Gas war!

Apparently collusion is difficult to maintain at the pump:

Investigators say the confrontation started when the owner of the BP station on that corner went to the Marathon station to discuss with its owner why he'd dropped the price for a gallon of unleaded gas to $2.93 per gallon, three cents less than BP.

The discussion quickly escalated into a fight with two more people from the BP station brawling with rivals at Marathon. One man was hit with a baseball bat in the melee. And then, police say, the 51-year-old owner of the Marathon station pulled out a gun and shot the owner of the BP, a 45-year-old father of five children.

In a wild post-script, it appears the BP station is taking advantage of the shooting. While police are still swarming the Marathon station, the BP has jacked up its prices. WXYZ's Bill Proctor reports that as soon as the owner's body was taken away, workers at BP changed the price-per-gallon of unleaded from $2.96 to $3.09.

Imagine if we had that kind of competition at Metro.

Engineering Jihad

Tyler Cowen points to a great paper which connects terrorism to my former profession:

We can thus conclude that among violent Islamic radicals engineers are two to four times more likely to be found than the null hypothesis would predict.

Whether American, Canadian or Islamic, and whether due to selection or field socialisation, a disproportionate share of engineers seems to have a mindset that inclines them to entertain the quintessential right-wing features of “monism” – ‘why argue when there is one best solution’ – and of “simplism” – ‘if only people were rational, remedies would be simple’.

... Engineers turn out to be by far the most religious group of all academics – 66.5 per cent, followed again by 61.7 in economics, 49.9 in sciences, 48.8 per cent of social scientists, 46.3 of doctors and 44.1 per cent of lawyers, the most sceptical of the lot.

Further, the paper goes on to argue that engineers get dangerous when there is a lack of engineering opportunities, as is the case in most Muslim countries. Saudi Arabia is supposedly the main exception, i.e. there are plenty of opportunities there for engineers and so Saudi Arabian terrorists are not disproportionately drawn from engineers. But doesn't Saudi Arabia produce as many terrorists per capita as just about any other country? How do we explain that?

Banks v. credit unions

CEI just published an article I wrote on banks, credit unions, and field of membership. It's yet another story about special interests using government to block out the competition.

Don't follow leaders?

Economists don't talk about leadership too much, and sociologists seem to attribute leadership to the mystical magic of charisma. The only economic theory that comes to mind is Hayek's, which basically states that shit bags rise to the top because only shit bags would want to control other people. There's certainly some truth to that, but here I offer a more charitable view.

We choose our leaders based on the confidence they exude, since it's the best signal of expertise. No doubt this signal can be faked fairly easily for many people, but for the most part confidence comes with real expertise. And confidence is readily apparent. No need for credentials. The good news is that more and more people have access to the information necessary to create expertise, e.g. the internets. In other words, the world is moving towards a perfectly competitive market in information, where anyone can compete for expertise, and therefore leadership, in a given field. Thus, we have reason to believe that our leaders are better today than they were yesterday, and they'll continue to get better.

This is almost enough to get me interested in the presidential debates.

War protesters becoming less moonbaty

I was at yesterday's war protest on the Mall, which I feel is the closest thing we have to Carnival. So it's strange to me that there's not more news coverage. Where else can you find a Santa on stilts? Overall, the crowd was surprisingly diverse, politically and otherwise, as compared to the last protest I attended in March. I found myself sympathizing with most of them, like the vet who drove down from Boston, and this woman, who says she hasn't protested anything since Vietnam. But I must give it to the counter protesters for coming up with the funniest signs:

Just say no to New Orleans

Ed Glaeser puts it this way:

President Bush got us on the wrong path of favoring place over people when he declared “this great city will rise again.” The Democrats have echoed this sentiment. Barack Obama promises “to rebuild now, stronger than ever.” Hillary Clinton argues that “rebuilding New Orleans is not a local obligation, it is an American obligation.”

Wrong. Federal policy does not have an obligation to see that cities rise again — not Buffalo, not Detroit, not New Orleans. Federal policy has an obligation to see that the people of America enjoy as much freedom and opportunity as possible. Federal attempts to rebuild declining cities areas are quixotic, inefficient, and unlikely to help the poor. Spending billions on light rail in New Orleans or upstate New York may make for good stump speeches, but the people of these regions would be better off if they were given cash or fully portable housing vouchers rather than boondoggle projects.

I'll be in New Orleans next month for a wedding and of course I'll try not to mention this.

Forgiveness

An atheist friend, worldly wise and well travelled, told me there is no connection between religion and ethics. How else do we explain the Amish of Lancaster County:

Many from Nickel Mines have pointed out that forgiveness is a journey, that you need help from your community of faith and from God ... to make and hold on to a decision not to become a hostage to hostility.

Need investment advice?

It looks as though high school seniors know something about economics, even public choice, and, crucially, the benefits of trade. And they appear to be skeptical of the benefits of education. Have they been reading Bryan Caplan's blog?

If it's Tuesday it must be Belgium

Sorry for the long hiatus but I've been traveling in Europe for the past three weeks, and when I travel I cover some territory, no time for blogging. Here's the list of places, favorites first:

1) Frankfurt
2) Brussels
3) Amsterdam
4) Berlin
5) Cologne
6) Manchester
7) Cambridge
8) London

I was in Cambridge for the Freedom Week conference, which was interesting and I appreciate the opportunity. Here we are punting on the river Cam.

English culture, on the other hand, scores at the bottom for me. It is way too class oriented, with a separating equilibrium created by the two main classes struggling to distance themselves from one another, understandably. At the bottom are Chavs, which stands for council housing and violent. Every city has them. In London it's the cockney, also called hoodies because they dress like American thug-rappers. But hoodies don't make videos, they kill people. At the other end, the top I suppose, are some sort of Monty Python caricature of landed gentry. These people are wise to remain landed, as they would get seriously beaten up anywhere outside of England.

London is prospering primarily because their immigration laws are less restrictive than ours, thanks to the EU. Immigrants generally run the place, and they form the bulk of the middle class. The ones I talked to would jump at the chance to live and work in the US.

Manchester seemed to be a little less class conscious, people are more open and friendly, and the beer is cheaper. So it wins the England category hands down. It's a good place for a 13 hour pub crawl. Thanks Mark!

Next for the Continent where I visited friends in Berlin and Frankfurt, and along the way stopped in places I hadn't seen before, places that I had skipped for a reason. But there were a couple of nice surprises. Particularly, Frankfurt is awesome. The parks are lovely, the women are lovely, the beer gardens and cafes are pleasant, and the tourists are few. It makes me want to work for the European Central Bank.

The second best surprise was Brussels. It's something like a mini-Paris, but with good and cheap Belgian beer. And not too many tourists. Here's Che Habana Cafe, where I imagine the EU regulators hang out.

Amsterdam's Vondel Park was also a nice surprise. But I'll stop here with the photos, the rest are on facebook: Will McBride in the Washington, DC network.

Addendum: I forgot to mention the IG Farben building in Frankfurt, which alone is worth the trip. Besides being an architectural marvel, the excellent exhibit there tells perhaps the most chilling interest group story of all, i.e. how IG Farben financed Hitler's rise to power and in return received lucrative military contracts. Here is one conspiratorial view. Anti-capitalists and capitalists alike should come together on one thing: Capitalism is dangerous only when it becomes tied to the coercive powers of the state.

Amtrashed

In case you were wondering who benefits from nearly $1 billion in annual Amtrak subsidies, it's the rich:

GrandLuxe offers separate cars, with their own private dining and lounge sections, attached to regular Amtrak trains. Tickets for such trips range from $789 per person for a two-day, one night trip on the East Coast to $1,599 or higher for three days and two nights for travel to or from the West Coast.

But now Amtrak has announced a new business plan which ties them to an even narrower interest group, i.e. rich drunks:

Members of Amtrak's guest rewards program - the railroad equivalent of frequent fliers - can get a $100 per person credit for alcohol between November and January.

Did Teddy Kennedy threaten to cut spending?

Libertarians getting together

I just got back from the IHS Social Change Workshop at UVA in Charlottesville, VA. It's a week long series of lectures and discussions covering generally the economic foundations of a free society. There were about 130 participants from all over the world, mostly economists but also evolutionary psychologists, political scientists, sociologists, historians, lawyers, philosophers, international development types, and one lone musician. I'd say most were at least sympathetic to libertarian themes.


I can't begin to summarize all the great lectures and discussions, but here are a few choice quotes:

1) "Learning comes from pain."

2) "Bonding comes from pain."

3) "Development studies is shit."

Bonnaroo: 4th and final day, just when we were starting to fit in

Our neighbors to the right.

Our neighbors to the left. Ken and Joanna drove down from Toronto, and saved our lives by letting us lounge under their canopy.

Nick says, "always bring a towel!"

Yep, it's the Maytag repair man.

Me with a Huntsvile Times umbrella. Notice that no one is looking at me.

Ralph Stanley and the Clinch Mountain Boys. The crowd was exceptionally reverent. They wouldn't let poor Ralph get off stage.

Ralph Stanley fans.

The shirt says, "Will drop pants for ticket." Unfortunately I didn't get a picture of the guy with the shirt that says, "Golf can go fuck itself."

This girl painted herself green. Not sure why.

Nick has a meeting of the minds with Towely.

The White Stripes, a husband and wife duo that somehow sounds like Led Zeppelin. It was the last band we saw.

No idea.

Bonnaroo: 3rd day, The Police

Max, Nick, and Sting. Or, as Zappa used to call him, Mr. Sting.

Max, Nick, and me. Yes, I'm very happy to see Mr. Sting, and Stuart Copeland and Andy Summers. Sting was in top form, if a little perfunctory, and Copeland had about 100 cymbals at his disposal. But for some reason they ended early. Probably because Sting realized that he was singing to a bunch of 20 somethings who barely recognized Roxanne. Of the 18 songs performed, the most memorable were The Bed's Too Big Without You and Wrapped Around Your Finger. At least I think I remember that. Despite the short set it was still the highlight of the weekend for me. What say you, Max?

Of the 20 or so other bands I saw, I thought the best, most surprising performances were by Rodrigo y Gabriela, Kings of Leon, Hot Chip, Railroad Earth, Xavier Rudd, Regina Spektor, and Galactic.

Bonnaroo: 2nd night, Centeroo fountain, Tool light show, etc.

Entering Bonnaroo

Nick surveys the 80,000.

On the road

I've spent the last four days at home in Iran. It's actually very peaceful here. Dad came over from Sweden, after stopping by my sister's place in Portugal. Later today I'll leave for Saudi Arabia to go see Bonnaroo.

(HT to Tyler Cowen)

Article on Mason's econ bloggers

Somehow they failed to mention me.

Get a job

Another report from the asinine immigration debate:

Debate over the bill has featured plenty of behind-the-scenes maneuvering over which groups of workers, if any, should be given preferential treatment. But with the U.S. unemployment rate at historically low levels, there seem to be plenty of unskilled jobs to go around. Or at least that’s what many lobbyists representing agriculture, hotel owners and other service industries were telling Congress.

Or you could ask a hotel worker, such as myself. Up until 10 days ago my summertime schedule had mainly consisted of soccer during the day and Wonderland at night. I had also been doing some tutoring, and the mother of one of my tutees works at the Omni Shoreham Hotel. I went to the Omni to collect payment from the mother, who we'll call Janet. The Omni was buzzing, and I asked Janet if there were any jobs available. Her eyes lit up, and she looked to the ornate lobby ceiling and thanked the Lord. Then she looked at me, and noticing I'd biked there, asked, "Is $12 an hour OK?" I agreed, without any real idea of what I was getting into. I went home to put some pants on, and returned within the hour to start work in the accounting office. I had never worked in a hotel. Or in an accounting office. Or with women. My only real work experience is as an engineer.

The accounting office is mostly women, and mostly immigrant, from the Caribbean, Spain, Ethiopia, Russia, and Germany. Janet needs about 10 more people, and she used me to cover the phones and whatever emergency popped up. There was absolutely zero down time. The phone rang almost continuously with angry guests wanting to dispute their bill. Then I started two days of general hotel orientation, which was a relief, though exceptionally boring. There were 10 other new employees, mostly immigrants, from the Philippines, Eritrea, Latin America, etc. After sitting through hours of inane business slogans, I started to envy their poor English skills.

I came to realize the whole place is run by immigrants, from the Australian hotel manager to the Latinos and Eritreans who clean up the rooms. None of these jobs are fun, and there's a high rate of turnover. I'm fairly certain that the Omni Shoreham would go bankrupt without cheap immigrant labor, especially the unskilled kind. On Friday I informed Janet that I might consider staying if she raised my pay to $50/hr.

Summertime in England

Thanks to the people at Freedom Week, I'm going to Cambridge! I might stay for the month of July and travel around a bit. Now I just need a smaller camera:

Indeed, solitary travelers conjured up an entirely different reaction than a group of Americans, who were perceived as camera-wielding, Bush-supporting boors. “Universally idiotic; large Hawaiian shirts; large cameras; stupid questions,” says Ian Clifford, a software developer from Nottingham, ticking off the stereotypical qualities of a group of average American tourists. And, says Clifford, these are the more cultured members of U.S. society: “Only 10 percent of Americans have passports. What on earth have you left behind?”

Adam Smith is smiling on Two Buck Chuck

"And the source of the wealth of nations is the division of labor", as Fred Franzia has happily discovered:

It’s been five years since the first of these amazingly cheap chardonnays and cut-price cabernets started rolling off the line, released by maverick vintner Fred Franzia under the formal label of Charles Shaw wines.

Three hundred million bottles later, Two Buck Chuck is still selling, and Franzia is still preaching his message of wine for the masses.

“We’re not out to gouge people,” says Franzia. “What I would like to see is every consumer be able to afford to have wine on the table every day and not feel insecure about it.”

Last year, Two Buck Chuck — available only in the Trader Joe’s grocery chain and priced at $1.99 in California, hence its nickname — accounted for at least 8 percent of California wine sold in-state, said Jon Fredrikson, who tracks wine shipments through his Woodland-based company, Fredrikson, Gomberg & Associates. National market share figures are not available.

...

Making wine is expensive from the ground up, but Franzia owns a lot of ground — 40,000 acres is the common estimate. He won’t say. His Ceres-based Bronco Wine Co. also owns the crushing and bottling plants and has its own distribution company.
Until now, another company has supplied the bottles. But Franzia’s latest idea is to fix that by building a glass container plant near his Napa Valley bottling facility in a business park near the Napa County Airport.

When we were rational

Stuart Armstrong at OvercomingBias has a good post on my new favorite topic:

In the real world, we could always hope that the march of science could replace superstitious explanations with truer ones. But the truth is already out there in these virtual worlds, and is ignored. If these games are the shape of things to come, it might well be that the zenith of rationality is already in the past.

Here's an exerpt from my recent paper "Overcoming Selfishness: Religion and the Alternatives":

Self-deception and belief go hand in hand. It is likely that self-deception evolved as a means to create and maintain belief, because as I have argued, belief works. In his 2002 Nobel lecture, Vernon Smith discusses some of his experiments involving the trust game. He finds that reciprocity is behind cooperation, not altruism or other-regarding utility. In other words, we achieve cooperation by deluding ourselves about our own altruism.
Immediately preceding the “invisible hand” statement, Adam Smith remarks on how wealth is created through the self-deception of the wealthy:

We are then charmed with the beauty of that accommodation which reigns in the palaces and oeconomy of the great; and admire how everything is adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires. If we consider the real satisfaction which all these things are capable of affording, by itself and separated from the beauty of that arrangement which is fitted to promote it, it will always appear in the highest degree contemptible and trifling. But we rarely view it in this abstract and philosophical light. We naturally confound it in our imagination with the order, the regular and harmonious movement of the system, the machine or oeconomy by means of which it is produced. The pleasures of wealth and greatness, when considered in the complex view, strike the imagination as something grand and beautiful and noble, of which the attainment is well worth all the toil and anxiety which we are so apt to bestow upon it.
And it is well that nature imposes upon us in this manner. It is this deception which rouses and keeps in continual motion the industry of mankind. (TMS, IV.1.9-10)

But Adam Smith generally sees self-deception as an irrational and unsocial weakness that should be corrected:

He is a bold surgeon, they say, whose hand does not tremble when he performs an operation upon his own person; and he is often equally bold who does not hesitate to pull off the mysterious veil of self-delusion, which covers from his view the deformities of his own conduct. Rather than see our own behavior under so disagreeable an aspect, we too often, foolishly and weakly, endeavor to exasperate anew those unjust passions which had formerly misled us; we endeavor by artifice to awaken our old hatreds, and irritate afresh our almost forgotten resentments: we even exert ourselves for this miserable purpose, and thus persevere in injustice, merely because we once were unjust, and because we are ashamed and afraid to see that we were so. (TMS, III.4.4)

I think Smith, and most economists who have followed him, have failed to recognize the ecological value of individually irrational self-deception, i.e. its role in facilitating beliefs which benefit the group.
Robert Trivers (2006), the evolutionary sociobiologist, claims that self-deception evolved as a way to better deceive others. But he recognizes there must be a positive side as well, referring to what McCloskey (2006) and myself would call Hope: “Life is intrinsically future oriented and mental operations that keep a positive future orientation at the forefront result in better future outcomes (though perhaps not as good as those projected). The existence of the placebo effect is another example of this principle (though it requires the cooperation of another person ostensibly dispensing medicine). It would be very valuable to integrate our understanding of this kind of positive self-deception into the larger framework of self-deceptions we have been describing.”
Again, the positive side to self-deception is that it facilitates trust. Why else would it survive the selection process, and why would it continue to be so attractive? Despite the Enlightenment, we are drawn more than ever to myth-makers, inspirational speakers, emotional politicians, and thoughtless celebrities, not scientists and skeptics. Libertarians and economists know this from experience.

Addendum: Michael Prescott shows us the superstitions of a skeptic, Susan Blackmore. (Hat tip to commenter M.C.)

Summer gear

Looks like I have two options: to snitch or not to snitch. Blake, if you see this before Bonnaroo, I'm gonna need a Narc shirt.

Seaside, Florida

This is where I was last month for my friend Brannon's bachelor party. It's halfway along the panhandle of Florida, aka the redneck riviera, and it's probably the best beach in America. The girls there are not into libertarian philosophy, economics, or politics.

It is done

3 exams and a huge paper, that's what I've been up to the last month. I feel pretty good about the paper. It's sort of an exegesis of Adam Smith on religion, morality, selfishness, and self-deception. Maybe I'll use it as my job paper. You know, at Starbuck's.

That's my next task, I suppose, finding a job. I've been taking a wait and see approach. Hence, I have only two things scheduled for the summer:
1) IHS Social Change Workshop in Charlottesville, VA; June 23-29.
2) Bonnaroo, Manchester, TN; June 14-17. I'll be studying the economics of grilled cheese.

I'll probably also check in with the family, which means stopping in all the places that Guns n' Roses did on their last tour:
Huntsville, AL
Lewisburg, TN
Lexington, KY
Hendersonville, NC
Los Angeles, CA

Media conspires to avoid work

Seems they all forgot about the other "deadliest act of mass murder in a school in U.S. history":

The Bath School disaster is the name given to not one but three bombings in Bath Township, Michigan, USA, on May 18, 1927, which killed 45 people and injured 58. Most of the victims were children in second to sixth grades attending the Bath Consolidated School. Their deaths constitute the deadliest act of mass murder in a school in U.S. history. The perpetrator was school board member Andrew Kehoe, who was upset by a property tax that had been levied to fund the construction of the school building.

Kehoe used a detonator to ignite dynamite and hundreds of pounds of pyrotol which he had secretly planted inside the school over the course of many months.

Hat tip to Dad.

Roboticists and economists

What's with the maleness?

Wired News: A number of people in your book don't sleep, don't bathe. Is there something about robotics that appeals to this personality type, or does the work itself take over?

Lee Gutkind: You can't just do this for eight or 16 hours and walk away. Even debugging a program will take a whole day. So I think it takes a patient but obsessive personality. Don't forget also, it's a very male-oriented culture. There's not a lot of joking, not a lot of flirting, because there's no one to joke and flirt with. You're flirting with your robot is what you're doing.

All I've got is rationality.

The superstition economy, or how self-deception makes the world go 'round

That might just be the title of my dissertation. Tyler brings up self-deception, just as I'm working out my paper on the role of belief, often delusional belief, in securing trust. Here's the abstract:

Belief constitutes hope, and hope is essential to all entrepreneurial activity, as it enables trust. The critical belief is belief in selflessness, within yourself and others, which is self-deceptive in as much as we are naturally selfish. So it is costly to produce, maintain, and signal a credible commitment to this belief, which religion provides via sacrifice and stigma. Numerous secular institutions compete along the same dimension, and are characterized by belief, sacrifice, and stigma. Namely, government, health care, education, romantic love, and others have to some degree become substitutes for religion. However, they require more sacrifice than religion, due to the problem of monitoring, and in particular, more costly self-deception. Better information improves monitoring, and reduces self-deception. In a world of improving information, this may explain the rise of secularism. However, so long as information is less than perfect, religion will remain, as the existence of God cannot be disproved.

Remember folks, I'm trying to maintain methodological atheism here.

This one goes to eleven

Keith Richards continues to defy categories, and all theories of human behavior:

"The strangest thing I've tried to snort? My father. I snorted my father," Richards was quoted as saying by British music magazine NME. "He was cremated and I couldn't resist grinding him up with a little bit of blow. My dad wouldn't have cared," he said. "... It went down pretty well, and I'm still alive."

War, hmm, what is it good for?

I was at the Iraq War protest today, not because I'm civic minded, but because a professor paid me to hand out surveys. I'm not sure the questionaire will capture the eccentric nature of this crowd, so here's my unscientific analysis:

30% nice old '60s era hippies.
30% eerily silent but angry middle aged types.
30% Ewoks.
10% mentally deranged.

I gotta tell you, it didn't help firm up my anti-war sentiment. In the language of Adam Smith, there was no fellow-feeling there. Also, hardly any blacks. The one black guy I randomly selected marked himself down as white.