Does Dynamic Pricing Have a Speed Limit? Should It?

On the heels of the big Uber flap over its dynamic pricing model, and Matt Yglesias exploring alternatives to explicit dynamic pricing schemes in the restaurant industry, there's been a lot of discussion over the variability of prices lately. The reasons are pretty clear: technology and the internet have crashed the costs associated with setting up transactions down to essentially zero. A corollary of this is that with an algorithm (or the click of a button) you can change prices constantly. Input commodities have had rapidly-changing prices for a long time, but front-end dynamic pricing has been limited in the customer service domain (hotels, lobster shacks, etc.) Clearly we're seeing the conflict that arises when people's norms and expectations don't keep pace with technological change.

Dynamic pricing seems to be mostly a good thing. It uses resources more efficiently (along the intensive margin), allows more price discrimination (charging people what they're willing to pay), and incentivizes new supply during peak times. But in some areas there are probably limits to the social gains to be had from ever-faster price changes. The best example of this is high-speed trading in financial markets, which now operate at speeds far exceeding what their supposed capital-allocation function requires.

As parts of the economy become more "service-and-flow"-oriented (also called the "sharing economy") and less ownership-based, the moral implications of constantly-shifting prices become apparent. If few people own cars and simply order the service of road transportation (from self-driving cars, or cheap ride-sharing programs), everyone becomes very exposed the uncertainty of changing prices. Certain groups (like those with money!) will be better able to cope with the added uncertainty. If you can't say for certain how much your parking meter is going to cost before you leave the house, maybe you'll just stay home.

Perhaps everyone will simply adapt and routinize price-checking in the morning alongside their coffee and newspaper, but for people who's mental bandwidth is already stretched this could be a problem. Lifestyle complexity is regressive. From this perspective, certain forms of regulation can be justified on the grounds of limiting the adoption of dynamic pricing. I've tended to be a big supporter of eliminating building and rental/housing restrictions, but imagine what a truly efficient housing sector would mean in sellers-market conditions: would renters have to pay different amounts every month? Every week?

We're already seeing business trying to reduce the stickiness of their labor costs by rebalancing to more part-time and temporary workers. While the macroeconomic effects of this trend might be nice (for GDP growth at least, not so much for unemployment), more and more dynamic pricing in key sectors could also have worrying pro-cyclical implications. The effects of demand shortfalls could more easily (and more quickly) ripple through previously isolated areas of the economy. How these competing effects of faster price changes actually compare in the data is a underexplored topic for researchers.

A Strange Fashion Moment

Random cosmic convergence or a sign from the fashion Gods?
Photo Credit: ebay.com

The fashion industry is one of the most dynamic and fascinating. The nearly complete lack of intellectual property rights means that for designers and brands to stay on top, they must constantly innovate. Add to this the complex interplay of copying and variation between cultural and demographic groups, as well as the influence of technology, trade policy, and economics, and you've basically got an endless source of interesting developments.

One of the weirdest fashion incidents in recent memory occurred about a year or two ago and lasted for just a blink of an eye: a total convergence by most major fashion groups on a single item. North Face technical jackets somehow became totally awesome and cool among urbanites of all income and racial groups, young professionals, rural hippies and bohemians, established government and business professionals... the list goes on and on. I won't attempt to explain why this miraculous trend singularity happened, but it's fascinating to realize that each fashion group arrived at the North Face technical jacket by a different path, each with their own history and internal logic.

edit: spelling

Quote of the Week

"American hunting has thrived because it shuns the elitism and snobberies of the Old World. With each passing year, market forces have delivered weapons and gadgets that allow anyone to play Teddy Roosevelt, big-game hunter, further democratising the hunt. Yet to advocates of primitive hunting, those same forces--faster, easier, bigger--weaken the sport's Rooseveltian values, and help explain its slow decline. Thanks to bowhunting, recent trends have been on the primitivists' side. The juggernaut of commerce is now catching up. A very American contest looms."

That's from a fantastic article in The Economist's special holiday issue about bowhunting in America.

Hypothesis About Chinese Takeout and Christmas

Many readers might be aware of a somewhat tongue-and-cheek, possibly mythical tradition among Jews to order Chinese food for dinner on Christmas. Presumably its origins lie in the idea that most places serving Western cuisine are closed. Without having any data available, or really taking the time to look for any evidence whatsoever, it seems highly unlikely that this tradition, if it exists, would generate any offsetting bump in sales.

Even assuming the tradition is real and substantial, I'd guess that there's some big substitution effects and selection bias at play. It seems likely that the type of person who is going to: A) know about the tradition, and B) observe the tradition, is also the type of person who likes Chinese takeout a lot and eats Chinese takeout regularly. This means eating Chinese food on Christmas probably just substitutes with some other day of the week where it would have been ordered, resulting in no net sales increase.

Avatar: The Last Airbender is Stunning in it's Technical Perfection

Photo Credit: absoluteanime.com

Bear with me here. I know cartoon television shows aimed at kids eating Lucky Charms on a Saturday morning don't usually attract critical attention. Especially Japanese anime-styled cartoons. But by ridding yourself of prejudice regarding the appropriateness of viewing a lighthearted, solidly un-hip kids show, you may walk away thoroughly impressed. On several key technical dimensions, this show simply blows everything else away (including big-budget, high-concept cable and internet offerings).

A few takeaways:

1. Dialogue: More and more I'm coming to the conclusion that, outside of particularly skilled artistic circumstances (Tarantino etc.), good dialogue requires the periodic joke or comment that puts the viewer off-balance. Typically this means breaking out of the stiff formality of mundane plot-furthering dialogue and having characters say something that's believable from a real-world perspective. Similar to breaking the fourth wall, dialogue that makes me think "I would respond in a similar way" heightens focus and spurs reflection in an intellectually rewarding way. Avatar does this all the time.

2. Humor: Viewers who have difficulty enjoying anime--or cartoons in general--might not appreciate Avatar's humor. The comedy style in anime (and to a lesser extent American cartoons) is quite well-defined with fairly strict conventions regarding certain emotional symbols and visual devices. Avatar adheres to these conventions, but employs humor that is slapstick and creative, offering a refreshing break from the dark- and dry-humor that dominates most narrative shows these days.

3. Story: Simply incredible. The show is built around a band of travelers seeking out various spiritual masters scattered throughout an ancient world. The protagonist, a sort of "chosen one" type figure, is a kid who was frozen in ice, seeking to correct the damage that's been done in his absence by an unconstrained militaristic empire. Exploring an impoverished world at war allows for a really interesting take on the moral ambiguity of truly desperate people willing to do anything to survive. A rich historical background is revealed gradually throughout the show.

4. Characters: Every single episode furthers each character's development. And, amazingly, bit characters develop fast and actually return. This is one of the most unique and refreshing aspects of Avatar. The show is built around three seasons but one main story. Each show is variable in it's weighting towards furthering the plot, but in no way does it split between "monster of the week" episodes (to borrow X-Files' formula) and mainline plot episodes. Almost every character is pretty original, which is a feat.

5. Philosophy: Avatar mostly concerns the training of young warriors in various magical martial arts disciplines. What's impressive is the way Avatar infuses real-world philosophy and spirituality into its zany cartoon world. Brahminism, Shinto, warrior folk religions, various branches of Buddhism (Tibetan Buddhism is represented by the "air" caste which resides in cloistered mountain monasteries) are all readily apparent.

6. Correct Use of Aww: This is a pretty new concept that's been popularized by the internet. Employing cute animals to trigger the emotion of "aww" is quickly developing to rival in importance the old mainstay artistic categories like humor, drama, and action. Animals are important devices because their endearing ignorance and purity is used as a foil: when things get too serious they pleasurably jolt the viewer and make everything light-hearted. While related to humor, cute animals are something different. Avatar uses animals and the concept of "aww" to great effect.

7. Style: Most great cartoons try and carve out a unique style, and Avatar succeeds in a curious way. The animation isn't unique at all, but the show still conveys a strong sense of style through creative world-building. The setting is essentially a fictional amalgamation of stylized Asian indigenous cultures. The series winds its way through a detailed anthropological exploration of architecture, clothes, spirituality, and martial arts styles. Additionally Avatar is filled with quirky stylistic easter eggs that add depth and texture over many episodes. For example, most every animal in the show is a comical combination of two real-world animals, like a "pig bear" or "cat owl". It's just incredibly weird.

8: Deepness of Theory: I don't really know how to describe this aspect of the show, but it's the #1 thing that stood out to me when compared to other great cartoons. It's sort of like the combination of a) logical consistency within the fictional world and b) attention to detail. The magic/martial arts they invent in the series involve the ability of certain individuals to manipulate elements using specific martial arts techniques. In most cartoons, magic and superpowers are used only in order to have cool action and maybe a bit of character development. This almost always leads to there existing logical applications of superpowers that never show up on camera. Avatar fully explores the limits of the fictional world they've constructed, so if you say "well if you can control water why don't you manipulate blood," this actually pops up in the show. Maybe call it "logically extensive world-building" or something.

9: Good Vocabulary: The advanced concepts and general lack of dumbing-down is great.

In general the core idea of merging fantasy magic with Asian martial arts techniques is a damn good one, and allows for tons of creativity. But that's not entirely why the series succeeds. The idea of world-building within one culture and then dividing it up into four sub-cultures all based around simple-to-understand elements (and the commonly-understood emotional associations with these (e.g. air = free, fire =  rage etc.)) makes a basic model of culture that facilitates the exploration of differences. The main themes of Avatar: war, diversity, importance of history, duty, honor, violence vs. nonviolence, importance of family and love, exceptionality vs mediocrity, competition between freinds etc. are all complicated, but Avatar flawlessly navigates this terrain. Not bad for a Saturday morning cartoon.

Information Nexus

1. Article: People are still trying to get animals some legal rights

2. Video: Why hasn't a sitting mayor ever become president?  The rest of this fantastic series here

3. Blog Post: How can all-you-can-eat buffets exist? (nobody really knows) Also the comments are amazing

4. Podcast: The future of implantable technology

5. Comic Strip: Calvin & Hobber combined with quotes from Dune

Patent Pending: Guinness Book of World Records Science Museum

I recently stumbled across another article about the quietest place on earth (this room gets periodic internet coverage), and it really made me want to check it out to see how long I could last. It got me thinking that since I'm probably not the first person to have this thought, perhaps there's an opportunity there.

Providing ultra-quiet spaces for meditation and curiosity satisfaction wouldn't be realistic by itself (unless there's some really amazing DIY soundproofing out there), but bundled together with other competition-based science demonstrations, one could likely create quite a draw. Manhattan's promising Museum of Mathematics is tragically underfunded, but its best exhibits are those where a specific optimal outcome is explored and achieved only through an understanding of the underlying science.

Extending this idea of "the science of limits," one quickly sees the synergy with Guinness' powerful world records brand. Allowing paying (or suggested-donation-giving) customers to learn about and compete for world records on the spot could be an amazing educational and brand-building opportunity. In addition to trying your hand at total silence, one could imagine visitors racing against projections of Usain Bolt's world record 100m, reciting memorized digits of pi, programming rubik's cube-solving robots, or singing on pitch.

An Example of Good Government

Globalization and has exposed us to terrible risks
Photo Credit: improve.com

I tend to take a pretty cynical view towards government and the policy process in general, so it's important to highlight the occasional example of things going right. The FDA recently declared its intention to raise the cost-benefit bar for antibacterial soaps, forcing manufacturers to prove their health benefits.

Basic economic theory holds that when markets fail, government's role is to step in with a corrective. Classic examples might be antitrust rules (preventing monopolies), the Toxics Release Inventory (reducing information asymmetries between employers and workers), and taxes on alcohol (forcing prices to reflect the true social cost of goods).

Reducing the quantity of antibiotics floating around by making their production and distribution more costly is a perfect case of government action. Individual pharmaceutical firms don't have to bear the full social cost of increasing antibiotic-resistant bacteria, so they produce more antibiotics than is optimal. The FDA is internalizing this externality. Although antibiotic-resistance is a problem in the here-and-now (reducing the efficacy of drugs), its real harm is to increase the tail risk of global pandemics. Such low-probability, high-impact events are often overlooked in public policy, so it's refreshing to see some action on this front.

Facebook Isn't Doomed

Jay Yarrow in Business Insider today had an interesting piece on Facebook, saying it's doomed because sleeker one-function apps like Snapchat and Twitter will crush its individual services, which are complicated and burdened by the need to all fit together. This is certainly a real problem, but I think he underappreciates the resilience of Facebook's position and the simplicity with which the issue could be fixed.

Facebook has a tremendous advantage simply by being the first, biggest, and most popular social networking service. Good networks are all about scale, and Facebook remains the most important medium for maintaining relationships across time and space. Additionally, by bundling together different services, Facebook insulates itself from the failure of any single one. This allows time to adapt and incorporate whatever innovation an upstart competitor may have created. The rise of Twitter was a major challenge for Facebook, but its existing customizable profile pages, simple messaging service, and weird "poke" thing remained enjoyable enough to allow the rejiggering of the "wall" into the Twitter-like news feed.

The issue of too many functions creating too much noise could possibly be corrected with better sorting algorithms or design, but here's an even simpler solution: break Facebook into chunks. If problems arise when many different services have to be packed together on the same webpage or application, why not release a bunch of apps that do just one thing? Have a "profile viewer" app, a messenger app, a photo app, etc.  By erecting optional barriers between Facebook's different services, it could partially replicate the design advantages of its competitors. Having a number of minor Facebook apps would also allow experimentation with different color schemes, something that might be helpful in establishing a sheen of "newness" for all those cool-hunting kids.

Epigenetics Can Help Fix Nutrition Science

Aeon recently posted a great essay critiquing the popular 'selfish gene' analogy, exploring new layers of complexity biologists have since uncovered within the process life uses to propagate itself. One of the hottest new concepts has been 'gene expression' or epigenetics. It's basically the insight that not all genes affect their organism in the same way; some heritable changes can occur that aren't caused by changes in DNA sequence. This promising new field muddles the nature/nurture question in a most intellectually-rewarding way.

One of the greatest potential applications of epigenetic thinking is in the field of nutrition science. Explaining exactly why someone's body fat percentage is what it is remains a murky and contentious area, ironic given the global obesity epidemic. Much of the confusion stems from the difficulty in parsing out heritable effects from lifestyle and cultural factors. As an example of the theoretical clarity epigenetics can provide, consider this question that I've long wondered about (and never found a satisfactory answer to).

Most people agree body fat percentage is in part driven by heritability: kids tend to share the body type of their parents, and we all know people who can eat whatever they want and remain skinny. This heritable component likely contributes to the difficulty people experience when trying to change their basic body type in a sustained way.

So here's my question: say you have a heterosexual couple, both with a propensity to fatten, and they've lived much of their lives overweight. If they had a kid, odds are the kid would share this propensity. Now consider what might happen if the couple decided to buckle down, lose weight, and get in shape. What would happen to the kid? The parents' genes certainly haven't changed, so one might expect the kid to still be cursed with a propensity towards accumulating body fat. But it seems strange to imagine, say, parents who've been thin and fit for 10 years having a kid with a propensity to fatten.*

Epigenetic effects can help explain why this scenario seems unlikely: after 10 years of thinness, the parents have probably undergone major biological changes that are somehow 'locked in' and get passed on to their children.

Hopefully researchers will someday be able to understand the exact dynamics of interactions such as this. If we knew definitively, for example, how long parents must sustain weight loss in order to gift a thinness propensity to their children, it would be a tremendous benefit to society. One can easily imagine compassionate parents being strongly incentivized to lose weight and get healthy themselves in order to enable their children to live better lives with greater opportunity.

*admittedly there's some confounding effects here: parents who are able to make big lifestyle shifts like sustained weight loss probably are insane fitness nuts who are likely to influence the behavior of their children

Quote of the Week

"The crux of the problem is that our national data systems and the social facts they produce are based on a normative view of economic and domestic life as stably situated in households. As a  result, people who are institutionalized, unstably housed, or tangentially connected to households are commonly overlooked in statistical portraits of the American population.

 In this book, I show how inmates and former inmates are categorically and systematically excluded from the data collection efforts that frame American social policy and social science research. Their exclusion clouds our understanding of the American economic, political, and social condition. Decades of penal expansion coupled with the concentration of incarceration among men, black, and those with low levels of education have generated a statistical portrait that overstates the educational and economic progress and political engagement of African Americans."

That's from the foreword of Invisible Men: Mass Incarceration and the Myth of Black Progress by University of Washington sociologist Becky Pettit. While biasing statistical data sets probably isn't the most consequential effect of mass incarceration, it certainly is shocking and a great example of the difficulty inherent in most large-scale statistical research. When Noam Chomsky talks about "objective" in the media and big governing institutions really meaning, "from the perspective of the rich and powerful," this is very much the type of thing he's referring to. For deeper look check out this fantastic EconTalk interview with the author.

Information Nexus

1. Must-Read Fukuyama of Political Decay
2. Solid Mashup of 2013's Big Pop Music Hits
3.  Minimum Wage Vs. EITC
4. Excellent Short Film on the Plight of Pine Ridge Indian Reservation
5. Does Nelson Mandela Prove That Leaders Matter? and this Response

Reviewing Movies From 10 Years Ago is Risky

Ed Power in Slate has an interesting article today critiquing New Zealand as the filming location for the Lord of the Rings trilogy, basically arguing that Middle-Earth is described in the books as much older and darker than New Zealand's geography allows for. I'm fairly agnostic regarding the importance of fidelity to source material in film adaptations (there's much to be said for stylistic differentiation and uniqueness of vision), but he makes a good case--almost.

Setting aside the obvious fact that Peter Jackson's representation of Middle-Earth was driven by many more factors than simply filming location, I think Power falls into a fallacy that's common in reviews for movies released a long time ago: he evaluates decisions made 15 years ago using the film standards of today. While the passage of time occasionally allows positive and negative truths to emerge by filtering out noise (judging presidents, for example), in this case it warps his analysis by setting up an unfair standard.

Critiquing the Lord of the Rings trilogy as insufficiently dark and gritty ignores the effect the films themselves had in establishing that very expectation. The films were major global hits that shifted the trajectory of fantasy moviemaking towards gritty epicness, setting the stage for the current state of gloomier, quieter fantasy. Lord of the Rings was plenty dark when it came out, and it's unfair to claim it didn't go far enough.

Note: Although the Hobbit movies are being released now, fundamental decisions like filming locations and cinematographic style are essentially locked-in from the previous trilogy.

The Planet Money T-Shirt is Going to Have a Huge Black Market

Planet Money, a fantastic radio show/podcast/blog popularizing economics has recently been working on a cool project following the complete supply chain of a simple branded cotton t-shirt. The idea is an extension of the book Travels of a T-Shirt by Pietra Rivoli that many of us probably read in an introductory macroeconomics class.

Delivery of the shirts is fast approaching, and naturally the coverage and publicity of the endeavor is increasing. Strangely, however, only people who pre-ordered the shirts months ago during the very earliest phase of the project will be able to purchase them. If you've recently been turned on the the show, or are just now hearing about these t-shirts, you're out of luck. My prediction is that the buzz surrounding these shirts will generate considerably more demand than the fixed pre-ordered stock, creating a financial incentive for certain enterprising econ nerds to resell them on a secondary market.

I suspect that encouraging this behavior may have been the Planet Money team's plan all along, and covering the secondary market would be a great opportunity to do a show on price discovery and the role that prices play in revealing information about consumers.

Is the New Mobile Tech Trend Solving or Bypassing the Real Problem?

This guy understands it's not all about energy efficiency
Photo Credit: ironman.wikia.com

Wired this week had a few good articles about a hot new (old) trend in the mobile tech arena: passive wireless communication between devices. Apple has a new system call iBeacon, and Foursquare is using clever programming to allow phones to automatically check-in. In both cases, the primary innovation is the reduction of battery drain. Seamless passive communication is a key step towards realizing the 'internet of things' and rebooting the failed Grafedia idea, so hooray.

Limits on energy storage have long been a limiting factor preventing engineers from packing ever-more goodies into mobile devices; lithium ion technology and micro-fuel cells are steadily improving, but not keeping pace with other design areas like miniaturization and heat regulation. Squeezing more utility out of existing batteries is great--it's maintaining the pace of advancement everyone's come to expect from mobile tech. The story of human progress has largely been one of increasing energy efficiency.

But in a certain way this trend represents progress along the wrong margin: the real problem is inadequate energy production and storage technology. Even the cool powermats that allow wireless charging are attempts to get around this nettlesome limit. Nearly all historic predictions about the future failed to recognize the great advances we've made in communications and information technology, instead emphasizing the wondrous gizmos enabled by a world of unlimited free-flowing energy. I'm glad I live in a world brimming with social and cultural change, but to truly realize the sci-fi future we've all dreamed about, we'll need more than awesome energy efficiency.

Unionization is Tough at the Low End

Wonkblog has an interesting and somewhat rambling discussion of the various troubles at one of the nation's biggest unions, IAM. The end contains an interesting nugget about some of the underlying dynamics of decreasing unionization in the US:

"If you're trying to organize a new group, it's usually a low-paid group, and how are you going to tell them they have to pay $70 a month, and they don't know what for?" Asuncion said in an interview. "It's the dues structure that's killing us."

I often hear liberals talk about the failure of workers at the low-end of the skill/wage spectrum to unionize and how it's an error of short-term thinking, but I think this quote is telling. Although low-wage jobs have less turnover than one might expect, not supporting unionization may very well be a rational economic calculation. Unions provide economic benefits to their workers in a less concrete, more long-term way. Dues, on the other hand, are paid monthly and take a greater share of total wages the lower you slide on the income scale. Add to this that the primary weapon of unions--the strike--is a potentially devastating strategy for low-wage workers who are struggling to get by each month. If employers know that strike threats have no teeth, the bargaining position of unions (and the benefits they can promise) becomes shakier. Additionally, an increased emphasis on organizational culture and employee engagement by business undercuts some non-economic functions of unionization, such as establishing a shared identity, improving workplace conditions, and aggregating information from lower organizational levels.

On a semi-related note, many professional athlete unions have difficulty bargaining with owners because their strike threats are equally romantic: if nearly all of your total lifetime income is made within just a few years as a sports star, losing just half a season is potentially very costly.

Absurd Protectionism in the Sugar Industry is Great!

The Washington Post recently had a horrifying report on the domestic sugar industry, which through political influence has managed to establish itself as a resilient rent-seeking coalition. Government protection via price controls, import quotas, and loan guarantees raises prices, enriching manufacturers while hurting consumers and impoverishing foreign producers. It all sounds pretty terrible--your classic public choice dilemma, right?

While it's true that this regulatory kludge makes almost everyone worse-off by economic standards (real income, productivity, growth), I can't help but see a paternalistic silver lining to the status quo. The state of nutrition science is increasingly converging on the idea that sugar is astonishingly damaging to individual health and is a primary driver of the epidemic of metabolic syndrome and its associated ailments (obesity, diabetes, Alzheimer's). While I haven't studied the elasticity of consumer demand for sugar, typically when you make something more expensive, you get less of it (though not always!).

The social and economic benefits of consuming less sugar are probably huge, and certainly under-appreciated. Having a healthy and vigorous citizenry is a virtue in and of itself, but also enhances the capacity of people to pursue and realize their own goals. A simple tax on sugar would be vastly more socially and economically optimal, but given the current sluggishness of our legislative branch, I'll take what we can get.

A Feminist Defense of the Taxi Cartel

In most major US cities, the taxi industry is highly regulated, mandating all sorts of service standards and ownership rules. Unsurprisingly, many of these rules seem to be designed to restrict the supply and innovation of new market entrants, thereby protecting incumbents (taxi drivers and taxi companies) by keeping prices high and revenue streams secure. The flip-side of this arrangement is that for most people, getting someone to drive you around in a car is more difficult, more expensive, and less convenient than it otherwise would be.

With the rapid adoption of smartphones, a few upstart companies (Uber, Sidecar, Lyft) are attempting to break into the field, offering consumers the promise of radically convenient transportation options through gps-hailing and ridesharing. These innovations threaten the high wages of incumbent taxi operators, and currently an ongoing political battle is being waged in cities across the country to negotiate the entry and potential disruption of the industry.

In general I've been very sympathetic towards the disruptors: they're bringing technology to an outmoded industry, they're helping usher in the 'service-and-flow' economy (also known as the sharing economy), and most importantly they're helping to increase the real income of city-dwellers by reducing the price and increasing the accessibility of transportation.

Most of the pushback I've heard defending the status quo typically revolves around either concern for the livelihoods of taxi operators, or safety. The first point is silly: existing taxi operators have no substantive claim on special wage supports compared to any other service sector, and the gains realized from reform would mostly flow to consumers, of which there are many.

Up until recently, I've been content to brush off safety concerns as basically a 'bootlegger and baptist' phenomenon: cartel defenders talk about ensuring minimum safety standards and the moral solemnity of taxi drivers, but that's just a marketing ploy to keep themselves well-protected from competition.

However, in a recent conversation on this topic I was a bit thrown off by a safety-based argument I hadn't truly considered: that because I was a man my framing and analysis of this issue had led me to undervalue the potential safety issues of a more unregulated taxi industry. The habit of getting into a random car with a total stranger without a second thought is a social achievement that's been built up over time in part because of government's explicit backing of taxi operators. Any potential change in this situation runs the risk of undermining the relationship of trust implicit between taxis and riders. It would probably only take a few highly-publicized murders or sexual assaults for a new unregulated technology-mediated taxi industry to lose trust and collapse.

Information Nexus

1. Explaining the Economics of Star Trek and a Response
2. Answer to a Question Everyone's Surely Asked
3. Skeptical Take on the Guaranteed Income Idea
4. Nice Analysis of the Bicycle Dilemma (and good hyperlinks too)
5. The Math Mutation Podcast Covers Arrow's Theorem

Mike Luckovich

Neologism Watch: Sousveillance

Jerry Brito this week has a great column on the idea of "sousveillance":

"Sousveillance is the recording of an activity by a participant in that activity, and it can be thought of as the inverse of surveillance. The word “sur” in French means “over” or “above,” hence surveillance is “watching from above” or “overseeing.” The word “sous,” by contrast, means “under” or “below.” To date, “veillance” has only been available to the powerful–whether through corporate or government CCTV cams perched atop buildings or utility poles–but with the advent of cheap wearable computers we will all soon be able to point a camera back at the powers that be from below."

Rapid adoption of technologies like smartphones, drones, and small wearable cameras really does necessitate an unpacking of the concept of veillance into more specific sub-categories. Sousveillance is creative, and provides a nice logical opposite to big institutional observation and recording. There's clearly still space in the middle, however, that remains undefined and murky. What should we call veillance that's carried out by individual participants but sponsored and organized by big institutions (Google maps, or police squad car cameras)? What about sousveillance that's collected in a disorganized distributed way but aggregated by central institutions?

Judge Pushes Back Against Nuclear Waste Regulatory Kludge

The question of what to do with nuclear waste has long bedeviled policymakers and industry participants. The stuff has been stored on-site in temporary pools since the 1980s, but power companies have been steadily paying into a government fund to develop a long-term solution. Most of the money has been spent researching and building a proposed geologic repository at Yucca Mountain in Nevada, which was cancelled by President Obama (a move undoubtedly driven by Harry Reid's clout and Nevada's early place in the presidential nomination process). It's an excellent example of kludgeocracy in action: no political majority exists to stake a risky position on changing the status quo, so we're left with an increasingly outdated and dangerous waste storage policy.

But in a rare move of governmental sanity, a federal judge ordered a halt to the collection of the storage tax:

"A federal appeals court ruled Tuesday that the Energy Department must stop collecting fees of about $750 million a year that are paid by consumers and intended to fund a program for the disposal of nuclear waste. The reason, the court said, is that there is no such program."

An interesting question now is whether this development will help or hurt nuclear energy's competitive prospects. On the one hand electricity generated by nuclear fission becomes cheaper, albeit marginally. On the other hand, the industry finally loses all pretense of on-site storage pools as "temporary".

Nuclear energy exists within an insane regulatory thicket of competing and contradictory subsidies and hindrances. Action to combat climate change and institutional links to military research helps the industry. Conversely, the ban on waste reprocessing (established after India detonated a bomb built from reprocessed spent fuel) severely limits the creation of a safe nuclear energy industrial ecosystem.

Halting the storage tax is a small step towards simplifying everything, but it seems that until cheaply available space flight opens up a safe alternative to geologic storage and reprocessing (shooting waste into the vastness or sun), we're stuck with a situation that's becoming increasingly dangerous and unsustainable.

The International Space Station is Valuable, But Not For Scientific Research

Photo Credit: Popsci

Premier political science blog The Monkey Cage (now at the Washington Post) has a nice analysis of the research contributions of the International Space Station, showing a definite trend towards increasing scientific output. This bucks a set of conventional wisdom that sees the ISS as basically a massive waste of public funds. According to critics, manned space flight is an inefficient way of doing science in space--robots like the ones currently cruising around Mars are just as capable but at lower cost and risk. You know what? I agree. But that's not the point.

The history of space exploration has its origins in the timeless human virtues of competition, exploration, and greatness. Scientific research as its driving purpose came later, after the cold war, after easy appropriations and political clout dried up. The obvious link between the scientific community (necessary to build rockets and spacesuits) and space exploration made "research" an obvious marketing strategy to keep money flowing. But for the millions of kids and adult dreamers who are inspired by NASA and the story of humans pushing the last frontier, publishing statistically significant research results are at best a nice byproduct.

Space exploration is valuable for its own sake because it's one of the clearest examples of humanity flourishing on a global scale. With this in mind, the observation that ISS is producing more and more scientific research actually reveals a deeper accomplishment: we're getting better at keeping people alive in space. The true success of ISS is generating operational know-how about living in space. The less time ISS crew devotes to maintenance, repairs, upkeep etc., the more time they have to do other activities, like science. But who's to say that research is the best way to spend that space surplus? If robots can do the scientific stuff better, perhaps tourism or asteroid mining or competition for historical greatness is a better use of space-time.

Information Nexus

1. Interesting Idea for the Publishing Industry (via Marginal Revolution)
2. James May on Space Elevators
3. Legal Confusion about Rent Control and Bankruptcy
4. The "Dreaded Third Thing" Pops Up in Statistical Tests of Democratic Peace Theory (This time its geography)
5. Beautiful Aerial Shots of Germany

Is Nutrition Science Undergoing a Paradigm Shift?

Robert Lustig made a splash a while back with his claim that sugar is toxic. Since then the pushback against the popular account of the causes of the obesity epidemic has grown larger and more vocal. This fantastic video is a nice reformulation of the basic critique:

It's all very compelling, and Lustig has put greater emphasis this time around on the epistemology and methodology of his claims, which is great. His focus at the end on health policy and decisionmaking under uncertainty is a more controversial step, explicitly making the leap from scientist to advocate.

Capitalism Will Soon Bring Artisanal Pumpkin Spiced Lattes to the Masses

Quartz this week has a shockingly in-depth look at the current state of automated coffee-brewing machines, and their prospects for disrupting Starbucks-model coffee chains. While it's a fascinating question where the savings might flow if cafes start ditching expensive paid workers in exchange for robot coffee kiosks (bigger stockholder dividends vs. comfier couches and faster wifi), the big social gains from these machines will probably be found in quirkier areas.

Starbucks did humanity a great service by making upscale customizable coffee relatively cheap and convenient. But its reach has always been limited by the demands of running physical locations with upkeep and staffing and supply chain constraints. Recent drops in the cost and size of capsule and automated coffee brewing systems (already common in nice restaurants and hotels) promise to fulfill the dream of making great coffee available everywhere. Soon every small town with insufficient demand to sustain a Starbucks-model cafe will have impressive coffee-brewing capability (in diners, gas stations, etc.).

The most obvious market opportunity for advanced coffee robots is the airline industry. Airplane coffee is notoriously weak and terrible, and efforts to establish brand relationships with major coffee companies are half-measures. The ability to order an extra-shot soy latte while hurdling through space in a metal tube would be an historic accomplishment, and likely a big money-maker. Budget fliers who are hesitant to plump for expensive food and and alcohol might see splurging on nice coffee as more acceptable.

Important Thing To Remember About Foreign Aid

In reviewing an important new book in the popular literature about foreign aid, political scientist Chris Blattman makes a great point:

"Aid isn't a uniform mass. Deaton knows this, and my guess is he's talking about a particular kind of aid. I don't think he means emergency relief for disaster and conflicts. I don't think he means the money behind peacekeeping forces and post-war assistance. He might exclude child sponsorship. I'm guessing he's not talking about money spent on vaccine research in the West. He might even exclude support for elections and party-building and other democratization."

This nuance often gets lost in the marketing scrum surrounding foreign aid commentary, but is an important insight that critically reduces the issue's partisanship. Less partisanship over foreign aid allows coalitions to form that cut across the noxious Republican-Democrat divide. Novel and easily-changed coalitions allow good policy to be tested and scaled up, and bad policy to be eliminated quickly. The more the "foreign aid" concept is put into a simplified, homogeneous box, the easier it is for political entrepreneurs to employ it as just another weapon in our partisan total war.

Foreign aid should be understood as merely a convenient shorthand for all manner of social, economic, and political transfers occurring between countries of varying levels of development. Under this conception, issues not typically considered "foreign aid" would benefit from its relatively nonpartisan identity and moral seriousness (immigration), and also classic mechanisms of foreign aid might be better exposed as merely tools used by established political and economic interests to pursue their private goals (food aid, geopolitics).

Just as "regulation" can't simply be added up--some areas have too much regulation (occupational licensing), others too little (environmental degradation)--foreign aid encompasses effective resource flows and ineffective ones, depending on the goal. Only by being clear about what we're talking about for a given aid program or policy can we make real progress towards achieving a sufficient level of development for everybody.

Quote of the Week

"There are no doubt some things available to the modern workman that Louis XIV himself would have been delighted to have--modern dentistry for instance. On the whole, however, a budget on that level had little that really mattered to gain from capitalist achievement. Even speed of traveling may be assumed to have been a minor consideration for so very dignified a gentleman. Electric lighting is no great boon to anyone who has enough money to buy a sufficient number of candles and to pay servants to attend to them. It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to the rich man. Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls in return for steadily decreasing amounts of effort."

That's from Capitalism, Socialism, and Democracy by Joseph Schumpeter, page 67.

5 Pointz is Being Demolished to Make Way For Condos, and That's Okay

Photo Credit: deathandtaxesmag.com

In a long-awaited move, the owners of the iconic graffiti space 5 Pointz have finally cleared the last regulatory hurdles required to tear down the building. The land will be replaced with high-rise condos and some affordable housing units.

Undoubtedly some groups are upset. 5Pointz is an amazing example of skilled artists collaborating semi-spontaneously to create a beautiful amalgamation of art. But the disruptive logic and churn of urban evolution and growth is ultimately a greater boon to society, and I see this development as positive for New York, and the graffiti movement.

For one, the Long Island City neighborhood has seen tremendous gentrification and associated housing cost increases. LIC desperately needs new units to relieve this stress, and for all its amenity value, 5 Pointz is ultimately a fairly passive block of unused space. Additionally, dealmaking seems to have ensured that many individual surfaces will be preserved and displayed.

Rules that limit development, such as height caps and historic preservation designations, clearly have an important role in creating great cities. But often these powers are excessively utilized by incumbent residents and landowners to block changes, muddling the clarity of property rights. If a site like 5 Pointz is truly valued as an artistic work, artists and appreciators should "vote with their pocketbook" and pool their money to buy the land for preservation. If preservationists can't compete in an open bidding process, there's a strong prima facie case that preservation isn't the socially optimal use of the space. Market outcomes tend to allocate land efficiently, and overriding this useful mechanism should require exceptional social consensus.

On another note, excessive preservationism seems quite intellectually opposed to the essential character of graffiti culture. Part of what makes the graffiti enterprise subversive and exciting is its outsider perspective: artists critique the establishment by abusing written rules in adherence to deeper social norms about freedom and public acceptance. Aggressively employing institutional tools to preserve in amber artwork that revels in its own impermanence and material resourcefulness reeks of contradiction. Graffiti is about supplementing the artistic and public spirit in cities, which often gets undersupplied by capitalist land use and architecture. This works best on marginally productive surfaces, and once higher-value uses get identified and implemented, artists should gracefully step aside and move on.

Besides, I suspect the developers will face a massive onslaught of protest graffiti for some time as attached artists mourn 5 Pointz's destruction. Perhaps that's a healthy informal punishment for destroying such an impressive artistic site.

Studying the Economic Lives of Poor People is Important

This week's Economist has a fascinating article about the economic logic of owning cows in rural, poor India that everyone should check out. The findings are a great example of the continuing the trend, popularized by Abhijit Bannerjee and Esther Duflo in their book Poor Economics, of looking at the actual fine-grained details of the economic decisions poor people make every day, and how they differ from those of rich-world consumers. Often these findings are counter-intuitive, but have big implications for development and aid (such as the preference for fewer tastier calories over bags of cheap rice). This approach contrasts with the top-down "big push" idea (promoted by Jeffrey Sachs most notably), which has seen its popularity wane in the face of powerful critiques emphasizing "Big Aid's" planning and public choice problems.

While it's possible these small-scale studies (and associated policy recommendations) will someday aggregate into a larger theory, the epistemic humility is actually a strength--interventions are more assuredly useful, and unforeseen consequences have limited scope for causing damage.

Information Nexus

1. Excellent Analysis of Walmart's Wage Structure

2. A Bohemian Urban Planner's Wet Dream, but Useful & Creative Nonetheless

3. What a Week of Groceries Looks Like In Different Countries

4. Must-Read Structuralist Explanation of Our Political Dysfunction
5. German Political Platforms Represented With Miniature Dioramas

Happiness is a Side Effect, Not an Outcome to Pursue

Adbusters Magazine must be spinning in its grave vegan-powered washing machine. That was my first reaction when I saw that the tiny country of Bhutan is scrapping its emphasis on "gross national happiness" as an alternative to GDP. Bhutan has gained a strange notoriety in various leftist circles for fully embracing this weird and subjective measure, but it never quite lived up to its intellectual appeal.

The idea that GDP doesn't measure everything a country (and its citizens) cares about is self evident. Measures of environmental quality, capabilities, inequality, and the millennium development goals are all attempts correct for this basic fact. And clearly happiness is good and countries should want their citizens to be happy. But focusing on happiness is a bit like cheating: it ignores a lot of necessary complexity by trying to skip directly to the end of the game.

For one, making interpersonal comparisons of happiness is tricky. For example, the conventional wisdom that the richer people get the more leisure they enjoy is not always what we observe. As incomes go up, the opportunity cost of not working increases, making leisure more costly. Decisions individuals make about how best to pursue a good life are often idiosyncratic and counter-intuitive.

Most generally, actively pursuing end goals is often not the most effective way of achieving them. In situations with high causal density, simple intermediate goals inform decisions about process much better. A nice example might be the values caring parents try to instill in their children. Constantly emphasizing happiness or "doing what you love" is very likely less effective at promoting long-run flourishing than an intermediate process goal like "try your absolute hardest at whatever you do" or "never give up". Nobody would suggest that "grit" should be the goal of life, yet those who have it in spades invariably have better life outcomes.

Similarly, GDP seems to work pretty well as this sort of intermediate process goal for countries. Nobody truly believes GDP is an end in itself, but because it sits at a nexus of many causal factors, it's a natural concept for public policy to prioritize.

Begun, the State Brand Wars Have

As the health reform law exchanges get closer to launch, we're seeing an interesting burst of marketing creativity that shines a spotlight on the various cultural items that differentiate U.S. states in the public imagination. Sarah Kliff reports on Minnesota's playful new "MNsure" marketing campaign which features a slapstick Paul Bunyan and the slogan "land of 10,000 reasons to get health care" (a play on "land of 10,000 lakes").

Given the unavoidably positional nature of state identity, I do wonder how the folks in the Minnesota state tourism office are holding up. When I hear "10,000 reasons to get health care" and see lots of images of horrible accidents involving Minnesota-centric activities, vacation alternatives along the lines of beach-lounging in Florida start seeming relatively more attractive.

edit: New York state's got a decent pitch also.

Information Nexus

1. Article: The Allure--And Danger--of the Solitary Life
2. Video: Incisive News Analysis on the NSA and Whistleblowers
3. Blog Post: Jacob Schak On Demographics and the Republican Party -- Part II and Part III (recommended)
4. Podcast: Planet Money Continues its Direct Cash Transfer Kick
5. Interactive: Ridiculously Awesome "Create Your Own Complete Street" Web Game (more info here)

Ingredients of a Good Bike City

What would Jesus ride? Photo Credit: backalleybikes.wordpress.com

The idea of identifying "the best bike city in America" (or something along those lines) is one that pops up with a fair degree of regularity. But what exactly does it mean? Most traditional rankings look at certain urban amenities that support the enterprise of bicycling, with some taking into account slipperier factors like observed biking levels or motivation. In fact these two approaches are linked in a complex relationship that makes simple list-making tricky. What we're really looking for is the capability to flourish on a bicycle: what cities enable the ability for anyone to employ well the bicycle to pursue their goals of living a good life. A few thoughts on some relevant bike city elements:

1. Bike Lanes: Clearly these are nice, and make everyone feel safer. The amount of bike lanes is easy to measure and easy for politicians to brag about, but what's more important is the quality. Is the paint fading? Do they disappear and pick up again on the other side of the street? Are they separated by medians or parked cars, or do they hug the edge of the road, forcing cyclists to make the no-win choice between exposing themselves to either dooring or collisions from passing motorists. Consistency in bike lane design is massively undervalued. Do they go along sensible, efficient routes? Also, do they get cleaned? I've personally been excited for the construction of a new bike lane only to see it fill up with gravel, broken glass, and puddled water. Upkeep matters.
2. Road Quality: This doesn't get a lot of attention, but boy does it matter. Smooth, well-paved roads make biking dramatically more enjoyable. Safer too: fewer obstacles in the road means a less-erratic riding line. Big east coast cities are old, with crumbling infrastructure. Younger cities experiencing population booms out west probably have better roads.
3. Density: In the broad scheme of things, this is the most important factor influencing the quantity of cycling. Simply put, if you live in a rural area, you won't be able to substitute biking for driving due to the large distances between stuff. But average population density can also be misleading; what really matters is architectural density. Los Angeles has an impressive average population density, but the road-centric urban form makes cycling less appealing. Philadelphia has a tight, cramped city core that limits the speed and craziness of drivers, making cycling dramatically more enjoyable. 
4. Weather: The influence of weather on cities is tricky to measure. One can say that, all thing equal, warmer cities are better for biking. But in reality there are simply not enough big cities in each climate to cancel out all the effects from other factors like urban form, history, culture, politics, etc., so we'll never know.
5. Norms: Do drivers and cyclists have a respectful or adversarial relationship? Do motorists and pedestrians regularly occupy bike lanes? Norms receive a lot of attention because they play into the "style" and "identity" of notorious bike cities like Portland and Amsterdam. No doubt this factor exists to some degree. But much of what we assume derives from some special cycling je ne sais quoi actually comes from other factors. The more people who cycle, the more well-trained motorists and pedestrians will be to notice them. Variation in local traffic enforcement rules also structures the decisions of motorists and cyclists. 
6. Psychic Torment: Perhaps the best way to identify great bike cities is to look at the actual experience of riders themselves. For some, cycling is terrifying. For others, it's a delight. Why not just ask people!? The popularity of cycling as measured by public opinion polling surely varies by city. Throw in some survey questions like, "do you wish you could bicycle more, less, or about the same as you do now?" and you've got the makings of a sophisticated account of which cities are great for biking. A benefit of this approach is that it incorporates both the supply of bike amenities (like density and bike lanes) and the psychological profile of cyclists. Some hipster bike salmon are going to ride on any road, no matter what--do we really want to count those people when considering the best bike city?
7. Motivation: On a related note, should considering why people bicycle play a role in identifying great bike cities? Some people choose to cycle for recreation or exercise. Others may choose not to cycle because they're unhealthy, old, or obese and it's physically strenuous. Big east coast cities have tons of food delivery people zooming around on bikes for a paycheck. Some ride bikes because they're poor and can't afford other options. Underlying this is a deep question about what drives people's transportation decisions. Biking exists within a world of trade-offs between walking, driving, and public transportation (and their respective inputs like public transit quality and gas prices). We can't just look at cycling in isolation. If we did, we might get the perverse result of a good bike city simply being one where public transit is terrible and driving sucks. When we're looking for the best bike city, does it matter that people adopt cycling for the right reasons?

The bottom line is that there's no clear way to identify the best bike city. The supply of bicycle amenities isn't something that you simply maximize to win the title. Different people bike in different ways, for different reasons, and you have potential confounding factors like demographics: young, fit people cycle more, so cities with more of those people record higher rates of cycling compared to older, fatter cities.

Perhaps the best approach for evaluating different cities and their relationship to cycling is to compare them to national averages. Presumably some demographic groups (race, income, education, age, health, etc.) have higher rates of cycling in some cities than others. By aggregating many different comparisons, you could see which cities "punch above their weight" so to speak.

Quote of the Week

"Scientific forestry was originally developed from about 1765 to 1800, largely in Prussia and Saxony. Eventually, it would become the basis of forest management techniques in France, England, and the United States and throughout the Third World. Its emergence cannot be understood outside the larger context of the centralized state-making initiatives of the period. In fact, the new forestry science was a subdiscipline of what was called cameral science, an effort to reduce the fiscal management of a kingdom to scientific principles that would allow systemic planning. Traditional domainal forestry had hitherto simply divided the forest into roughly equal plots, with the number of plots coinciding with the number of years in the assumed growth cycle. One plot was cut each year on the assumption of equal yields (and value) from plots of equal size. Because of poor maps, the uneven distribution of the most valuable large trees (Hochwald), and very approximate cordwood (Bruststaerke) measures, the results were unsatisfactory for fiscal planning."

That's from Seeing Like A State by James C. Scott. It's a fantastic analytical history of the terrible damage caused by central planning initiatives throughout the twentieth century.

Federal Environmentalism Is Unavoidable

What are his thoughts on dependency ratios? Photo Credit: jacksonhole.net

I'm generally a big fan of environmental action by governments occurring on the state level. Policy and implementation can better utilize local knowledge, achieve a closer fit with local conditions, and experiment with a wider range of ideas. Politically, state-specific issues can create novel coalitions that cut across the calcified Democrat-Republican stalemate. But Sarah Keller in High Country News highlights a problem with this approach:

Wyoming Game and Fish’s plight is indicative of a growing dilemma for wildlife management agencies in sparsely populated, but wildlife-rich, Western states. Wildlife and habitat threats are growing, and agencies are increasingly charged with managing non-game species, dealing with wildlife diseases and invasive species, overseeing controversial predator reintroductions, and helping bring  young people into the outdoors. Meanwhile, the public’s outdoor interests are changing and becoming more diverse. Game and fish departments aren't just hook and bullet agencies, though hunters and anglers still provide much of their funding.

In Wyoming, 80 percent of game and fish’s budget comes from license fees, as well as federal taxes on hunting and fishing gear. But that license pool is shrinking. Ironically, wildlife managers have had to reduce Wyoming’s mule deer and antelope licenses as herds have declined, cutting into the very revenue that would help with studying those declines and improving habitat for the species.

This is a classic story of 'institutional drift': public policy not adapting to changing conditions in the world. In this case, state conservation agencies have bigger agendas than ever, but their funding streams are based on historical patterns of population and outdoor recreation behavior that no longer exist. Given the current trajectories of urbanization and climate change-driven environmental degradation, Western states are sure to see these sorts of mismatch issues intensify in the future.

Western states have a disproportionate share of America's environmental capital. Asking these states to shoulder an increasing burden of environmental management spending while their funding base shrinks raises equity issues. The fact that most federally-owned land is out West further reinforces the case for some sort of cross-subsidy.

Some might see a federal program of redistribution from high-population/low-environmental capital states to low-population/high environmental capital states as unjust. After all, much of the West's beauty and richness is highly experiential and hard to access from big coastal population centers. But given the uncertainty of climate change's effects, some risk-pooling seems appropriate. Additionally, America's environmental endowment is an integral component of the national identity, and deserves to be empowered regardless of population trends.

Architecture Break

The Pasona Group offices in Tokyo:

Photo Credit: Kono Designs

From an aesthetic perspective, Kono Designs has successfully implemented the "vertical farm" idea, playfully evoking the image of a standard office cube being inexorably consumed from within by wild nature. This contrasts with the tightly designed interior spaces, which seem to employ fully-functional agriculture plots as space dividers, artistic room accents, and stylish furniture substitutes. No word yet on the energy costs or food production efficiency levels, but its cultural fit and aggressive rejection of factory-chic make this building spectacular.

For more check out this short video by Monocle magazine.

Adaptation and Resilience Are More Boring Than You Think

For some time now, the hot new thinking in the areas of climate change and environmental degradation has been all about "adaptation": how political, economic, cultural, and biological systems will respond to environmental changes to minimize human suffering (or maximize human flourishing; pick your moral poison). This is in contrast to "mitigation" efforts, like enacting carbon taxes, which seek to prevent harmful environmental changes in the first place. "Resilience" is best understood as adaptation's conceptual cousin: how can we preemptively modify our political, economic, cultural, and biological systems to reduce the human costs of disruption caused by adaptation to environmental changes?

These concepts seem highfalutin, but they're not. In fact, they're so straightforward and mundane that examples abound in any daily newspaper. The Economist recently had a nice piece about how the fishing industry is splitting into two market segments: more efficient, more commoditized "aquaculture" (farming), and costlier, more upscale "capture" (wild). Also in the news has been the "in vitro" burger, a lab-grown synthetic meat product.

It's not just about community spirit guys
Photo Credit: baylocalize.org

The environmental dimension in these stories isn't immediately apparent. After all, these are simple technological changes that one might expect given the similar market dynamics at play. In both cases, we have shortages increasing (or threatening to increase) the price. In beef's case, increasing demand in developing countries is placing strain on available land. For fish, the ocean's collapsing ecosystems are reducing supply. That these market changes are terminal in nature creates a huge incentive for producers to develop low-cost alternatives.

But these two new production methods are also increasing the global food system's resilience. By decoupling the production process from nature (beef from farmland, fish from oceans), these products get less exposed to environmental risk. Adapting to future environmental changes, such as further ocean ecosystem collapse, or marginal farmland becoming unavailable, will be much easier. Beef and fish will still be around for consumption, preventing an economically (and culturally) painful transition away from them.

The more we recognize that existing, mundane market mechanisms are the channel through which most environmental adaptation and resilience will occur, the better off we'll be in confronting future challenges.

Reducing the Costs of War Increases War

Photo Credit: The Guardian

The controversy in some circles over the U.S. government's use of unmanned aerial vehicles (drones) for military purposes often seems to miss a major point about the effects of new technology on warfare. Some military technologies, such as the atom bomb, dramatically raise the destructive capacity of a nation. Others, such as drones, dramatically lower the destructive impact of a military decision by radically increasing the target efficiency of a given action.

In other words, some technologies increase the costs of war (nuclear weapons) and others decrease them (drones). Unsurprisingly, corresponding incentive effects abound. The unthinkable horror of nuclear war has undoubtedly contributed to the relative peace among nuclear powers. On the flip side, emerging drone technology has made tiny, "surgical" military actions incredibly easy, resulting in tons of tiny, "surgical" military actions.

To some, drones are heralded as a humanitarian victory for the world: the vital risk to soldiers and pilots is reduced. Seen in a different light, the increased "variablizeability" (i.e. costless scaling) of war is ominous to the extreme. By crashing the domestic political costs of military action down to nearly zero, drones can potentially beat out other less-violent alternatives in foreign policy dilemmas, such as statecraft or economic sanctions. One even wonders if a simple "drone fix" might become the go-to policy choice of unencumbered politicians.

The key point here is that war is not simply a question of easily-quantified costs and benefits. The act of one sovereign state exerting coercive force over another has strong moral, psychological, historical, and cultural dimensions and associations. These other facets of war don't necessarily track with simple physical destruction: one bomb fired by a robot killing one person might nonetheless be interpreted as a grave moral and ethical affront to an entire society. It might just be a really good time to double-check our constitutional and bureaucratic procedures for authorizing the use of violence in foreign territory.

Information Nexus

1. Spot-On Satire of Craigslist Missed-Connections Microculture
2. Great Analysis of Minimum Wage Laws in the Fast-Food Industry
3.  Karl Marx Wrote a Letter to Abraham Lincoln
4. This Time It's Steven Pinker on the Two Cultures
5. Short Podcast on a Beneficial Side-Effect of an Ecological Disaster

Dentistry Gets No Respect

The share of news coverage devoted to the healthcare industry and health science seems to grow every year. This makes sense: as people grow richer and longer-lived, personal health should be more highly valued compared to other life concerns. Additionally, healthcare is increasingly a driver of local and national growth and employment. But as we hear more and more about dazzling new medical devices and cutting-edge healthcare business innovations (minute-clinics! urgent-care facilities are so hot right now! checklists!), one important sub-field seems curiously overlooked: dental health.

The medical industry has changed a lot, and it's been pretty easy to track this via big national news providers. In my personal experience, dentistry has also changed a lot, yet I've heard next-to-nothing about the landscape of the industry or the current big innovations and ideas.

The procedures involved in regular dental check-ups today have changed considerably compared to just ten years ago. There's clearly been some paradigm-shift regarding the efficacy of fluoride treatments. The primacy of flossing is a fairly recent development (current 20-30 year olds were intensely socialized to brush every day, but flossing wasn't stressed), and optimal brushing standards are shifting to be more floss-like (emphasis on gums over teeth). Mouthwash used to be supplementary but it seems to be edging its way into everyone's nightly routine. In short, things are happening in dentistry that we're not hearing about, which is unfortunate, because it's a fascinating sub-field of healthcare.

Unlike traditional holistic conceptions of "health", which are ambiguous regarding what constitutes "healthy", teeth and gums are fairly straightforward. Healthy mouths should be able to mildly stress themselves by eating food and flossing/brushing without pain or discomfort. Aesthetically, social standards are simple and universal: white, straight teeth without bad breath. The existence of a simple and clearly-defined upper-limit on dental health differentiates it from "healthcare" broadly and begs the ultimate question: when will we eliminate gum disease and tooth decay altogether?

Considering this question requires a deep understanding of the complex social, economic, and psychological web of factors that cradle outcomes in dental health. The role of diet seems to be important, but gets downplayed compared to fancy toothpaste marketing materials. There are likely some good statistical studies out there looking at good and bad outcomes in dental health and identifying specific causal factors, but I've never seen one reported on in a newspaper. Likewise with randomized controlled trials investigating specific technologies or lifestyle interventions. Historians, anthropologists, and paleobiologists probably have much to say about dental health, given that humans have been eating food with their teeth for quite a while. Looking at dental health in animals (who don't brush or floss) would also seem to be a fruitful line of inquiry.

Ultimately the end-goal of preventative dentistry should be to develop a pill to destroy or control the bacteria that cause gum disease and tooth decay. Whether this is scientifically possible, or even advisable, I'm not entirely sure. The ethical issues involved would mirror those of obesity drugs currently in development: should we really use a pill to hack some biological mechanism to fix a problem while potentially leaving in place the deep causative factors (like not brushing/flossing or eating unhealthy foods)? These are all fascinating and important questions, but don't expect to read about any in your local newspaper or website.

Quote of the Week

"Suppose cities required all fast-food restaurants to include french fries with every hamburger. The fries would appear free, but they would have a high cost in money and health. Those who don't eat the fries pay higher prices for their hamburgers but receive no benefit. Those who do eat the fries they wouldn't have ordered separately are also worse off, because they eat unhealthy food they wouldn't otherwise buy. Even those who would order the fries if they weren't included free are no better off, because the price of a hamburger would increase to cover the cost of the fries. How are minimum parking requirements different? Minimum parking requirements force people who are too poor to own cars to pay for parking spaces they don't use, and they encourage others to buy more cars and drive them more than they would if they had to pay separately for parking. I'm not saying that there should be no parking. I am saying that parking should be supplied in a fair market."

That's from The High Cost of Free Parking by UCLA economist and urban planner Donald Shoup. For more on this idea check out these two recent articles by Tyler Cowen in The New York Times and Matthew Yglesias in Slate.

Conservative Environmentalism: It's Not Just About Ideology

The New York Times today has an interesting op-ed written by several former EPA administrators on the Republican case for climate change and the executive branch's capability for direct action in light of congress' legislative inaction.

Every time I hear calls for conservatives to embrace environmentalist public policy I'm struck by how logical it seems: conservatives support free- and well-functioning markets, the existence of environmental externalities prevents efficient markets, thus policy that corrects environmental distortions is conservative. Even the marketing angle is tight and clean: conservatives are the "stewards" of the free market, which necessarily implies being stewards of the earth. These logical connections are arguably superior to liberals' attachments to environmentalism, which are numerous, often complex, and always mushy (chemicals are evil, mountains are beautiful, etc.). In politics, simple messaging is the most effective. On this measure environmentalism should be squarely located within Republicans' policy wheelhouse. So why isn't it?

On this issue more than any other, the primacy of identity affiliation in politics is apparent. Political parties are coalitions, often tightly linked to logically consistent moral philosophies, but not always. Through a complex array of contingent historical and demographic factors, the Democratic party became affiliated with environmentalism and Republicans opposed (more on this in a future post). Today, one of the biggest forcing mechanisms holding this status quo together is social identity. Democrats signal their affiliation by supporting environmentalist social trends, policy, fashion, etc. Republicans oppose environmentalism for the same reasons--they don't want to affiliate with all those hippie bourgeois bohemians in cities.

Many of the arguments you hear on both sides of the aisle justifying the status quo in terms of the political parties' established moral philosophies are actually post-facto rationalizations with questionable logical consistency (more on this here). Consequently, the most exciting prospects for environmentalist policy action concerns the identification and manipulation of novel issue dimensions that can confound and muddle the existing Republican-Democrat stasis. Local issues can trump national party allegiance. Big business sectors with a rational interest in preventing climate change doom scenarios, such as property insurers, can leverage their existing links to pro-business Republicans to shift policy. Humanitarians concerned with rural poverty and malnutrition in developing nations can push for more R&D in genetically modified crops, appealing to bleeding-heart Democrats. The list goes on, but one thing is for sure: framing a "Republican environmentalism" is a nice soundbite but substantively next-to-useless in achieving real policy change.

Unbundling SNAP Makes Farm Subsidy Reform Easier

Photo Credit: heritageaction.com

Paul Krugman today ripped into House Republicans for voting to extend the terrible policy disaster of the farm bill while stripping funding for the food stamps program, SNAP. Although this move is by no means settled (food stamps could return in the Senate or conference process), Krugman's collection of factoids and jabs all seem spot-on in revealing the maneuver's perverse moral signal.

But if we take a step back from the symbolism and rhetoric, the potential decoupling of SNAP from the farm bill will likely result in better agricultural policy in the future. 

For one, food stamps aren't going anywhere. The program is incredibly popular with a broad beneficiary base; any serious attempt by Congress to eliminate it would result in massive spontaneous public outrage. Some Republicans speak of a desire to lump all welfare assistance together, run through a single committee. That would be great for institutional efficiency, but it makes liberals nervous by creating a single target vulnerable to marginal cuts. That's all irrelevant though--the likely outcome of a SNAP decoupling is Congress passing a targeted food assistance bill with Republican support, purchased with some other random policy concessions. Certainly not a great outcome, but understandable given the bargaining constraints of divided government.

The farm bill, by contrast, desperately needs an overhaul. In an age where most issues break across party lines, the ridiculous subsidies to wealthy farmers have found support from reelection-minded legislators representing rural districts. This is 'public choice 101': benefits flow to a small, intense group, while costs are vague and distributed. What's more, liberal lawmakers representing urban districts who should be voting against the regressive farm subsidies don't, because they need SNAP. 

So this decoupling will make urban lawmakers more willing to push for farm bill reform. At the very least it scrambles the calcified status quo, and raises the visibility of the issue. Even among rural lawmakers, tackling reform may be more palatable: there's surely some subset who vote 'yea' every time by electoral necessity, but privately understand that recent farm bills bear little relation to their original purpose of safeguarding domestic food security.