Entitlement

Last night my parents took Petek and I to see “Big Top Chautauqua” outside of Bayfield, Wisconsin.  The show was about the history of Minnesota, and featured a whole bunch of black and white pictures of daily Minnesotan life from the late 19th and early 20th century.  There were a few historical events that I was surprised to have never heard of, and the live music was great, but my strongest impression was of the roughness of life during that period.  In the expressions of the people in the photographs, I was reminded of my days in the countryside of China.  After living in China for a while, I realized that people expected much less from the government.  They knew that if they got sick or hurt, there would be no government safety net to take care of them.  They knew that they had to make plans (children) so they would have means to get by in old age.  Often, I felt as though people were just trying to get by.  I imagine Minnesotan pioneers would have had a similar attitude.

Test Tube Murder?

Would you support the right of a pregnant woman to abort her pregnancy against the wishes of the father of the fetus?  What about the right of a father to abort a fetus against the wishes of a pregnant mother?  If babies could gestate outside a woman’s body, would you reconsider your responses?

This type of technology might also refocus the abortion debate.  Megan McArdle is right on the money here:

Pro-choice advocates don’t talk so much about the right not to be a parent; they focus on the right to control your own body.  That’s also where the constitutional law seems to be focused, or so I read the right to privacy.  The minute you can take an aborted fetus and put it in an artificial womb, that argument falls away, and we get down to what pro-choicers really care about:  not having a kid.

The Truth about Human Nature

A United Kingdom university published the oldest joke in the world today.  At the same time, you give some modern humans a little leeway, and look what happens.

Some things never change.

What’s it about Migration

One of my goals this Summer is to come up with a topic for my master’s thesis, which will be due at the end of next year.  The broad subject is migration, and I am going to write macro theory.  I currently have a few half-baked ideas, but nothing specific enough yet:

1.  I think migration networks are really important for deciding who migrates and who doesn’t.  When I was in Turkey, it seemed like all the Chinese I knew there were from the same city and China, and all came through connections with family or acquaintances.  There is some literature about this, but not as much as might be justified.  The problem is I can’t think of anything very original to say about it.

2. While migration networks are important for the expansion of migration once it starts, they can’t explain why migration starts in the first place.  In other words, why do some countries have large out-migration while others don’t?  I read an article about Singaporean guest workers just now, and it mentioned Malays, Bangladeshis, Indonesians, and Filipinos.  What about Thais or Vietnamese?  Filipinos, for instance, are famous for migration all over the world.  Why aren’t Afghan’s?  I don’t know the answer to this question, but it might be a good research direction.   There is a parallel to the very well researched question of why countries with similar beginnings have divergent grow paths (like Italy and Germany, say, or South Africa and Zimbabwe).

3. I am also considering writing something about guest worker programs.  This is an important topic for the United States, Japan and the European Union at the moment, but once again, I currently don’t have anything terribly original to add.

Taiwan in Trouble

I have been fairly well convinced by Robin Hanson and Bryan Caplan that prediction markets are a good way to get informed information about the likelihood that something will happen.  Basically, prediction markets combine the so called miracle of aggregation or “wisdom of crowds” with the idea that the more someone is sure something will happen the more money he will be willing to wager on it.

The converse of trusting prediction markets is that when I disagree with them, I have to justify why I don’t agree, or maybe what I know that other people don’t.  I find this market on the likelihood of a Chinese attack on Taiwan by December 2010 worrying.  It has enough volume (>4000) to be accurate, and is trading at twenty five dollars a share.  This implies that there is a twenty five percent chance that an attack will happen.

This is far higher than I would put the likelihood of a mainland operation.  I would put it down around three or four percent.  In my opinion, the only likely situation in which an attack might happen is that the Chinese economy goes through a steep downturn, the current Communist administration falls, and the military takes over.  Chinese can be very nationalistic, so the military might view an attack on Taiwan as a way to consolidate power.

But in the absence of such a catastrophic turn of events, I can see many reasons why the Communist leadership of China would not want to attack:

-The new Taiwanese president, Ma Yingjiu, favors closer relations with the mainland.  Why attack when the winds of unification are blowing in the right direction anyway.

-An attack on Taiwan would alienate just about every foreign country.  China would face military action from at least the United States, and heavy sanctions from others.

-Any sort of military operation would cause instability within China’s economy.  Foreign exports and imports would certainly be affected in the short run.   Since the Communist party has no electoral mandate, it is in a much weaker position than many assume.

-The long run economic effects would be disastrous for China.  In the medium term exchange with most developed countries would certainly be curtailed.

-Even if the Taiwanese army had no foreign help, it would be a difficult force to defeat with its advanced American firepower.  In the event of an attack, there would be foreign help.  The Chinese can’t count on an easy victory.

My guess is that the disconnect between the market and me is caused by my knowledge of Chinese and recent experience in China.  I think foreign China experts tend to view the Communist party as being stronger than it is, and also reading too much into saber rattling headlines in mainland Chinese newspapers.

Maybe I should short some shares…

Does the Import of Manufactured Goods Destroy US Jobs?

One of the implications of being home rather than at school is that at home not everyone has drunk the economics Kool-Aid, so to speak.  I have to grapple with opinions that I never hear around campus.  One frequently raised issue is trade with China, more specifically the effects of importing of manufacturing goods and having a negative balance of trade on manufacturing jobs and the US economy as a whole.  Many people at home think that the negative balance of trade destroys US manufacturing as Americans buy more imported goods.

Russel Roberts, the host of Econtalk, has a great essay responding to this point of view available here.  You will have to check out the original for the excellent charts that back up each of his claims, but his main points are the following:

1. Even though the United States has only run a persistent trade deficit since 1976, the long term increasing job creation trend did not change after 1976.

2. The relative number of manufacturing jobs to other American jobs has declined steadily since World War II, with no trend change in 1976.

3. During the same period, there have been huge productivity gains in American manufacturing.  Roberts shows that even though there are less manufacturing workers today than there were in 1959, there is 4.7 times more domestic manufacturing output today.

Roberts makes a few more points as well.  Read the whole article if you get a chance.

Pushing and Pulling towards Taiwan

I am taking advantage of my summer vacation to read up on the economics of migration, the topic on which I am going to write my master’s thesis.  Today I read part of one of my adviser’s papers about the effects of migration on fertility.   The underlying factor driving migration in her model is the differential in wages between rich countries and poor countries.  The idea is that the larger income increase an individual can get from migrating, the more likely he is to go.

The idea seems straightforward enough, but then I thought about my adviser herself.  She got her PHD a few years ago from UCLA, and for academics with American degrees there are few barriers to migration.  Combine this with the fact that teaching in Taiwan pays very, very little compared with an American university position (~$30,000/year vs. $94,000/year), and it seems like my adviser’s model would have a hard time explaining her own behavior.  Moreover, every single one of my professors last year at National Taiwan University had an American degree.

I suppose that proximity to one’s family or living in a familiar culture could also be considered wage factors, but with such a large nominal gap, one would not expect so many professors with American degrees to teach at NTU.

Elections and Torture

Last night my family and I had a discussion about whether or not it makes sense to vote.  I was arguing that since state or national elections are never decided by one vote, it doesn’t make sense for any individual to vote since voting is costly in terms of time.  Although our family friend Craig Ostrand, a Republican, was thrilled that I was thinking of not voting, the rest of my family chimed in with the usual argument: My point is correct for an individual, but if everybody thought that way then no one would vote. Therefore, everyone should vote to prevent the outcome in which no one votes.

The whole discussion reminds me of Derek Parfit’s Harmless Torturer story.  Even if each torturer adds an unnoticable amount of pain to a victim, since together they cause pain what they are doing is still bad.  I often think of this example when confronting moral problems.  A single person littering, for instance, may not make the streets of a city noticably filthy, but the behavior is still bad.  Similarly, I don’t expect the meat industry to close down since my decision a few months back to become a vegatarian.  But I still think that being a vegetarian is good.

Voting seems like a similar case.  My family was right to point out that if everyone thought that voting was irrational and didn’t vote, then elections would cease to work.   Of course, once few enough people were voting, a rational person would begin voting again since a single vote would be worth more, but that is beside the point.  The most important difference between Parfit’s torturers and voters is that we all agree that torturing is bad, but it is not necessarily true that voting is good.  Without getting into a discussion of the moral status of voting, it is at least plausible that an intelligent person might consider voting amoral.  If voting is not good or bad in a moral sense, than one is free to decide whether the cost of taking time to vote is worth the expected impact of one’s vote on an election without considering the moral implications of everyone else not voting.  On the other hand, if one believes that voting is virtuous and not voting is wrong, than one has a responsibility to vote.

When money becomes meaningless…

Maybe the residents of Zimbabwe should think about cowry shells or gold coins…

My First Earthquake

Petek and I were just getting to sleep last night when the walls started shaking.  We jumped out of bed, but before we could figure out what to do it was over.  The shaking lasted for about ten seconds, and there were several noticeable aftershocks over the next hour or so.

According to the news, the earthquake registered 6.0 on the Richter scale.  The epicenter was near Ilan, about 20 miles away from our apartment.  This was a moderate to strong earthquake and frightening enough, but it was (of course) dwarfed by the size of the Sichuan earthquake last month.  Since the Richter scale is a logarithmic measure of shaking amplitude, last night’s earthquake shook us 1/100th of the amplitude that the 8.0 Sichuan earthquake shook the Chinese (10^(8.0-6.0) = 100).  Making the comparison more complicated, the power of earthquakes apparently scales at 1.5 on the Richter scale, so last night’s earthquake was 1/1000 as powerful as the Sichuan earthquake ((10^(8.0-6.0))^1.5 = 1000).

The most surprising thing about the experience was that no one mentioned it this morning.  When I brought the earthquake up, my classmates told me they felt it but thought nothing of it.  Foiled again by habituation.