Quiz for you: Do “the rich” pay less taxes under the new tax plan?
Ok, now look at this data:
Sill say so? By what definition?
Via John Cochrane.
Scott Alexander reviews:
Medieval Icelandic crime victims would sell the right to pursue a perpetrator to the highest bidder. 18th century English justice replaced fines with criminals bribing prosecutors to drop cases. Somali judges compete on the free market; those who give bad verdicts get a reputation that drives away future customers.
“Anarcho-capitalism” evokes a dystopian cyberpunk future. But maybe that’s wrong. Maybe we’ve always been anarcho-capitalist. Maybe a state-run legal system isn’t a fact of nature, but a historical oddity as contingent as collectivized farming or nationalized railroads. Legal Systems Very Different From Ours, by anarcho-capitalist/legal scholar/medieval history buff David Friedman, successfully combines the author’s three special interests into a whirlwind tour of exotic law.
This is sort of like an end-of-year book list, but a lot of good ideas are communicated via blogs and twitter, and they need recognition too! So, here’s a list of high-quality ideas and theories I read, and who I found them from.
Puzhong Yao in American Affairs:
Robert Rubin never intended to become the senior partner of Goldman Sachs: a few years into his career, he even handed in his resignation. Just as in Rubin’s career, I find that maybe randomness is not merely the noise but the dominant factor. And those reasons we assign to historical events are often just ex post rationalizations. As rising generations are taught the rationalizations, they conclude that things always happen for a reason. Meanwhile, I keep wondering: is there someone, sitting in a comfortable chair somewhere, flipping a coin from time to time, deciding what happens in the world?
Most Americans that I have met seem confused about this question. Perhaps it is understandable since most of them are not in finance and have not read Rubin’s book. Their goal is always to change something—Stanford business school’s motto is “change lives, change organizations, change the world”—though they rarely seem to know what or how. Or what the role of chance and circumstance is. But if the goal is to change something, they must have the ability to determine the future, mustn’t they?
John Cochrane lays down some wisdom:
The sad paradox of free markets is that free markets do not need people to understand them to work. But democracy does require voters to understand how things work.
If anyone has a futures trading account with access to CFE:XBT/F8 there is currently a cash and carry arbitrage for $1200 on one month lockup of 30k.
P.S. Hah, I was right: http://archive.is/ZIo5H
Veronique Greenwood in The Alantic:
When I moved to China nearly two years ago, one of the first things I bought was a bicycle. I live on a university campus, where everyone rides, and the bike was cheap: $17 for an ancient Five Rams cruiser, with a lively color scheme of teal and rust. I used to cycle to work when I lived in New York, dodging tourists and threading in between delivery trucks. But the moment I pulled out onto a street in China, it became clear that this was going to be a different experience.
Reminds me of an argument I got into with someone over the asinine Seattle bike helmet law. People think our (US) way is the only way to do things despite the fact that many people in the world do things the other way, and seems to go fine for them. Read this and absorb some of that. Stepping back, where we choose (have been taught) to place our trust is kinda my focus these days. Why do we want to place that trust in the government, despite the evidence of better systems to trust? No reason the FDA needs to be a government org, your doctor and insurance company could agree on a more able org. Same for food safety, occupational licensing, etc.
If you can get past the shitty red bull editing, there is some fantastic content in here.
Paul Sztorc has finally figured out how to communicate about what Drive Chains is, and here is a good hour and a half of that.
Vitaliy Kaurov at Wolfram:
When Does a Word Become a Word? “A shot of expresso, please.” “You mean ‘espresso,’ don’t you?” A baffled customer, a smug barista—media is abuzz with one version or another of this story. But the real question is not whether “expresso” is a correct spelling, but rather how spellings evolve and enter dictionaries. Lexicographers do not directly decide that; the data does. Long and frequent usage may qualify a word for endorsement. Moreover, I believe the emergent proliferation of computational approaches can help to form an even deeper insight into the language. The tale of expresso is a thriller from a computational perspective.
Adventures in Computational Lexicology indeed.
Ben Thompson at Stratechery:
I believe that Ajit Pai is right to return regulation to the same light touch under which the Internet developed and broadband grew for two decades. I am amenable to Congress passing a law specifically banning ISPs from blocking content, but believe that for everything else, including paid prioritization, we are better off taking a “wait-and-see” approach; after all, we are just as likely to “see” new products and services as we are to see startup foreclosure.
Orin Kerr presents Gus Hurwitz on The Volokh Conspiracy:
The most confounding aspect of the contemporary net neutrality discussion to me is the social meanings that the concept has taken on. These meanings are entirely detached from the substance of the debate, but have come to define popular conceptions of what net neutrality means. They are, as best I can tell, wholly unassailable, in the sense that one cannot engage with them. This is probably the most important and intellectually interesting aspect of the debate - it raises important questions about the nature of regulation and the administrative state in complex technical settings.
The most notable aspect is that net neutrality has become a social justice cause. Progressive activist groups of all stripes have come to believe that net neutrality is essential to and allied with their causes. I do not know how this happened – but it is frustrating, because net neutrality is likely adverse to many of their interests.
Alberto Mingardi at Econlog:
It is not the fault of capitalism that the common man does not appreciate uncommon books. -Ludwig von Mises
There are many gems in Gertrude Himmelfarb’s Past and Present. The Challenges of Modernity, from the Pre-Victorians to the Postmodernists.
One is a 1952 essay on “American Democracy and Its European Critics”. In that essay, in comparing Tocqueville’s reading of America with Harold Laski’s (in The American Democracy), Himmelfarb notes perceptively that critics of American culture tend to see that “the incubus of Big Business lies heavily upon the whole country, stifling individual expression and corrupting individual tastes”.
But we know well that successful enterprises, cultural enterprises included, basically provide people with something that they want.
Tyler Cowen at MR:
Keep in mind, I’ve favored net neutrality for most of my history as a blogger. You really could change my mind back to that stance. Here is what you should do.
If you go to Galina now, people will tell you different things about Luka’s disappearance. In one version of the story, the village woodcutter, waking from a dream in which his wife has forgotten to put the pie in the oven and served it to him raw, looks through the window and sees Luka wandering down the road in his nightgown, a white scarf tying his chin to the rest of his head so that the mouth will not fall open in death, his red butcher’s apron slung over one shoulder. In that version, Luka’s face is as loose as a puppet’s, and there is a bright light in his eyes, the light of a journey beginning. The woodcutter stands with the window curtains flung open, his legs stiff with fear and lack of sleep, and he watches the butcher’s slow advance through the snowdrifts that are running across the dead man’s bare feet. Others will tell you about the baker’s eldest daughter, who, getting up early to warm the ovens, opens the window to let the winter air in to cool her and sees a grounded hawk sitting like something ancient on the fallen snow of her garden. The hawk’s shoulders are dark with blood, and when it hears her open the window it turns and looks at her with yellow eyes. She asks the hawk, “Is all well with you, brother—or not?” and the hawk replies, “Not,” and vanishes.
From The Tiger’s Wife By Téa Obreht.
Alex Tabarrok at MR:
What is the effect of tipping on the take-home pay of Uber drivers? Economic theory offers a clear answer. Tipping has no effect on take home pay. The supply of Uber driver-hours is very elastic. Drivers can easily work more hours when the payment per ride increases and since every person with a decent car is a potential Uber driver it’s also easy for the number of drivers to expand when payments increase. As a good approximation, we can think of the supply of driver-hours as being perfectly elastic at a fixed market wage. What this means is that take home pay must stay constant even when tipping increases.
At this point many readers will object that I am a horrible person and this is all theory using unrealistic “Econ 101” assumptions of perfectly competitive markets, rationality, full information etc etc. To which my response is that the first claim is plausible but irrelevant while the second is false. A new paper, Labor Market Equilibration: Evidence from Uber, from John Horton at NYU-Stern and Jonathan Hall and Daniel Knoepfle, two economists at Uber, looks at what happens when Uber increases base fares.