Monthly Archives: August 2012

The Opportunity Costs of War

“War costs more than its expense,” a wise writer has said; “it costs everything it stops from being earned.”

-Benjamin Constant, Principles of Politics Applicable to All Governments, p.281.

The wise writer in question is Jean-Baptiste Say, one the 19th century’s finest economists.

The Dark Ages Weren’t so Dark, and Neither Is Modernity

I’m currently reading Barbarians to Angels by Peter Wells, which is a mostly successful attempt to rehabilitate the Dark Ages’ dismal reputation. The written sources are mostly from the Roman perspective, so one understands their rampant pessimism. Wells, an archaeologist, prefers a different historiographical method: archaeology. There is more to history than mere texts.

Roman inventions such as concrete were lost, and though literacy did not disappear, it wasn’t anywhere near where it was in Roman times; there was decline. But civilization did not die. International trade stayed alive, and with it the swirling exchange of ideas, customs, religions, and inventions that accompany commerce. Artifacts from as far away as India, Sri Lanka, and China have been found in Dark Age sites in Sweden and Ireland.

The visual arts remained vibrant, even if the written arts didn’t. Of course, illuminated manuscripts such as the Book of Kells provided their own vibrancy, even if in their illustrations and not in their actual text.

All in all, Wells has not persuaded me that early medieval Europe was the technological and cultural equal of the Roman Empire. But he has certainly vanquished the myth that the Dark Ages were as dark as the popular imagination believes.

Much as I love history, the real reason for this post is to point out just how well we moderns have it. In chapter 12, Wells writes the following about one of the 8th century’s greatest scholars:

The most prominent scholar of this period was Bede, a man of Anglo-Saxon origins who was born in northern England about 672 and died in 735. At the age of seven he entered the monastery that was based at the neighboring sites of Wearmouth and Jarrow, in Northumbria, just at the time that this monastic complex was reaching its apex of cultural achievement. The library at the monastery contained some five hundred books, making it on of the most extensive in Europe at the time.

Let’s put this in context. My Kindle e-reader, which fits in my hand, can hold more books than the finest library in all of 8th-century Europe had to offer. Just imagine what a mind of Bede’s caliber could accomplish with today’s intellectual resources.

That’s not all. Now think about today’s 7-billion-strong global population, and compare it to the fewer than one billion people alive in Bede’s time. There are at least an order of magnitude more people alive today with Bede-level intellects. And most of them have access to university libraries and the Internet. What will they accomplish?

We truly live in amazing times.

Regulation Roundup


The latest goings-on in the world of regulation:

Friends-of-CEI Susan Dudley and Jerry Brito are authors of the new second edition of their book Regulation: A Primer. I finished it yesterday, and highly recommend it to anyone interested in the topic. The book covers the different types of regulation, the rationales for regulation, and most importantly for would-be reformers, the regulatory process. You can download an unpriced PDF copy at the link.

North Haven, Connecticut doesn’t allow livestock to live on properties smaller than 2 acres. That’s why one overzealous zoning official wants the Lidsky family to give up their pet rabbit.

Reason’s Mike Riggs with the 5 dumbest drug laws in America.

In Iceland, parents must pick their child’s name from a government-approved list. One condition is that another Icelander must have had the same name. You can view the list here.

An Arizona woman was told to stop handing out bottled water on a 112-degree day because she didn’t have a permit. The woman is thinking of suing.

Chattanooga does not like pedicabs. Eleven pages of new regulations cap their number at six, and institute strict equipment and licensing requirements. From the news story: “When asked what he’d tell another entrepreneur considering starting a business in Chattanooga, Thoreson replied, ‘Stay the hell away.’”

In the UK, you must have a liquor license to sell alcohol. One clever entrepreneur is giving it away for free in his “furniture store,” encouraging tipplers to browse his wares and buy £2.75 beer mats. By giving beer away, he isn’t technically selling any alcohol, so he argues that he doesn’t need a permit. Angry officials had no choice but to cede the point, but will likely amend the law.

CEI Podcast for August 23, 2012: Bailouts as Corruption


Have a listen here.

Senior Fellow Matt Patterson argues that when government is big and powerful enough to dispense favors like bailouts, special interests will flock to Washington to get a piece of the pie. Corruption is the inevitable result, as the GM/Delphi/UAW bailout showed. The only effective way to limit corruption, Patterson argues, is to limit government.

Regulation and the Green Bay Packers


In today’s Wall Street Journal, Kevin Clark offers a novel theory for the Green Bay Packers’ long run of success under GM Ted Thompson: a clone army.

Deep in the wilds of the Upper Midwest, Green Bay quietly has recruited a regiment of interchangeable players. The team’s novel idea is to find players—usually linebackers, tight ends or fullbacks—who can play in a variety of formations and situations because they’re virtually the exact same size and weight. The ideal specifications: 6 feet 2 and 250 pounds.

As Packers tight end D.J. Williams explained, only 46 players are allowed to dress for an NFL game. Every team has to cobble together its starters, reserves and special-teams players from those 46. “So if you can have one person doing what three people can do, it may only be 46 people dressed out there but it’s like having 60,” said Williams, who at 6 feet 2 and 245 pounds is roughly the magic size. “It’s a great advantage.”

It’s Moneyball adapted for football. Find a hole in the market — in this case, players who are a size that other teams shy away from — and mercilessly exploit it. Fellow regulatory scholar and (and fellow Packer fan?) Richard Belzer points out a lesson this teaches about regulation:

This is an excellent example of how market forces lead to efficient resource use, even under a stringent regulatory regime, so long as regulated parties are allowed to comply any way they see fit…

However, in other sports (e.g., stock car racing) performance standards give way to design standards that seek to prescribe every conceivable input into the production process. They inevitably fail for two reasons. First, there is always some production margin the regulators didn’t think of. Second, regulated parties invest extraordinary sums to search for and exploit loopholes.

In other words, regulation works better when it sets a standard without prescribing exactly how to meet that standard. The NFL has a 53-man roster limit, but it doesn’t prescribe how many linemen or quarterbacks the team must carry. That’s up to the GMs. Not only does this type of regulation open up another level of competition for fans to enjoy — front offices, not just players, trying to outmaneuver each other — but it prevents cheating. Lessons abound.

FDA Rules Won’t Work, Will Harm Small Farmers

The FDA recently decided to delay implementing about $1.4 billion of food safety regulations until after the November election. The ​USA Today​ editorial board argues in today’s paper that the FDA should stop dragging its feet and enact them now. They were kind enough to give Greg Conko and me some space to put forth an opposing view. We think the FDA should scrap the rules entirely for two reasons: ineffectiveness and rent-seeking:

These rules, being drafted to implement last year’s food-safety law, will waste billions of dollars on antiquated practices unlikely to do much good. They will, however, aid giant food corporations by hobbling smaller competitors and make it harder for companies of all sizes to adopt innovative safety methods and technologies.

Enacted in response to 2010’s massive egg recall, the law will spend nearly $1 billion to double the number of inspections on farms and in food processing facilities. That may sound appealing, but it only means that most facilities will be inspected every five years instead of every 10. Designated “high-risk” facilities would be inspected just once every three years.

Read the whole thing here.

Slow News Day

Politico: @PaulRyansMom is not Paul Ryan’s mom

Twitter strikes again.

There Is Nothing Left to Cut


The city of Detroit’s water and sewerage department employs a horseshoer. He makes “$29,245 in salary and about $27,000 in benefits”.

The department does not use any horses.

The Economics of Spam

Timothy Taylor summarizes a fascinating new paper on the cat-and-mouse game between e-mail spammers and service providers:

For example, when many people label a message as “spam,” then it helps the anti-spam software to look for those words or URLs repeated in other messages, so that those messages can be filtered out. But then spammer responded with creative misspellings (like “VIagrA”) to trick the anti-spam filter, and used many different URLs that would all take the unwary to the same sales page.

In addition, the spammers use software to mark messages as “not spam,” thus trying to offset those who label them as spam. Rao and Reiley write: “In four months of 2009 Yahoo! Mail data, our Yahoo! colleagues found that (suspiciously) 63 percent of all “not spam” votes were cast by users who never cast a single “spam” vote.”

Talyor also kindly links a free download of the paper, published in the Journal of Economic Pespectives, which he edits.

CEI’s Battered Business Bureau: The Week in Regulation


Just another week in the world of regulation:

  •  65 new final rules were published last week, down from 68 the previous week.
  • That’s the equivalent of a new regulation every 2 hours and 35 minutes — 24 hours a day, 7 days a week.
  • All in all, 2,431 final rules have been published in the Federal Register this year.
  • If this keeps up, the total tally for 2012 will be 3,868 new rules.
  • 1,943 new pages were added to the 2012 Federal Register last week, for a total of 49,910 pages.
  • At its current pace, the 2012 Federal Register will run 77,985 pages.
  • Rules are called “economically significant” if they have costs of $100 million or more in a given year. The 28 such rules published so far in 2012 have compliance costs of at least $16.37 billion. Two of the rules do not have cost estimates, and a third cost estimate does not give a total annual cost. We assume that rules lacking this basic transparency measure cost the bare minimum of $100 million per year. The true cost is almost certainly higher.
  • One economically significant rule was published last week.
  • So far, 248 final rules that meet the broader definition of “significant” have been published in 2012.
  • So far this year, 460 final rules affect small business. 63 of them are significant rules.

Highlights from final rules published last week:

  • Last week’s economically significant rule comes from the EPA. It changes offshore oil drilling procedures in the wake of the 2010 BP spill. You can read the 137-page rule here; Politico kindly summarizes it here.
  • The National Mine Safety and Health Review Commission is moving its headquarters.
  • The Pagosa skyrocket, Parachute beardtongue, and DeBecque phacelia are more than cool potential band names. These plant species are the beneficiaries of critical habitat designations, courtesy of the Fish and Wildlife Service.
  • If you would like to request that a tv show be closed captioned, take note that the FCC has changed some of its relevant terminology.

For more data, go to TenThousandCommandments.com