American weddings

This is not Monsoon Wedding, this is a real wedding in downtown DC! Manan Shah married Swati Raval at the Ronald Reagan building. He rode in on an elephant. Read more, courtesy of today's Post.

Occasionally I wonder about the extravagance of American weddings. Especially when I'm forced to buy a $100 herb grinder for my friend because that's all that's left on his Williams-Sonoma registry. I've been to a few weddings that probably cost upwards of $100,000. I know some couples who have taken out loans to pay for it. According to this site, the average wedding costs $28,732. What gives? Why not get married in Safeway, as I plan to do?

I figure part of it has to do with credible commitment, i.e. the bride and groom will think twice about redoing such a costly venture. And in this way they are also tying their own and each others hands to some extent. This of course was accomplished by the bonds of marriage before divorce became socially and legally acceptable, with the advent of no-fault divorce, etc. So has the cost of marriage gone up as a result? I can't really tell from this site (or without paying for a subscription), but I would need to correct for increased income anyway. One thing to look at is divorce rates by state and see if that is correlated with average wedding cost. It looks like states in New England and the Midwest have the lowest divorce rates. So I would expect them to have the cheapest weddings.

So does that mean India, with notoriously extravagant weddings, should have high divorce rates? Good luck finding those numbers!

Happy father's day

I was that one, and my father, flawed in the manner of all those cursed with opposable thumbs, was more than a presence. Judged against the void of paternity around us, he was fanatical. This was as much by choice as by chance; I was the sixth of seven kids born to four women. Some of us were born to mothers who were best friends. Some of us were born in the same year. It was all a tangled mess on paper, but measured against "Family Ties" or even "The Cosby Show," it was love, and it formed my earliest and most enduring sense of family.

We were not allowed to refer to each other with the prefix "half" (as in "half-brother" or "half-sister"), as Dad always told us that the half gets in the way, and when the mother of one spoke, it was law, as sure as if the mothers of all were speaking at once.

That's from today's Washington Post. Is it just me or are our newspapers getting much better?

Guess where

Only sporadic violence marred the celebration. Last Wednesday, a stray bullet shattered a hotel window and struck and wounded a tour guide standing inside.

Yep, it's Mardi Gras in New Orleans.

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.

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.

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."

Conspicuous consumption or conspicuous saving?

Tyler writes about how Veblen has come back into vogue. Veblen saw status-seeking as essentially inefficient. (And he thought engineers could somehow fix this? The arrogance of his generation continues to astound me.) I think status-seeking is always about accumulation of that which is scarce, be it SUVs, Chinese art, or economic knowledge. It's never been fashionable to accumulate air. Status-seeking increases demand for that which is scarce, and so induces production, which mitigates the effects of scarcity, i.e. high prices.

Veblen found the "conspicuous consumption" of the Gilded Age repulsive. I guess the flourishes of Victorian architecture offended his Scandinavian sensibilities. But think of how this period stands out amongst the blandness which preceded it. How much of colonial architecture is really striking? Monticello, you say. I say it's an out of proportion rip-off. As is Mount Vernon. There are a few notable ante-bellum mansions in the South, and New Orleans is exceptional. That's where the money was. But my sense is the North was really lacking in this department, e.g. the row houses of Philadelphia are today the only boring thing about that town. The Gilded Age came along to fix all that, and status-seeking was the mechanism.

That we're able to still enjoy Victorian architecture means this wasn't really conspicuous consumption, it was more like conspicuous saving. I think this is typically the case with status goods, because much of what we produce is durable. Even when we blow a bunch of money on an SUV, which looses 20% of its value when driven off the lot and then quickly becomes a pile of rust, it serves to advance technology. When we splurge on an expensive meal, it spurs the invention of recipes. When we get PhDs in literature or, dare I say, economics, where probably most dissertations are only ever read by the dissertation committee, still some of them will change the world.

In short, I suppose knowledge of Veblen has become too scarce, and so status-seekers have become his exponents. Thank God the engineers haven't prevented it.

Learning economics from The Beatles, lesson 3

Why did The Beatles, and so many other great musicians, come along in the 1960s? I think the answer lies primarily in technology, which advanced at an unprecedented rate in the post-war period. The electric guitar was still an unproven instrument, until Jimi Hendrix came along. Many other supply side technologies came to revolutionize the music business, e.g. the advent of the transistor lead to higher quality studio mixing and recording equipment and techniques. Likewise, on the demand side, advances in radio, TV, and the stereo LP facilitated a thick market in music. The spread of the English language also can't be ignored, and The Beatles experienced this as both a cause and effect of their success.

As with any technology, these were adopted at differing rates. The early adopters were mainly baby boomers in the West. Thus, it is no coincidence that The Beatles came from what was once the most economically advanced country in the world. And they weren't alone. Remember the British invasion? Here is a list showing the top music exporters in 1997. Note that it looks a lot like a list of today's richest countries (not per capita, just total size in GDP). Or the richest in 1970. (The only exception is North Korea coming in at #30 on the music list. Maybe Curtis can explain that one.)

The lesson is that change implies diversity. In this case, technological change made for a diversity of musical output, both in quality and quantity. If you want to be uncharitable, The Beatles can be seen as monopolists who used technology as a barrier to entry, just as the "robber-barons" did a century ago in the fast-changing oil and railroad industries. But we are not uncharitable with musicians, and we shouldn't be with other productive enterprises.

So, from this and the previous lesson we see that prosperity, change, and diversity all go hand-in-hand. Think about that the next time your local politician recommends stabilizing prices, or setting a minimum wage, or capping CEO salaries. Insisting on equality of outcomes means the destruction of diversity, and with it prosperity. And when the State enforces it through coercion, we have lost our liberty as well.

Addendum: Tyler's latest NY Times article covers much the same ground, and the next lesson on status and culture. This is what happens when you read someone's blog for 3 years. And take his macro and industrial organization classes.

Correction: Though there were plenty of good musicians in the 1960s, The Beatles were and are singularly huge, selling more than 4 times as many albums as #2, Simon and Garfunkel. No other decade is like that, having one completely dominant player. Maybe Elvis in the 1950s, but he recorded only about 20% of his albums then. Roughly 1/3 of his biggest hits were in the 1960s. And The Beatles soon swamped him. Here is an attempt to put together world-wide record sales. Here is the more systematic RIAA data, which I've put in a chart shown below. In the first tier, on the left, it shows the top artist in each of 5 decades. Elvis is the blue bar, The Beatles are light purple, Led Zeppelin is yellow, Billy Joel is green, and Garth Brooks is dark purple. Yes, popular music has really gone down hill. (Thanks to Jason for the comments which made me do the research.)

A politician I don't hate

Just the opposite, I think I'm smitten, like one of those guys Tyler was talking about.
Here's some background, from the Washington Post review of her new book:

In the first scene of Infidel, Ayaan Hirsi Ali is a child of 5, sitting on a grass mat. Her grandmother is teaching her to recite the names of her ancestors, as all Somali children must learn to do. "Get it right," her grandmother warns. "They are your bloodline. . . . If you dishonor them you will be forsaken. You will be nothing. You will lead a wretched life and die alone."

Thus begins the extraordinary story of a woman born into a family of desert nomads, circumcised as a child, educated by radical imams in Kenya and Saudi Arabia, taught to believe that if she uncovered her hair, terrible tragedies would ensue. It's a story that, with a few different twists, really could have led to a wretched life and a lonely death, as her grandmother warned. But instead, Hirsi Ali escaped -- and transformed herself into an internationally renowned spokeswoman for the rights of Muslim women.

The break began when she slipped away from her family on her way to a forced marriage in Canada and talked her way into political asylum in Holland, using a story she herself calls "an invention." Soon after arriving, she removed her head scarf to see if God would strike her dead. He did not. Nor were there divine consequences when, defying her ancestors, she donned blue jeans, rode a bicycle, enrolled in university, became a Dutch citizen, began to speak publicly about the mistreatment of Muslim women in Holland and won election to the Dutch parliament.

But tragedy followed fame. In 2004, Hirsi Ali helped a Dutch director, Theo van Gogh, make a controversial film, "Submission," about Muslim women suffering from forced marriages and wife beating. Van Gogh was murdered by an angry Muslim radical in response, and Hirsi Ali went into hiding. The press began to explore her past, discovering the "inventions" that she had used to get her refugee status. The Dutch threatened to revoke her citizenship; the American Enterprise Institute offered her a job in Washington. And thus she came to be among us.

Look out. If I'm at all normal, we'll be changing the Constitution one day to make her President.

Addendum: Here is her totally unreasonable time slot on Book-TV.

Optimism in New Orleans

The drugs are working for Super Saint. Here is his encore. If you appreciate this kind of art, or want to help rebuild New Orleans one Super Saint at a time, buy one of Blake's t-shirts. I especially like this, this, and this one.

French culture from an English perspective, chicks in politics edition

Tyler discusses the possible effects of a female French president. I just don't see this as very much different than the current arrangement. Chirac is a fruit.

Lying liars

Robin lists 10 ways to detect lies. I think he knows this is a lie, that it is of no use. Those who read the list, already know it. Those who skip it are not interested in finding the truth anyway. I think all of us live on lies to some extent, and some more than others. I fancy myself as a truth seeker, and I think Robin does too (just look at the names of our blogs, for God's sake). Libertarians generally see themselves as crusaders. And it turns a lot of people off. My mother says I sound like Jesus, and she doesn't mean that as a complement.

But I know I couldn't live without lies. For instance, when I was taking economics at Lund in Sweden, they treated me like royalty, I suppose just because I'm American. One young Swede once blurted out in class, "But you're brilliant!", referring to me. I didn't take him too seriously, since he barely knew me, but it's something I'll not soon forget either. It feeds the ego, even if it is a lie.

Last night a friend told me some horrible stories about her on-again, off-again relationship with a pathological liar. She seemed to truly wonder how she could swallow so many lies. I suspect they served a purpose. He's a salesman who knows what the customer wants. Or, alternatively, we can blame him, via a kind of Say's Law of lies, ie the supply creates the demand. Regardless, it is clear that both sides gained something. At least in the short term, the lies expanded the opportunity set.

The same kind of self-deception is behind many of our most cherished institutions. You atheists will immediately think of religion. Indeed, Larry Iannaccone has used this same language, claiming that religion exists in large part because it expands the opportunity set, from the mundane to the transcendent. He does not, however, call it self-deception, since we simply have no evidence one way or the other as to the existence of God.

Another example is democracy and the whole notion of the State. We all know the politicians are lying to us, and yet many of us continue to vote for them. It is a kind of religion for the voter, since he is basically ignorant of the evidence on government effectiveness. For libertarians, of course, this whole arrangement is appalling, because we've seen the evidence and it doesn't look good.

The same applies to health care. The best evidence indicates that, on average, doctors really don't help much at all. Yet, we treat them as experts, and insist on policies which subsidize health care and health insurance.

As Robin pointed out in class this week, this is essentially no different than our faith in financial "experts." We gladly fork over millions of dollars in fees to pay for actively managed mutual funds, when, on average, they do worse than index funds.

The list goes on and on, from academia to the main stream media.

So why do we believe experts, even when the preponderance of evidence contradicts them? Why do we believe lies? And why do lying institutions prosper in prosperous economies? Do lies somehow make the world go round? Or are they just the baggage of civilization, an unfortunate and unavoidable human condition? Perhaps, just as Fischer Black's noise traders provide liquidity in financial markets, lies and those who trade in them provide a kind of liquidity in the extended order.

Addendum: Women, you're in trouble. Apparently, only criminals are good at detecting lies.

Religion in China

More evidence of what Peter Berger has called the "desecularization of the world":

If the party is still trying to keep its members atheist, it is fighting a losing battle.

What's interesting is there appears to be a fairly even split among the five recognized religions, at least according to the Chinese Foreign Ministry. Buddhism claims the most adherents (100M) and clergy (200,000), while Protestantism claims the most places of worship (55,000). I suspect this diversity is a major factor behind the government's shift towards religious freedom. That and apparently the government fat cats have figured out how to milk the religious, which probably means they favor the religions which tolerate bribery. But I think China is large enough that the religious diversity factor is sending them down the path towards a free market in religion. It may one day end up being more free than many European countries, which continue to favor an official state religion.

Modern Drunkard

So, Robin Hanson again shocked us with the facts last night in health econ class. Most compelling to me, and all the undergrads who were there, is the apparent health benefits of drinking. This is different than all those reports about "one glass of wine per night turns out to be healthy." The statistical evidence indicates there is no upper limit on the health benefits of drinking, ie the more you drink, the healthier you are. Why does this not make the news? Well, you may have guessed that government and other paternalistic organizations don't like the message.

And I would agree, based on the reaction of the undergrads. I certainly didn't need this information in college. I almost wish someone had told me "drinking makes your stomach hurt, because everytime you take a drink I'm going to punch you in the stomach."

One wine hangover will convince anyone that drinking cannot possibly cause health benefits. So, Robin offered up an alternative explanation: drinking signals health. At least in part, people drink to signal their health. The last guy standing is the alpha male. Maybe that was my problem, I never figured out the standing part.

So this may explain why drinking is so prevalent on college campuses. Young'ns have a comparative advantage at drinking a tremendous amount without taking on that evil, drink-sodden look. Does this mean we should consider moving the drinking age up to 22, or 25? After all, it does appear to be a market failure, of the kind Robin was referring to in his signaling example.

At Sewanee, Max will remember the university banned kegs during our second semester freshmen year. The first semester was truly a drunkard's dream. Free beer everywhere. The ban made drinking beer a little more expensive. So we switched to whiskey. It was more fitting anyway, since Sewanee is located in the hills of East Tennessee, surrounded by distilleries. My point is that I doubt there is any good way to actively suppress such an effective signaling equilibrium.

In Europe, as we know, youth drinking laws are less restrictive. And youth drinking appears to be less of a problem. I speculate that this has more to do with alternatives to drinking, while the laws are of little consequence. Being surrounded by castles and art museums, as opposed to hillbillies and 'stills, the signaling in Europe occurs along more refined cultural dimensions. This factor alone may explain why K-12 produces better results in Europe, as I wondered in a previous post.

This illustrates another of Jane Jacob's major themes, which she focused on in The Death and Life of Great American Cities. It is that cities, as the highest form of human civilization, offer many more benefits than costs. In economic terms, the positive externalities, e.g. networking, far exceed the negative externalities, e.g. pollution. See more on this here.

I wonder if she knew about Robin's health stats that indicate city living takes 15 years off your life. Smoking only takes 3.

Bottomline: I'm not really sure where this leaves us. But it's happy hour at the Big Hunt.

French culture from an English perspective; a continuing series

Max, a little taste of home for you. (HT to Tyler).

And how do you lure the right stores in, assuming you can decide what the right ones are in the first place? Jane Jacobs doubtless has some answers, but this [is] France. If you give the Parisian city government a slush fund to subsidise interesting shops opening on the Champs Elysees, hey, guess what, the mayor's best friend's brother-in-law has just decided to go into the bespoke millinery business.

My general point is that, for as long as the French think they can suspend the laws of economics in a 400-mile mile radius around Clermont-Ferrand, we should delight in any weird policies they may attempt (eg, declaring yoghurt a strategic industry; imposing a 35 hour week and then regretting it). Just to see what happens.

Actually, Jane Jacobs would recommend intervention in this case. She claimed that neighborhoods tend naturally to become specialized and homogeneous, and so government should zone for diversity. That's about the only idea of hers I don't like. How is the government's definition of diversity better than that of the neighbors who live there? And why should we expect the government to more effectively, ie efficiently, achieve diversity?

Tolerance as a virtue

As Fr. Connor argued yesterday, that's the gospel according to Oprah, but it is not the Christian Gospel. Tolerance is not a Christian virtue.

Well, I checked up on this, and he's right, there is no obvious way to construe any of the seven virtues as tolerance. By the way, this sort of thing is news to me, since I was not raised Catholic, and spent most of my formal education in public schools. I have an excellent grasp of "current affairs" and "Alabama history", but no real idea what the hell moral philosophy is.

What I've learned is from economists like Deirdre McCloskey, who argues in her new book that economists have for too long focused on prudence, and ignored the other six virtues: temperance, courage, justice, love, hope, and faith. This derives from the grand daddy himself, Adam Smith, whose most influential book, "The Wealth of Nations", deals primarily with prudence. His other book, "Theory of Moral Sentiments", deals with temperance. She argues he intended to write a book about justice as well, but died before he could. P. J. O'Rourke, in his new book, argues that Adam Smith instead lost the nerve, after realizing that his policy prescriptions at the end of "The Wealth of Nations" were rediculous.

Fr. Connor further argued that our national obsession with tolerance derives from the Civil War, in which more Americans died than in all our other wars combined. I've always found political correctness objectionable, but never wondered really where it came from. My experience in Europe tells me Fr. Connor is at least right about the facts: we are different. In Europe, you can call a spade a spade. Of course, this is also means you can call an immigrant all sorts of horrible things. But I don't think European zenophobia and racism derives from this liberty. Rather it comes from homogeneity, and specifically a lack of interaction with immigrants.

The same can be seen in the American South, where very little immigration in the last 200 years has produced a relatively homogeneous culture. No doubt, the South is a richly colorful place, and quite unique and interesting when compared to, say, the Midwest. But that's living off the past. Today it is marked more by intolerance. Nothing a few million Mexicans can't fix.

Addendum: Turns out immigration is more complicated than I thought.

Skip the ATMs, especially in India

I haven't used an ATM in years. Being an economist, ie cheap bastard, I instead use my Discover card to get cash at the grocery. I've never understood why so many people are willing to pay those fees. Maybe because the fees are really quite low when compared to those in other countries. Now I see why microloans are so popular there.