Every once in awhile I run into people who tell me they don’t eat meat. Being an institutionalized meat eater the natural question that I ask is “why”. From there the answers can range from dietary to religious reasons, but every once in awhile I get the “because I care about animals” answer. Here, a moral dilemma arises, but not the obvious one, the dilemma is, do I want these animals to be wiped out from the planet or do I want to eat them?
The fact is that eating animals is the best way to save them, if Panda’s were the tastiest animals on earth, a whole industry would emerge that would help them survive. I promise anyone that while chickens taste good, they will never be extinct. Evolution failed before and now it fails once again, the best way for all animals to survive is to evolve into tastier versions of themselves. Do chickens or cows really have a shot at surviving in the wild? It’s very likely that if we stop protecting them, they will be wiped out very quickly by bigger predators. We value productiveness in our economy so the choice is between making animals do manual labour or eating them.
I can’t just favourite links I like anymore… navigating through my browser is a logistical nightmare… that’s what blogs are for I guess! Reminds me of that trick Dumbledore did in Harry potter where he removed his memory and put in that bowl.
So Greg Smith, a Goldman Sachs executive quit and had some things to get off his back, it wasn’t too controversial in my opinion since he didn’t go into much detail about the how the evolution happened. However some interesting commentary on the piece emerged. The bloomberg piece is also surprisingly entertaining and so is Tyler Cowen’s. But the best part are the spin off’s, Darth Vader leaves the empire and a Muppet themed one from bbc(its funnier if you’ve seen the movie). It also goes well with this graph(its clearer if you click on it):
A man who predicts how many Olympic Medals each country will get!
This 1min video on Patents
Here’s a earnings and the 1% picture:
A model predicting celebrity marriages! Here’s a sneak peak!
Another post by Cowen on the effects of Porn Watching!
More Star Wars! How much does the Death Star cost to build? Its about 13 thousand times the world’s GDP!
A fun TED talk on political irrationality:
Who rules the world?
Is the government an efficient charity?
Eight things we know about extending unemployment insurance
Seven things you learned about the transition from communism to capitalism!
And finally a stand up economist!
So my last post was about a critique of free markets so lets change direction. So what is price gouging? Its sort of like a limit on the profit margin you can charge, some states in the US have laws about how much margin you can make if there’s a disaster. So say a 10% margin limit means that if it cost you 100 dollars to come up with something you can’t sell it for more than 110. So why is this good? So you don’t get ripped off during a disaster, when your house is flying above your head, you probably don’t need some guy charging you 100 dollars for a bag of ice. On to the story:
A group of friends hear about a disaster hurricane event a couple of hundred miles away from where they are driving. So they decide to go buy packs of ice for about a dollar each and drive down to the distressed area. They then stop in front of some residential neighbourhoods and start selling the packs for 12 dollars a pack. Lots of people run to them and start buying, then the police shows up and arrests them for price gouging. The people of the neighbourhood see this happening and they start clapping to support the police.
So what has price gouging accomplished? Its easy to think that these guys were being immoral and taking advantage of the people. But now lets use economics… there’s a finite amount of ice… so what’s the best way to give it around? The way to maximize utility, so give it to the people who need it most… so how do we do that? Some people want the ice to keep their baby formula the right temperature, others want it to keep their beer cold, others might want it for their medication.
We are actually fortunate that the price system comes pretty close to achieving maximum marginal utility, how does it do that? by maximizing profit, the seller’s profits are probably maximized by selling all the ice at the maximum price he can get away with. People who just want to keep their beer warm won’t be willing to pay so much as someone whose health could be on the line. Would those friends even have showed up if the profit was capped at 10%? Would they spend hours driving to leave with a couple of dollars each?
The one disadvantage of the price system is that richer people will be negatively influencing the maximum marginal utility mechanism but in a given neighbourhood inequality probably isn’t very high and rich people might in fact still be inclined to think in terms of long term “value for money”.
So all this not to say that all price gouging is bad, since there are many times were it is used to prevent fraudulent activity or times where everyone could have the same marginal utility.
Perhaps the greatest appraiser of competition of all time is Hayek, in “the road to serfdom” he makes a point about competition being pivotal factor about why capitalism is one of the most efficient systems we can have because competition is an automated dynamic mechanism which cannot be replicated from a top down approach. It’s very hard to disprove that competition is great yet perhaps we can find holes…
So Robert Frank in the “Darwin Economy” describes an example of evolution being inefficient. Frank uses the example of competition within male deer. Deer compete with the environment to attain food and survive large predators, but they also compete amongst themselves over females. How do they compete? with their antlers of course, usually the bigger antlered deer’s wins the fights and get the female. So over time evolution dictates that they the average deer horn size will increase. Yet what matters is relative antlers size not absolute antler size, so in other words, the same hierarchical structure would exist even if all deer’s horns were halved. So if the deer could vote on decreasing everyone’s horn size(assuming they are rational) they would all vote for it because they would benefit as a species by not having to carry around X amount of extra weight when being chased by a lion.
So what’s something similar in the human competitive process. Once you get to thinking about it its very easy to come up with examples, interviews are one. What matter’s in interviews is that you be better than the other applicants(assuming a company is taking a fixed number of employees), so the more you practice the higher your chance of getting the job. But what if you could spend the months leading up to the interview actually getting better at the job? The whole world would benefit if everyone spent less time preparing for interviews and more time polishing their skills(which are sometimes not tested until your on the job).
Another example, maybe in dating, women favour blue eyes(not sure if this is true), but in reality blue eyes are more sensitive to sunlight and a genetic weakness because it usually means lower levels of melanin which means less protection from UV radiation.
This eugenics movement about optimizing the human race is completely misguided because it assumes which attributes are superior, Hitler deemed blue eyes to be superior… yet now we know they aren’t. You could argue that intelligence is an absolute that matters, but does it really? Steve Jobs wasn’t renowned for his intellect but his creativity, which is perceived to be exclusive from intellect and look at the value he created for the world. Even if we assume intellect creates more value how do we know it’s not because of the way we structured our society around it? Maybe if education was revamped other attributes would come out dominant. This kind of discrimination is the pretence of knowledge(start and finish with Hayek) and should not be taken seriously.