Tuesday, 25 August 2015

EconTalk this week

Thousands of bears in New Jersey. Humpback whales near New York City. Acres devoted to farming stable or declining even as food production soars. Jesse Ausubel of the Rockefeller University talks with EconTalk host Russ Roberts about the return of nature. Ausubel shows how technology has reduced many of the dimensions of the human footprint even as population rises and why this trend is likely to continue into the future. The conversation concludes with Ausubel's cautious optimism about the impact of climate change.

A direct link to the audio is available here.

Thursday, 20 August 2015

Chris Trotter misunderstands economics

Over at the Offsetting Behaviour blog Eric Crampton notes that Chris Trotter has been writing In praise of Bryce Wilkinson. And justly so.

But at one point Trotter writes,
Economics II was staffed by young economists who had studied at universities in the United States where the monetarist theories of Milton Friedman, and the ideas of neo-classical economics generally, were already well-entrenched.
"[T]he ideas of neo-classical economics generally, were already well-entrenched". Is this in anyway surprising? This comment seems to show a rather large misunderstanding of the development of economics.

I mean neo-classical economics developed in the 1870s with the work of Carl Menger, William Stanley Jevons and Léon Walras. So by the 1970s and 1980s it had been around for 100 years. It had been the standard in economics textbooks since, at least, Alfred Marshall's Principles of Economics in 1890s. So I am confused as to why Trotter thinks its worth noting that Treasury economists were trained in it. Every economics student, then as now, is trained in it. Its the standard, there is nothing unusual or noteworthy about it.

What would be worthy of note is if they were using non neo-classical ideas. And it is, because they were. Many of the ideas introduced by treasury economists of this time where ideas which moved thinking outside of the purely neo-classical box. They were thinking Coaseian thoughts by applying ideas from the law and economics literature and the new institutional economics to the New Zealand policy scene. They also utilised ideas from contract theory, in the main principal-agent theory, and the transaction cost economies of Oliver Williamson,

This kind of thinking is non neo-classical thinking. It moves away from the ideas of perfect markets, perfect information, zero transaction costs and institution free worlds. So one of the most important things we should be grateful to Wilkinson et al for is the introduction of non neo-classical thinking into New Zealand policy making. It is a great and lasting contribution, a contribution for which they can be justly praised.

Hal Varian interviews Alvin Roth

Hal Varian interviews Alvin Roth about Roth's new book "Who Gets What — and Why," at Google.

Wednesday, 19 August 2015

EconTalk this week

Rachel Laudan, visiting scholar at the University of Texas and author of Cuisine and Empire, talks with EconTalk host Russ Roberts about the history of food. Topics covered include the importance of grain, the spread of various styles of cooking, why French cooking has elite status, and the reach of McDonald's. The conversation concludes with a discussion of the appeal of local food and other recent food passions.

A direct link to the audio is available here.

Tuesday, 11 August 2015

EconTalk this week

Summer Brennan, author of The Oyster War, talks with EconTalk host Russ Roberts about her book and the fight between the Drakes Bay Oyster Company and the federal government over farming oysters in the Point Reyes National Seashore. Along the way they discuss the economics of oyster farming, the nature of wilderness, and the challenge of land use in national parks and seashores.

A direct link to the audio is available here.

Tuesday, 4 August 2015

The "anti-commons" in intellectual policy

A common argument made with respect to intellectual property is that many countries innovation system provide excessively strong or numerous intellectual property rights that drown innovation in a “thicket” or “anti-commons” of overlapping legal rights. The majority view holds that anti-commons effects are a common occurrence that raises significant policy concerns about excessive intellectual property rights. A counter view to this line of argument is that market players have incentives and capacities to correct for anti-commons type effects through contract and other mechanisms.

In a paper, The Anti-Commons Revisited, forthcoming in the Harvard Journal of Law and Technology, Jonathan Barnett aggregates and critically reviews the diverse body of evidence on this issue. He independently replicates some of the most controversial results, surveying over a century’s worth of pooling arrangements, and providing additional evidence on potential anti-commons effects in certain markets. Two surprising and unusually consistent conclusions emerge. First, there is little concrete evidence that intensive levels of intellectual property acquisition and enforcement restrain innovation or output. Second, unless constrained by antitrust limitations, markets consistently exhibit capacities to devise transactional solutions that preempt or mitigate intellectual thickets. These conclusions erode confidence in the majority view, which in turn casts doubt on normative recommendations in favour of weakening intellectual property rights to preclude anti-commons effects.

The abstract reads:
Intellectual property scholars and policymakers often assert that technology and creative markets suffer from “anti-commons” (“AC”) effects that restrain innovation within a web of conflicting intellectual property claims. A minority view asserts that market players have incentives and capacities to correct for AC effects through transactional solutions. To assess the relative merits of each side of this debate, I review a large and diverse body of empirical evidence relating to AC effects in contemporary and historical markets. I independently replicate the most controversial empirical findings, supplement additional research on selected markets, and provide a survey of all documented IP-pooling arrangements in U.S. markets since 1900. The weight of the evidence strongly favors the minority view. Evidence for AC effects is scarce while evidence that markets correct for AC effects is abundant. AC effects are typically preempted or mitigated through cooperative arrangements among small numbers of IP holders or transactional solutions devised by entrepreneurial intermediaries for large numbers of IP holders. This pattern recurs over a diverse array of markets and periods, including automobiles, petroleum refining, aircraft, and radio communications in the early to mid-20th century, and information and communications technology markets from the late 20th century through the present. Contrary to standard assumptions, there is little evidence that these markets experienced reduced or delayed innovation or output despite intensive levels of patent issuance and litigation.

EconTalk this week

Seafood is highly perishable and supply is often uncertain. Roger Berkowitz, CEO of Legal Sea Foods talks with EconTalk host Russ Roberts about the challenges of running 34 seafood restaurants up and down the east coast. Berkowitz draws on his 22 year tenure as CEO and discusses how his business works day-to-day and the question of sustainability.

A direct link to thee audio is available here.

You REALLY know your economy is in trouble when .......

you start to run out of beer!!

From Vice News comes the news that Venezuela Faces Looming Beer Shortage in Dispute with Nation’s Biggest Brewer.
Venezuela's largest food distributor on Thursday denounced the government occupation of a Caracas warehouse amid accusations that the company is hoarding goods.

Soldiers took over the warehouse complex used by Empresas Polar late Wednesday just as Venezuela's federation of brewers announced that Polar's beer manufacturing subsidiary is shutting two of its six plants because of a lack of imported barley — a crucial ingredient in beer.
Earlier this month, the head of Venezuela liquor store federation warned that the nation was about to run out of beer because brewers had reached "zero hour" amid widespread shortages in raw materials. Days later, he was detained for reasons that remain unclear.
An economy without beer is an economy in need of reform, big time!