Thursday, July 20, 2017

Optimal Level of Discontent

This paragraph from Richard E. Wagner's To Promote the General Welfare impressed me:

What is perhaps of more concern for questions of justice is neither the distribution of income nor even the correlation between the economic positions of parents and children, but the extent to which people feel stifled by their backgrounds and locked into modes of life they do not truly choose. The widespread growth of such a sense could well undermine the basis for social order,.... If so, the legitimacy and stability of a social order would seem to require conditions that prevent the growth of such sentiments. However, objective measures of the results of economic activity mayb have little ability to describe the extent of this stifling of personal development. [p. 44]

For social growth, we need discontent with the status quo, but if the system itself is viewed as the status quo with which we are discontented, then we undermine society instead of help it progress. A player on a losing team is motivated to try harder in the off-season unless he thinks the league is backing a particular rival team, and then he quits the game in disgust.

To what extent can we prevent the growth of fatalism? Is there a social program or government policy that would work here without giving rise to criticism of state tinkering in private morality?

The faster rate of technological development can move more people out of any perceived ruts, but it doesn't do the job here because it's seen as random. Go to college and study something and maybe 15 years from now you'll be a millionaire because we all need what you were trained to do, but what's more likely is that 15 years from now we've automated what you learned to do in college. As this trend continues and accelerates, even the "winners" will feel increased fatalism.

Wednesday, July 19, 2017

Airline Ticketing and Skipped Legs

My wife is flying today, so I spent some time trying to understand the economic argument for the harm airlines say they incur when you skip a leg of a multi-part trip. And I can't see it.

First, the issue: sometimes it's cheaper to fly from, say, New York to London, by booking a ticket from New York to Manchester with a layover in London. Then, when you land in London, you get off the flight.

The airline says this is a Very Bad Thing, and they've sued entrepreneurs who create websites to help you exploit these pricing differences. But in what possible way are they harmed? The airline has been paid to move a seat from New York to Manchester, and so they have no argument that they receive harm. Once the resource has been paid for, it doesn't matter to the original owner what I then do with it. If it does, the first sale price needs adjustment.

Airlines say it's bad because they could have sold that seat to another customer. But that's a bogus argument, because they've already been paid for the seat. If they have unmet demand, they should raise the price of tickets, not complain about how the buyers make use of the product.

What if the airline is operating at its efficiency scale and this phantom demand for London-to-Manchester seats induces the airline to expand its flights on the route, thus operating with diseconomies of scale? Well, If they are on their short-run cost curve, in the long run they will switch to a lower-cost production method. If they are on their long-run cost curve, there is room in the industry for another firm to open. The inefficiency will clear, but it might do so through greater competition.

Is THIS the real problem the airlines don't like? I don't see how it's my responsibility as a consumer to help manufacturers maintain their market power.

One last possible argument is related to the experience I had in Bangkok, where my mangoes-and-sticky-rice provider had a menu listing whole plates and half plates, but when I tried to order a whole plate, they wouldn't sell one to me because there weren't enough mangoes. Economic theory says price is supposed to take care of this problem--it there aren't enough mangoes, raise the price and quantity demanded will decline. But they are unwilling to do this due to some combination of influences that can probably all be called menu costs: either actual costs of changing the menu prices, or the loss of consumers' good-will when the firm is perceived as taking advantage of poor people's love of mangoes and sticky rice.

So are airlines concerned about upset customers who get turned away from London-to-Manchester flights that still have empty seats, but the airlines are unwilling to raise the ticket price because of menu costs? It's true that many airlines find themselves in Bertrand competition these days, but they get around that by turning every possible flight-related activity into a fee. They can keep the price the same and charge a connection fee, or a missed connection fee (or, knowing airlines, both). And I just don't see loss of good-will governing that many airline decisions these days (I'm thinking of what the TV show 30 Rock said was United's slogan: "We hate this as much as you do"). And besides, airlines have the stand-by list to use to fill empty seats.

I have a hard time believing they are moving any empty seats anywhere unless there is not a ticketed passenger available to sit in it. And some of those seats are bringing in money from people who have skipped a leg. Airlines are upset because either, 1) a passenger got to London without paying as much as he otherwise would, or 2) robust demand will attract competition. Neither of these concerns is the passenger's responsibility to correct.

Tuesday, July 18, 2017

Things That Were Better Before: Amazon Kindle

I should make this a repeating series: Things That Were Better Before. Because, more and more, I am finding myself thinking, "That used to be great, but now it's not." Like the entire world has become a giant Quizno's or something.

My Kindle is underwhelming me more every day. My first problem is storage. It comes with a certain amount of storage (my model has 8 GB) with the option of adding an SD card. However, lots of the apps won't install to anything but the internal storage. I added a 32-GB SD card and moved what could move, which turned out to be about 500 MB. That's it. I still get "memory almost full" messages, I've had to remove apps, and others can't run because of space limitations.

So what's the other 31 and a half gigabytes of SD card doing? Well, Amazon now has a new "feature" where, if your device has unused storage, it automatically downloads videos to your device for you to watch later. So now I have a bunch of "The Man in the High Castle" or whatever the hell that show is called. There's a way to turn this "feature" off, thankfully, except I've done that and I still get episodes downloading to my SD card.

I've changed my setting so my pictures save to the SD card, so I guess I could take a ton of pictures. Except the Kindle camera is terrible because it can't focus (seriously, it's 2017 and there are still unfocusing digital cameras being made in this world?). Also, Amazon has changed the photo app so it's unclear where photos go when I take them. They are on the device but also in the cloud and when I delete the photo it only deletes from the device.

And Amazon's cloud service has decided that the unlimited storage plan I've bought doesn't exist anymore, so now I can switch to a variety of limited storage plans. Physical things aren't subject to the store repossessing them after the sale. Even defined digital items aren't subject to this (once I buy a PDF of an article, it's mine). But when the entire world is run on subscription services, what you've bought is only defined until the next billing period, when it may change at the whim of the provider.

The Amazon app store is under-serviced, so I can't get my bank's app on the Kindle without adding Google Play and doing some tricks to make the Google app store think my Kindle is a phone. But then I have to carry Google Play on my Kindle (in the device storage, of course) so I can do mobile banking. But with the terrible Kindle camera, I can't always take legible pictures of the checks I'm trying to deposit.

I've written before about how the commoditization of everything is ruining everything, about how radio is terrible now that radio station owners want to extract every possible cent of value from the radio listener. Well, the same thing is happening to the Kindle user experience. Five years ago, Amazon made their money from Kindle users when the users bought their Kindles. Now they are trying to make money from the users every time the users interact with the device.

I saw an article yesterday about how Amazon as a company is comprised of a breaking-even retailer and a digital services company that has some enormous profit margin. This means I should expect this trend to continue and worsen. I think Amazon is expecting mood affiliation to keep customers from defecting to Walmart. However, I have more affinity for Walmart than I have for Amazon.

Monday, July 17, 2017

South Carolina Fini-- No It's Not

My wife is going to California for our nephew's wedding, and since there's nothing I hate more than having to spend time with my children, I orchestrated pawning them off on my parents. (Actually, it's supposed to make it so I can work during these two weeks.) Since my parents live in Ohio and we live in Florida, we decided to meet in the middle.

We left last Friday and drove through eastern Georgia and western South Carolina. We camped at Sadlers Creek State Park.

Can I tell you how stupid it is that state parks and national forests don't let you reserve a campsite for one night on a weekend? Especially tent sites, since NO ONE CAMPS IN TENTS ANYMORE. Why do they even CALL it "camping" these days? There is nothing even remotely camp-like about what the people at the RV sites are doing. This park had 14 tent sites. Thirteen of them were empty. We were the fourteenth. But we had to pay for a night we didn't use because these tent sites are in such HIGH DEMAND that we can't POSSIBLY allow someone to reserve for only ONE NIGHT!

The next morning we finished the drive to Asheville, and summitted our ninth high point: Sassafras Mountain, South Carolina.

After we met my parents and abandoned handed off our children, my wife and I came home through Charlotte.

Our five-year-old car had its second cracked windshield from road debris. I mentioned this last February on my first trip back to America after 18 months in China, but American highways increasingly leave you with the feeling, "This country used to be rich." How about less crumbling infrastructure and more just infrastructure, America? Of course, that's not going to happen as long as public works projects continue to cost four times what a comparable project costs in Europe. Word of advice for drivers in Late-Empire America: get glass coverage from your auto insurance provider.

And a word of advice for Charlotte drivers: it's called rain, and you'd do well to learn how to drive in it. We saw six accidents in 20 minutes driving across town.

All in all, I added another 33 counties, moving my total to 1,807.

Looking at the map, you might be asking, "Why didn't you finish South Carolina?" Well, we have get to pick up our kids in the future, we thought. So I had a second trip planned for two weeks from now, which would have added these 37 other counties, completing South Carolina, western North Carolina, and adding our tenth high point: Mount Mitchell. However, comma, plans have had to change, and now my parents are going to drive the entire way to Florida to hand the kids back to us.

Good news about this change: two more days of working and not being robbed by another state park (this time it was going to be Tallulah Falls State Park in Georgia). Bad news about this change: no counties, no high point, and unsightly holes in my counties-completed map.

Tuesday, July 11, 2017

Annnnnd It's Gone Now

Last week I was weeding through some old correspondence (the real kind, kept in a box in my garage that I'm tired of moving about the country, hence the "weeding through"). As I was looking over old letters from friends, I came to an appreciation of these friends' friendships, and an idea that, despite how I've been feeling this year, I can still be friends with people who know I'm a failure. I resolved to write to them, but it was late, so I left the correspondence and the writing to complete the next day.

When I came back to it the next day, the correspondence seemed different. Instead of making me think, "Look at the good friends you have," it made me think, "Look at the good friends you used to have."

I've had this letter writing on my to-do list for a week now and I can't get any of it done.

Friday, July 07, 2017

Macron Makes Trump Look Like a Better Choice

French president Emmanuel Macron is beginning to draw some attention with his illiberal governance. However, he's not drawing nearly the level of attention he deserves, because he was the preferred candidate of the media class.

Donald Trump, on the other hand, has the undivided attention of the entire American media, ready to interpret his every move as a betrayal of America to his Russian taskmasters.

Assuming Macron and Trump have identical tastes for illiberality, which will be able to accomplish more of the illiberal agenda: the one with an under-scrutinous media or the one with an over-scrutinous media?

Macron is making Trump look like a better choice for president. Tell me this: in the days after a Hillary Clinton victory, does the Washington Post adopt its new motto "Democracy Dies in Darkness"? Given that they had eight years of an Obama presidency (the last three of which under Jeff Bezos) to find their defenders-of-classical-liberalism bona fides and they never got around to it, something tells me their attitude under Clinton would have been a lot more like the French media's attitude under Macron. If that's the case, candidates like Trump and Marine Le Pen have the added selling feature that they can goad the media into doing their job.

Wednesday, July 05, 2017

Perhaps News Is a Public Good

When I teach about public goods, I tell my students, "You have to get out of the mindset that 'public good' means 'government-provided good,' because it does not." In economics, a public good is any good which is non-rival and non-excludable.

If a good is non-rival, it means one party's use of the good does not diminish the user experience of any other party. A good is non-rival if it makes sense for you to ask, "Since you're already doing X, can I do it, too?" Of course you don't say to your friend, "Since you're already eating that sandwich, can I do it, too?" But you might say, "Since you're already watching that TV show, can I do it, too?"

A good is non-excludable if my provision of the good to one party is tantamount to providing it to all parties. I can't turn on the lights for just one person in a room; if I turn on the lights for one, the lights are on for all.

Many textbooks present a two-by-two matrix of possible classifications of goods based on whether or not they are excludable and rival. Like this:

To help reinforce my Prime Directive (Learn, Don't Memorize), I often tell students that I will constantly present the matrix to them one way but then on the exam have it the opposite way. However, that would involve remembering to always present it the same way in class, and I can't be bothered to remember crap like that.

Notice this analysis doesn't ask who provides what. Government can give away clothing and that does not move clothing from the "private goods" box to the "public goods" box. Nevertheless, there's a healthy percentage of my students who, when asked to identify the public good, select "a government-provided t-shirt." When economists call something a "public good," they don't mean that government is providing it, only that, without government provision, the amount provided will be inefficient (perhaps even zero).

The reason I mention all this is because Thomas Snyder writes in On Tyranny:

We find it natural that we pay for a plumber or a mechanic, but demand our news for free. If we did not pay for plumbing or auto repair, we would not expect to drink water or drive cars. Why then should we form our political judgment on the basis of zero investment? We get what we pay for. [p. 77]
Snyder isn't understanding excludability and rivalness. Plumbing and auto repair are private goods: when I pay for a mechanic, I am not necessarily providing one to everyone, and someone using a mechanic I've paid for leaves me with a worse service. But news isn't this way. That's why we think it natural to get our news for free.

Most solutions to the market failure associated with the under-provision of public goods involve government provision. When fire department protection was under-subscribed, fire departments became branches of local governments. So does this mean that news organizations should be paid for by government?

I started a new paragraph so that you'd have a split-second delay, and in that split-second delay, I think you probably thought of a million reasons this is a Very Bad Idea. (I've been reading A.A. Milne's Winnie-the-Pooh books to my youngest--he's actually waiting the end of this blog post typing so we can read a chapter of The House at Pooh Corner--and I see I've picked up Milne's habit of capitalizing Important Concepts and Terms.) It would destroy the First Amendment. Yet news seems to be a public good, and if we are concerned about under-informed voters (or--what's even worse in my book--what could be called uninformed-but-smugly-confident-they-are-actually-hyper-informed voters), we're not going to get a market solution to this problem.

Monday, July 03, 2017

On On Tyranny

Timothy Snyder's book On Tyranny promises to be great. Perhaps that's why it is so disappointing when you realize that it's not. What could have been one of the most important books of our current times turns out to be just a bit of anti-Trump hysteria.

First, what made it seem good? It is short and small (how can such a tiny book be threatening to the non-reading majority of Americans?). It is written in an accessible style (any junior-high graduate should be able to understand the vocabulary and concepts). The chapters are short (readers need not worry about fitting the book into their lives). It's available at Target, and for a relatively-low price.

All of this accessibility is important because the topic--the threat of American tyranny--is important. This topic could easily lend itself to any number of massive tomes, but this is material that needs to reach the common American. This could have been the Common Sense of our day, the volume that every adult American read and could discuss.


Instead, Snyder is content to hyperventilate about Donald Trump. While the twenty chapter headings are all non-partisan tips for resisting tyranny, the application of each heading is a purely partisan screed that gives the lie to Snyder's supposed concern with tyranny. It's not tyranny Snyder wants us to resist, it's Trump.

Which might not be completely contradictory, if Trump is, in fact, tyrannical. And Trump is the president of the day, so any resistance to tyranny in 2017 is going to be resistance to Trump, right? But Snyder gives no indication that America's march to tyranny had any origin other than the election of Trump. What of Barack Obama's growth of the surveillance state? Would the election of Hillary Clinton have set Snyder's mind completely at ease? Of course a criticism of the American government is going to involve criticizing the president, but Snyder doesn't criticize anything else.

Snyder writes, "European history has seen three major democratic movements: after the First World War in 1918, after the Second World War in 1945, and after the end of communism in 1989" (p. 11). This just isn't true. If Snyder was not an historian, he could be excused not knowing about 1848. But he is an historian, at Yale University. If he wrote, "Twentieth-century Europe has seen three major democratic movements," he'd be absolutely correct (and in line with his book's subtitle: "Twenty Lessons from the Twentieth Century"). I know any criticism of what is missing can be answered with, "Well, I was trying to keep it short and punchy," but my proposed wording does not increase the word count at all (counting hyphenated words as single words), and only increased the character count by eight (and that chapter has room for six more lines of material on its last page).

I see this as symptomatic of Snyder's tendency to simplify history beyond its breaking point. While he starts the book acknowledging the tyrannical nature of both fascism and communism, it is the fascists that come in for more of the criticism. He writes of disillusioned voters being ripe for picking by fascist politicians and "post-truth is pre-fascism" (p. 71), but in the twentieth century, more people were killed by left-wing post-truth tyranny than by right-wing post-truth tyranny.

"But it's the right-wing version we face today!" Is it? Again, Snyder seems to think so, but the way I see it, the threat of tyranny is coming from both sides. Snyder writes an entire chapter on establishing a private life (Chapter 14) with no mention of Edward Snowden, Barack Obama, and the NSA. He writes two chapters on resisting Groupthink phrasing (Chapter 9 and Chapter 17) with no mention of campus speech codes and the persecution of those deemed politically incorrect. Tyranny has many faces, Tim, not just (in the words of John Oliver) the "smug and somewhat gassy" face of Donald Trump. You should ask your former colleague Erika Christakis if the face of tyranny ever resembles a Yale student.

Campus fascists are clearly not in Snyder's concept of tyranny. He writes, "It is those who were considered exceptional, eccentric, or even insane in their own time--those who did not change when the world around them did--whom we remember and admire today" (p. 52). Does Snyder speak so highly of those who resist the imposition of non-binary pronouns on the verbiage choices of others? Or what about when Snyder writes this?

You submit to tyranny when you renounce the difference between what you want to hear and what is actually the case. This renunciation of reality can feel natural and pleasant, but the result is your demise as an individual--and thus the collapse of any political system that depends upon individualism. [p. 66]
Would Snyder condemn the "renunciation of reality" inherit in Kim Q. Hall's paper "'Not Much to Praise in Such Seeking and Finding': Evolutionary Psychology, the Biological Turn in the Humanities, and the Epistemology of Ignorance," wherein Hall complains that biological concepts of gender lead to "hostility and intolerance" towards "feminist insights" into gender? Was pre-transition Caitlyn Jenner being Woman of the Year a contributing force to tyranny? Well, since it wasn't Trump's doing, Snyder doesn't feel any need to look into it.

Timothy Snyder's On Tyranny could have been a seminal book in American history. Instead, it is echo-chamber literature for those terrified of Donald Trump. The chapter titles and the abstract introducing each chapter forms the outline of a great book that needs to be written. Maybe someday someone else will do it. Snyder didn't have time because he was presumably sharing anti-Trump memes on his friends' Facebook timelines.