Any Catholics out there want to stick up for this one? The Church really has its priorities out of whack...it seems they have lost all ability to do cost-benefit analysis, and are perennially willing to stand by as large tragedies happen in order to avoid smaller ones.

Trivia Time

What do the following people all have in common?:

Meg Ryan
Tim Curry
Ed Asner
John Ratzenberger
Jeff Goldblum
Martin Sheen
Sting

(Also, though less famous: Maurice LaMarche, Frank Welker, David Warner)

Highlight of my day: packing up my laptop case for a short trip without having to think "Should I pack my GRE book?"

Thing that immediately brought me back down to Earth: realizing my "pleasure reading" consisted of a book about economics and a book about social/psychological research.

So, it seems like people with economics degrees find this comic a LOT funnier than people without economics degrees...

Would Jesus Be A Capitalist?

Michael Moore, as part of his anti-capitalism campaign, is sending around an e-mail asking if Jesus were alive today, would he be a capitalist, or would he be opposed to capitalism? Here's my response:

Name an economic system that would be better for the poor than capitalism. Seriously.

Sure, it creates big gaps between rich and poor, but would Jesus want you comparing your life's worth to the life of your neighbor? The poor in America have a better standard of living than the poor in most non-capitalist countries, with more opportunities for social mobility as well. A poor person in capitalist America is better off than both a poor person pretty much anywhere in non-capitalist Africa and a poor person anywhere in the world during the time of Jesus. Heck, they're better off than most rich people in both those situations (certainly most middle-class people). Better access to healthcare, education, resources, the tools for self-improvement, travel opportunities, social and socioeconomic advancement and development...

And to those who make the argument that those are trappings of modern society and not of capitalism itself, which economies invented all that stuff? Communist and socialist countries lagged behind the societies which lavishly rewarded those who brought tremendous value to those societies. Not everyone's a genius and a saint like Norman Borlaug. We're human, by and large, and respond to incentive structures. Life saving medicine is invented by pharmaceutical companies who expect patents on their $50 pills which save the taker a $10,000 operation (which itself was once not that big a price to pay for 20 more years on Earth). The best way to make money in a well-run capitalist economy is to provide things people want, that make their lives better. Sure, we've got regulatory gaps, but to abandon the system entirely? I don't buy it.

To those who say "OK, fine, capitalism was good, but now it's run its course. Let's go another direction," I reply: "What about tomorrow's poor?" Do we want to freeze the state of poverty, redistribute the wealth, and squelch innovation? Crawl along in a dangerous world not giving people strong incentives to better everyone? Capitalism was worse a hundred years ago than it is now...the current crisis highlighted some steps back, but we're still far ahead of where we were. We're making progress within capitalism, and the capitalists are making more progress than others.

What's the alternative? Non-capitalist countries are quickly adopting capitalist activities and policies, but the reverse isn't happening. Even successful "socialist" countries are really capitalist countries with socialism-inspired domestic policies. And they wouldn't be where they are today without the help of capitalist friends and trading partners.

Yes, we need a better safety net. Yes, we need to regulate markets and correct for market failures. But the dirty little secret is America won't really fail because capitalism will tumble...the Visigoths at our gate are not socialists, communists, or anything else. They're capitalists, who will beat us at our own game, the only game in town among superpowers, nations on the rise, and great societies. They'll better regulate, better incentivize, better innovate, better create...solar panels are coming from China and Germany; wireless innovations are coming from developing nations without legacy systems and inflexible out-of-date policies like India and Israel; we're being out-manufactured by places that can do it cheaply--and in doing so take the poor out of the streets and put them in bad jobs, but jobs nonetheless. Jobs where there were none before. And all these countries are coming around to capitalism.

Would Jesus be a capitalist? Would he find jobs and dignity for the poor? Would he help invent life-saving drugs or safer cars or cleaner energy? Would he sell software to help us make better decisions, and donate the money to a big foundation to level the educational playing field? Would he still walk around the countryside talking to people dozens at a time, or would he go with a book, a blog, a podcast, a TV segment, an Op-Ed? Almost 7 billion people, can't save them one at a time anymore.

He might not speculate in the derivatives market, because it's more or less a zero-sum game...but would he frown upon a farmer buying a weather derivative that pays off in case of an extra-dry season, giving him enough money to get by and replant next season? Would he tell Merck to close up shop? Would he disapprove of accessing capital markets to raise funds to build a hospital? Darn right Jesus would be a capitalist were he alive today. Just like the rest of the Jews.

Geek Movie Plot Holes

So Wired magazine published a list of the Top 10 Unanswered Questions in Geeky Movies. (HT: Neat-O-Rama)

I thought it was a good read that merited sharing, but not without comment. A few of these plot holes aren't really plot holes at all. Specifically, the Star Wars ones. Maybe some of the others have explanations too, but I don't know enough to offer a rebuttal.

Quoting from the article:
"4. Star Wars: The Death Star’s slow attack - So the Death Star follows the tracking device on the Millennium Falcon to the rebel base. They jump out of light speed, and, for no clear reason, emerge on the far side of the planet Yavin from the moon where the base is. This light-speed jump takes a split-second, but now they have to wait minutes so they can clear the planet. Not only that, but the Death Star is capable of blowing up entire planets, not just moons, so why don’t they just blow up the entire planet of Yavin? Surely that would effectively destroy anything on its moons as well."

Resolution: The Death Star is a giant space station that travels very slowly. Hyperdrives (the faster-than-light) technology operate on completely different principles than the sublight drives. The Death Star followed the Millennium Falcon to the Yavin system, and once it got there, had to use its slow engines to get around the planet (the long lag time makes sense). Why not hyper-jump around the planet? Hyperdrive jumps take a while to calculate, and gravity is a big obstacle that limits where you can go safely. Intra-system jumps were never part of the story--hyperdrives only get you from system to system.

Why not blow up the planet Yavin itself? This one bothered me too, and several answers come to mind. One, it's a gas giant, so blowing up the relatively tiny core might not be a guaranteed kill against the moon, especially if most of the planets mass is actually in the gas or there are other strange principles at work (magnetic ones come to mind, but I won't expand on that here). Why not blow up the planet, THEN blow up the moon if you miss? I'm guessing a giant superlaser like that takes long enough to recharge that it made sense to go for a guaranteed kill after a 20 minute trip than to risk having to wait around for hours (maybe more) for your second shot, giving the Rebels plenty of time to evacuate.

A bigger unanswered question in my mind would be: why didn't the Rebels start evacuating the moon of Yavin IV immediately, just in case 24 one-man fighters didn't manage to destroy a space station that was 235 miles in circumference?

"2. The Empire Strikes Back: Time dilation - Luke and R2D2 leave Hoth to go to Dagobah at the same time Han, Leia, Chewbacca, and C3PO leave to go… well, they never really say what their initial destination is. Anyway, on Dagobah, Luke embarks on an intensive Jedi training course with Yoda — it’s never stated, but it’s heavily implied that this takes a long time; and besides, you would think a full course of Jedi training would take at least months, right? (We know it’s a full course, because when Luke comes back in Jedi, Yoda tells him he doesn’t need more training.) So, at the same time that Luke finishes this months-long training and runs off to Cloud City, his friends have clearly just gotten there a short time before. Yet all they did on the way was flee from a Star Destroyer and fly down the gullet of a giant space worm. That must have taken hours, not months. So was the Millennium Falcon flying at close to the speed of light (but not at light speed) for a while and thus experiencing time dilation? Yeah, that’s the ticket."

Resolution: This one's pretty easy: the Millennium Falcon's hyperdrive was out. They had to make the trip from Hoth to Bespin at sublight speeds. I think it's more amazing that didn't take YEARS, as planets are typically pretty far apart (and Hoth was in a supposedly remote region). What's amazing here isn't that Luke's training was so short--it's that the OTHER storyline was so chronologically compact (or, conversely, that the training was so long and the Falcon had enough emergency rations so no one died of starvation or dehydration along the way).

My Question

My favorite blog on the internet published an interview today with Tim Harford, the "Undercover Economist." The way Freakonomics interviews work is that readers submit questions, and the interviewee picks a few of his or her favorites to answer. Well, I got a question in this time (the 5th of 8 in the interview). I was excited to see it there, and appreciated the response. I have my own comments, but I thought I'd share it with my readers and see what you guys think first.

Is it me, or does it seem like the Philadelphia unions (or at least their leaders) don't care how bad things get, as long as they don't get the blame?

Consumer Marketing Question

The more choices a person is faced with, the less likely they are to make a choice at all. People are almost 10 times more likely to buy jam if they have to choose from 6 jams than if they have to choose from 24. For every 10 extra funds in a 401k program, participation goes down 2%. People don't like having too many choices, unless the choices is fun to make and variety adds real value (like choosing sundae toppings, or in nerdy cases, configuring a new computer).

OK, keep that in mind. Now consider marketing tactics: multiple brand names is often a dominant strategy. If there are 6 laundry detergents on the shelf, and people randomly select, Company A has a 17% market share. But by coming out with 4 new brands, all pretty much the same thing, they now have 5/10 instead of 1/6. 50% market share. And that strategy also works with just about everything else in the grocery store.

Now combine these, and you have a real prisoner's dilemma in consumer goods marketing. More brands and choices means a bigger slice of the pie for a company. But more brands and choices also means a smaller overall pie for non-essential products.

How do companies balance out these interests? There's clearly a rational limit on the number of choices you can offer in a grocery store, but that number--and the number of choices many consumers are given--is almost certainly larger than the number that would maximize the size of the pie. And there's another cost--as producer sales and producer surplus rise, consumer surplus also rises, because individuals won't feel incentivized to skip a first choice product for a substitute that's easier to navigate. At the very least, it lowers transaction costs (choosing costs, including effort and time), which is a gain for consumers.

How does this tug of war dynamic play out in marketplaces? Would it even be legal for companies to agree to limit branding diversity, even if it's for everyone's benefit? Is there a simple strategy, like in a prisoner's dilemma problem, that's clearly dominant? Or even a simple strategy that's clearly good?

Star Wars Food