yet more guesses as to why the phenomenon damages football's image or raises questions about human dignity.

Presumably Michel Platini (the head of UEFA) might think less of football, but maybe others will be attracted to the game, so it does not damage its image? The lost human dignity is perfect nonsense, since third-party ownership is an option, not an imposition. Rather, the dignity of individuals is damaged when they want to have a third-party ownership relationship but busybodies prevent it.

A footballer's transfer rights can be partially owned by a club, and partially by a third party, which may be the reason behind Platini's lament of the draining of "huge sums of money from the sport", since when a player is sold, it may be that only a small fraction of the transfer fee goes to the selling club. I suppose Plataini is forgetting that this means they also paid less for him in the first place. So no drainage.

On the whole, then, I do not see any problems with third-party ownership. I mentioned that transfers may be harder to negotiate, but nobody is forced to enter a third-party ownership arrangement ex ante, so probably the benefits exceed the costs. I suspect this proposed ban comes down to some influential clubs being unhappy with present arrangements and pressuring governing associations to take action. The losers if the ban goes through will probably be smaller clubs, unable to come up with the funds required to purchase 100 per cent of top players' transfer rights.

Thursday, 25 September 2014

The Morality of Markets

On the Freakonomics blog, they highlight a new podcast called "Fitness Apartheid", discussing a the decision by a building board in a partially rent-controlled New York City building not to let tenants paying below the market rate use the building's gym. The transcript, which I cannot seem to access in full, contains Professor Steve Levitt's two pence:
"LEVITT: I would call this disrespect. It’s intentionally showing through your actions that you have no respect for the old-guard people, and rubbing it in their face in a way that markets don’t really do. Markets are not moral or immoral, they’re amoral. Markets don’t care. In a market world, you say, ‘I don’t care if you live here or not. I don’t care who the identity of the person is. As long as you pay the right price and you don’t impose negative stuff on other people, it’s fine.’"
Since I lack access to the full transcript, I need to interpret what the original Freakonomist says here. I take it that he disagrees with the building board's decision and thinks of it as an anti-market one. The problem that Professor Levitt has with the decision is that it disrespects certain tenants, and the contrast he offers is with a market in which those who pay would use the gym.

I think the comparison does a good job of suggesting that the board's decision is perhaps not an optimal one since it allows no market for use of the gym. Personally, I would think that the board, as long as it is in legitimate control of the building, has the right to be disrespectful, but if I understand things correctly I can basically go along with calling their decision disrespectful. (Those referring to this as "fitness apartheid" take disrespect to a whole other level, however, since it is not really about keeping anyone unfit; those who live in rent-controlled flats should have more money to buy a gym card outside of the building.)

But what I really want to discuss here is Professor Levitt's argument that markets are amoral. What are markets? They cannot be touched and not really painted either, except perhaps if the motif is goods and/or money changing hands, or eyes looking as though they are inspecting a product. Markets are interactions between people. To say that interaction is morally superior to no interaction would be hard to justify, since not every interaction is desirable. For instance, I have absolutely no desire to buy beer or spend any time at all with millions of people. I don't drink and while I do not have any enemies as far as I know, there are certainly people who would not benefit from my company, nor I from theirs.

The way Professor Levitt seems to define amorality strikes me, however, as rather moral. As seen above when talking about what the market is all about he says ‘I don’t care if you live here or not. I don’t care who the identity of the person is. As long as you pay the right price and you don’t impose negative stuff on other people, it’s fine’. Compare this to the moral theory of negative rights and I don't think you'll find any difference. What Professor Levitt adds which markets do not necessarily do is the clause that one must not impose "negative stuff" on others. Take this away and markets would be (potentially) immoral by the negative rights point of view.

On the other hand, F. A. Hayek argued, notably in his important book The Constitution of Liberty, that (free) markets reward social use, since voluntary payments for products and services are larger the more important are the products and services in question. This sounds like a good case for the general morality of markets, but Hayek's defence of free markets rests on his argument that no man is smarter than the market and that no one individual can allocate resources more efficiently than can freely interacting individuals in the market. However, one could imagine a supercomputer or a genius coming up with a way to beat the market, and since its outcomes are not always morally blameless (e.g., externalities, again), markets would not look so generally moral anymore.

I am of course a great fan of the free market, but I believe Professor Levitt is basically right in calling markets amoral, though I suspect I may have somewhat different reasons. As interactions, I don't see how markets can have any moral value, positive or negative. It would be immoral of somebody to meddle in two individuals' voluntary interaction, but to suggest that the voluntary interaction in itself has moral value opens the possibility that there can be net gains in moral value from one person's being forced to facilitate interaction between others. This could potentially justify murder if sufficiently many interactions were thereby enabled.

So no, markets cannot violate moral rules, nor are they moral in themselves. Only individuals can be morally blame- or praiseworthy.

Monday, 22 September 2014

Utilitarianism and Free Will

If utilitarianism is true, our morally permissible actions are constrained to the ones which maximize the net present value of total aggregate utility. Absent possibilities to reach the maximum by different actions, this means that, if we have chosen to act morally, we are not thereafter free to choose anything at all.

Free will is of course a debatable phenomenon. It is fine for reasonable people to disagree with me and claim that there is no such thing as free will - though I am probably right!). But whichever answer one reaches on the issue, it seems to be true that free will bestows upon us a certain dignity which we would otherwise lack.

Might not utilitarianism therefore rob us of that dignity? I am no utilitarian, but it seems to me that the answer is no. A utilitarian who is free to choose could simply keep making choices completely in accord with the utilitarian demands because that is what he fancies. Even if he believes utilitarianism is an objective moral fact, it will not stop him from arguing that a person can choose not to obey moral facts.

This reminds me of a classic attempt to refute free will. It starts by assuming that a person's actions are completely predictable (such as they are if a person always behaves according to strict utilitarianism), and notices that if actions are predictable the actor could not choose them. On the other hand, the attempt goes on, assume that actions are random and so unpredictable. In this case, the agent can hardly be said to choose, since choice would imply randomness. (But what if actions exhibit some tendencies with a measure of noise?)

What the attempt misses is that one could behave according to some rule because one wants to. This, incidentally, is also why rational choice is compatible with free will. Perhaps one simply wants to maximize one's own utility. That one wants it is no evidence for the proposition that one could not want differently.

Sunday, 21 September 2014

Immigrant Lingo

Of the many interesting things to learn from H. L. Mencken's The American Language, some are to be found in its section, near the end, on foreigners living close together in America and how their language evolves. One famous such group is the Pennsylvania Dutch, who were not actually Dutch but German. They were called Dutch, not because of any confusion but, according to Mencken, because they called themselves Deutch (pronounced in their dialect as Deitch, though the diphthong is pronounced oi in standard German) which, of course, is German for German.

Mencken writes about how Norwegians, Germans and many other groups began to use English terms in their regular speech amongst themselves, providing very many fascinating examples to illustrate what appears to be a gradual trend towards an increasingly Anglicized language.

It occurs to me that I know of no similar examples today. Most immigrant English I have heard is rather high-functioning, but when I hear immigrants talk amongst themselves I never really recognize any words at all, although some book titles (like Econometrics) are obvious exceptions. Society is of course different in many ways today compared to the 1930's when Mencken last amended his great work of linguistics. If my casual observations are right, the question is in which ways society has changed to make immigrants use fewer loan words among themselves.

One possible way is telecommunication. When Mencken wrote, I believe there was no trans-Atlantic telephone line whereas today it is easy to get on Skype with almost anyone else in the world. Even before Skype, telephone communication has of course been feasible and inexpensive for several decades. It strikes me that any possible decline in English influence in immigrant lingo attributable to more contacts with the Mother Country should be discernible provided that immigrant speech has been continuously studied.

Another, more dire, reason, is that regulations have made immigrants harder to hire (think minimum wages and work safety, for instance), and that we are more regulated today than we were in the 1930's. If immigrants as a result associate less with the indigenous population, their language will not be as influenced. I reckon this explanation might fit some refugees or asylum seekers who come to escape in addition to finding work, but persons coming in specifically to seek work are not captured by this explanation, since they simply cease coming when opportunities decline.

Maybe there are other contenders to explain my casual observations. Or maybe my casual observations are wrong. Comments with information on these issues are greatly encouraged.

Tuesday, 16 September 2014

Teaching vs. Learning

I sometimes wonder if there might be too much teaching in a "crowding-out" sense. There is only so much time and teaching takes it away from independent learning. If one is assigned sufficiently many books to read and techniques to learn, one cannot pursue independent thoughts to the possible detriment of new ideas. However, if one is not assigned anything, one might conclude that one should not do anything. What is the optimal mix between independence and "teaching"?

Dr. Johnson's adage that "a man should read as his fancy takes him for what he reads as a chore will do him little good" seems to me to be almost self-evident, though many will require some assistance in getting the most out of their fancies. For instance, there are exceedingly many books worth pursuing and one's fancy may find difficulties in choosing among several at the top. The guidance of seniors, such as teachers assigning books to read, may then prove helpful.

This approach regards fancy as rather finely divisible, since one is allowed guidance to pursue it, in contrast to the route of choosing a subject (say, in graduate school) and being offered guidance there according to often fairly stringent limits: these very courses and these specific books or papers. But again, maybe that is the right approach?

Here is a radical idea that I wish would be implemented to test the relative merits of the finely-divisible fancy and the block-fancy: Let students take whatever courses they like (if any) and judge their progress by paper output after three or four years. Students taking courses may begin writing papers more slowly, but to the extent that courses help them their papers will be of a much higher quality when they begin. Students who want very narrow specialization can avoid several courses and, if they were right in doing so, will benefit from the freedom to pursue their own projects which reduced course work allows.

Maybe there are some programmes of this variety, only I have not been acquainted with them yet. It would be interesting to attempt to measure the calibre of the students they graduate as compared to that of other programmes.

Friday, 12 September 2014

The Morality of Monopoly

If somebody controls all of some valuable commodity or service and no-one else knows how to produce it, that somebody is a monopolist. If I lament that his high prices are therefore immoral, do I have a case? I would say that the answer is in general "no".

Consider now the analogous case in which one man possesses very many characteristics prized by females, so that hundreds of women really would like to marry him in a gargantuan group marriage. This is of course not without precedent as harems have historically been a part of many countries' institutions. However, the man only wants one woman - who may or may not end up paying a higher "price" for having him all to herself.

The man is a monopolist for only he possesses that very combination of qualities which makes women like him so much. One could imagine that he has done something really extraordinary so that he really has no close substitutes. So why should it be OK to deplore the traditional monopolist but not the popular gentleman? As far as I can tell, it should not be OK. Perhaps the reason has to do with rights.

One has the right to do as one pleases with what one owns. Therefore, popular males have no obligation to be polygynists and monopolists have no obligation to supply more of what they can produce. Of course, this assumes rightful appropriation, so very many actual monopolies might be said to be immoral. But in my idealized case, I have trouble seeing some other plausible defence of the monogamous man, though maybe I am wrong.

With some things, the appropriation of some of it leaves less for others to enjoy, some of whom are unborn. John Locke defended private property of land as long as the appropriator leaves as much, and of as good quality, to others, which seems quite impossible on a spherical earth. But maybe one's efforts on one's land can raise the value of land nearby and produce stuff others value, which compensates the non-owners. However, if one has the right to do as one pleases with what one owns, one can also use the land as a dump.

The thinking presented in the paragraph above contradicts the defence of the monogamist. If one has an obligation to leave as much for future generations who could not help not existing yet, then one should make maximal use of one's resources now, including capacity to procreate with willing persons. But if one may do what one wants with one's property, there is of course no such obligation.

The justification for why one might have an obligation to future generations (even if one has no obligation to one's contemporaries) says that contemporaries can act now, so any resources presently up for grabs may go to them if they apply themselves. Not so for the unborn. It is right and proper to point to the tendency for individuals to use their resources optimally so that future generations are compensated, but what this blog post deals with is the moral question of why it would be wrong to fail to optimize.

Notice, however, that if people did not care about material things, nobody would challenge the landowner who refuses to do anything worthwhile with his property. It is only because people care that some say he is obliged to maximize. If people care by and large, but the landowner does not, those who care will probably get rich and either buy the land from the non-maximizer or find ways to live without his land. In this way, non-maximizers count, too.

In other words, if there are people who do not care about maximizing, should not their wishes count to those who do? This argument appears to me to win the game for natural rights.

Thursday, 11 September 2014

Tit for Tats

Recent interesting posts on MarginalRevolution about the so-called "body art" known as tattoos have got me thinking about the issue. I find them thoroughly objectionable, but as is said in the new book by Professor Steve Levitt and Stephen Dubner, one should put one's moral (or in this case perhaps one's aesthetic) compass out of commission when analysing a phenomenon as a social scientist.

What do tattoos signal? For women, they probably signal some degree of promiscuity. As far as I understand things, in order to get a tattoo, one needs to be touched and those otherwise functioning people who want something to stand out like a scar on their skin normally pay someone to ink them up in this way. In other words, they pay to be touched. Provided there is no discrepancy in price for men and women, this seems to me to indicate that tattooed women are a little bit on the easy side. If they paid to be touched, imagine how much one could touch them, if so inclined, if one did not charge for it. Or, maybe that is just me not seeing the point of touching outside a relationship. This point may be sensitive to the decision of where on one's body to get it.

For men, the promiscuity signal is of weaker value because men are biologically more inclined towards such behaviour anyway (greater downside risk for women than for men, since men don't become infertile for nine months). If I have understood correctly, it hurts to get a permanent mark on one's body, so perhaps tattoos signal that one withstands pain? If so, they make other people less likely to attack, since they will then know that the fight can take a long time before there's any chance of submission.

Historically, tattoos have been more common in prisons and on ships, both of which are male-dominated environments. In such environments, some men exhibit homosexual tendencies. A tattoo which signals a high tolerance for pain (apart from embarrassment...) could then say to potential rape victims that they had better give in. To a potential rapist, they will signal greater resistance as the above paragraph makes clear. I have always found tattoos to signal a bit of "butch"-ness as well, in which case a tattoo turns a man who was previously an acceptable substitute for a woman into a poor substitute.

However, this last point is at odds with the conjecture above that women get tattoos to signal availability. But actually, I conjectured that they signal promiscuity, which is slightly different from availability. Maybe tattooed women are promiscuous and stupid, so they want "it" more but choose inefficacious ways of getting it. Or is my aesthetic compass getting in the way after all? I suppose even a somewhat "butchified" woman will still find it rather easy to find a mate for the short term. Generally women only have to say "yes" rather than make an effort for very short-term relationships. Or maybe tattoos do not signal "butch"-ness after all? I wonder what the relative ratios are between men and women who sport those nasty things.

There is probably a bit of a low-brow association with tattoos. In sports such as football ("soccer", that is, I don't know the American kind) they are very common indeed, and since that sport does not require much in the way of equipment, it may be that lower-class backgrounds are overrepresented in the game. By contrast, I have never seen a golfer or a tennis player with a tattoo and those are considered gentlemen's game (though it may be that their respective associations also have rules prohibiting tattooed persons to play). Perhaps tattoos are had by folks who know their mental faculties are so deficient that higher aspirations are futile, alternatively, by people who are so brilliant that even something so objectionable as a tattoo won't hurt their career prospects?

Tattoos were nowhere before this century as far as I can recall, but now they are not uncommon. I wonder what has caused this trend. If social interactions were enough, why have they not risen and fallen in the past? And why should one permanently mark oneself because of social interactions? Maybe I am missing something, but peer effects do not seem to have such big impacts in other contexts. Perhaps laser removal technology has improved and come down in price, so that tattoos are not in fact quite so permanent anymore? These are strange things to me, possibly because I failed to disable my aesthetic compass.

Sunday, 7 September 2014

The Imminent (?) Brown Bag-Ban

California Governor Jerry Brown is poised to sign a piece of legislation banning single-use plastic bags (i.e. not "thick" plastic bags) in California, "reasoning" that "there are about fifty cities with their own plastic bag ban and that's causing a lot of confusion", in reference, it would seem, to chain stores having to send different bags to different locations. I don't know but I guess this ban is imminent. I have not paid attention to the issue until now so I cannot say. Hence the "(?)" in the title.

Unlike the Governor, I am not an expert on logistics and so cannot offer comment on the chain stores' shipment difficulties. However, it strikes me that locations differ in many other respects, too, besides whether their local politicos look favourably on thin plastic bags. For instance, chain stores presumably send more ice cream to any given retailer in San Diego than to one in Eureka, and fewer umbrellas to Los Angeles than to Crescent City (on the Pacific shore near the Oregon border). Maybe the consumers who preferred single-use plastic bags could accommodate confused retailers on these matters as well?

And why stop there? The beleaguered postmen all over the world must sort newspapers so that the right household gets the right subscription. Can't just all the newspapers merge and every household subscribe for the resultant paper? If these proposals seem silly, it is because they are. So is the proposal by the Sacramento legislators. Other things count beside avoiding "confusion". Maybe the cities which have banned single-use bag had some particularly good reason for doing so? I doubt this is true in every case, but it could be true for some of them. The one-size-fits-all agenda will certainly stop some people's confusion, but like all central directives it will be costly to those of a different size and strike a blow (albeit a small one) to the prospects of Tiebout competition.

Apart from the issue of confusion, there is also an environmental aspect. Of course, plastic degrades slowly and is thereby anathema to many environmentalists. I wonder, however, whether the extreme thinness of single-use bags, which I have frequently used, makes them more environmentally friendly than the thicker bags after all. For example, if the multi-use bag can be used, on average, a thousand times more than can the single-use bag but has a thousand-and-one times greater mass, it would seem plain that the multi-use bag is environmentally the worse option.

Perhaps the environmentalists and the politicos favouring the ban have already thought of all this and answered that multi-use bags are indeed better. If so, I have just missed the part when they said all this. But given the plethora of ill-considered policies in place throughout the world, ranging from minimum-wage legislation and CAFE standards to tariffs and drafts, my guess is that it is, for the moment, an open question whether single-use bags are actually any worse for the environment than are multi-use bags. And even if they are worse, if they are only a little bit worse it would likely still be a terrible idea to ban them since many people find it in their interest to use them and the environment is not all that counts.

PS. Notice in the title the importance of hyphens (-). Ban of the lunch bag would see the hyphen between "brown" and "bag" as in Brown's "Brown-Bag Ban". As far as I understand the English language, it is up to the writer whether he wants a hyphen between "Bag" and "Ban" as in the title of this post. I do it to connect the ban with bags rather than with bags which are brown.

PPS. This blog post seems to have momentarily disappeared for some reason. This is the second attempt at posting.

Wednesday, 3 September 2014

Three Pungent Quotations

Every now and then, I read short sentences which contain so much insight that I feel the urge to write them down. I used to have a note pad full of them (quite a sizable one, more so, effectively, because my handwriting is tiny), but unfortunately I lost it when moving house. Fortunately, I found it again when moving a second time! Onwards and upwards! Here are some choice ones:
"[E]agles and lions can never be so plentiful as pigeons and antelopes"
- Alfred Russel Wallace
On a first glance, this looks vaguely mysticist if one is unacquainted with biology. However, it has to be true, because lions and eagles eat antelopes and pigeons. So if there were more predators than prey, the predators would starve and die, making the prey relatively more numerous.
Another one:
"Diminishing marginal utility is increasing marginal cost".
- Frank Knight
Optimizing individuals who suddenly produce one fewer of something to make one more of something else are no longer optimizing. This is nothing huge to any economist, but it is a pithy formulation of the fact that increasing marginal cost implies diminishing marginal utility, and vice versa.
"And the angel of the Lord said unto her, I will multiply thy seed exceedingly, that it shall not be numbered for multitude"
- Genesis 16: 10 (quoted on p. 29 of Jan Gullberg's Mathematics: From the Birth of Numbers)
Illustrating the concept of infinity as being beyond numbering, this is a very profound titbit of insight from the Holy Bible.

Here is another quotation to end this post:

"That's all, folks!"