Searching for value
This comment confirms that it us still difficult to evaluate providers of public goods services. Why are there not more indicators? Why is the analysis kept under wraps? Where is the clearinghouse of market process that ruffles through the producers and shows the market who is getting business done?
Because without these feedback loops it is too tempting, as the Rev references, for people to privatize public funding.
Most objections to markets of private goods are that, in their exuberance, they roll on by some social concerns. The industrious plant pollutes; the labor market does not support all families; the tech firm runs the table to accelerate advancements in their field. It’s thought that markets allow the power of the purse to trample on the wants of the people.
So– the people make rules.
And that is where you see the counterarguments to the objection to markets. Even though we don’t think about it, marketplaces are formed by rules. Markets are a combination of people taking action, the objects in trade, and the marketplace where it all occurs.
New rules mean a new marketplace. And in that new marketplace, with either informal norms or formal rules around the social concerns mentioned above, a new set of prices evolve. In a bubbling and ever-unfolding process, the markets renew to the will of the consumers.
The morals of some groups will keep their marketplaces at arm’s length. The Amish live a lifestyle that remains separate from mainstream America. Some people will never buy crypto or derivatives as their uncertainty about the products gives rise to a fear of being duped. Others may only allow family members to care for their children.
But the argument that the combination of people, with all their human inclinations, along with the variety of goods and services they wish to voluntarily exchange, and the meeting place where buyers and sellers are brought together is inherently a moral abyss seems unsubstantiated.
Sometimes you don’t know what you consented to when you joined the team.
Two legislators and one Minnesota senator gave a town hall talk last Saturday. With majorities in both the MN House and Senate, a swarm of bills has been flying through committee and onto a vote. Let’s have a look at them.
Education: The schools are still (and always) underfunded. They need dollars. The plug’s been pulled from the bathwater as there was no depth offered to describe relative priorities, to meeting public expectations, to backing winning strategies.
Abortion: Many didn’t believe abortion was on the ballot until the votes were counted. And sure enough, the topic occupied the first hours of the legislators’ work. The right to an abortion all the way through the third trimester was codified into the MN constitution (not sure what they mean by codify, it’s their word). Winners: feminists and women of childbearing age. At risk: unborn babies and paternal rights. Losers: Religious ideology
The Surplus: The promise to return a portion of the surplus to the taxpayers is echoing more and more faintly. It really never was a return but a redistribution where people of lesser means received the most, middle income some, and wealthy folk nothing. Instead, the audience at this town hall was told of failing bridges and infrastructure. When you want to spend bring up the tangibles. There is more resistance to human services than to maintaining nuts and bolts public hardware. No offer of project eval or expenditure return on public use. The pols always declare the need, and steer clear of distinctive comparisons or hierarchical demand for public dollars.
Universal School Lunch: One might wonder if it is the best use of funds to pick up the lunch tab for those who can and might still provide their children’s meals.
Paid Family Leave: I’ve never heard a peep on how it was determined that enough folks were locked out of taking care of a few personal errands during work time to make a law worthwhile. Nor is there a whisper regarding whose pocket this human resource benefit will come from. I’m sure some people live in this uncomfortable pinch between time and money. Making a universal law benefit is great if most people need it. If it is given to everyone when one a handful are struggling, you have to wonder whether the donations to public funds would be best employed in another manner.
This is where I have to give my legislator credit. Here the school districts are being given additional funding only to have it taken from them to cover the paid family leave. Schools are public only in their function to educate children. Public institutions are employers as well. The legislator acknowledged she was hearing from her friends at the MN Teacher’s Union. Turns out that publically funded entities are employers too.
Which highlights the importance of coordination. Elected officials are only exposed to very limited voice. There’s got to be a better format to express the desires of the constituents in the manner public funds are allocated.
One starling is a bird, but a group of starling is something else.
There is an International Owl Center in a small about two and a half hours SE of the Twin Cities. It’s a beautiful rural area where mounding bluffs eventually fall into the Mississippi River to the east. Houston is a town of under 1000 residents and yet it is home to this organization dedicated to making the world a better place for owls. According to Trip Advisors, the center is the #1 attraction in town.
Owls are not easy to spot. On a winter walk in a park reserve nearby I noticed a couple’s gaze focused overhead on the canopy along the path. As my dog and I pulled up I followed their line of site and noticed what looked like an egg-shaped pillow perched on a branch. A fluff of feathers noticeable only by the size of the clomp. I’ve also heard them call, but then doubt what I heard and in which direction the sound originated.
It was through an MPR article that I found out about the owl experts. The Owl Prowl, an event where they take a group in search of the owls, caught my eye. Being led out into the woods seems like the best way to learn how to spot the creatures. Standing still in the cold during the two-hour outing would be totally worth it to spot the Eastern Screech-Owl or Barred Owl or the stately Great Horned. Unfortunately, it is completely sold out for the early part of the year.
There are simply so many worthy 501(c)3’s. It seems like there should be a better way to find out about them and what they do, and how efficiently they do it. These folks aren’t some big endowment holding funds for a rich patron. The organization is engaged in the work and interacting with the public and providing services to wildlife. It even used its resources to raise money for the children of Ukraine. Last year, artwork from Ukrainian children entered in their art contest was auctioned off. Over $250K was raised and sent to Unicef to provide relief in the war-torn country.
Melvin Carter is the young, dynamic mayor of St. Paul. Overall he has faired better in the public eye than other political leaders. The city of St. Paul however is endlessly struggling with increasing property taxes and decreasing core services such as snow removal.
The Rondo area of St. Paul was a predominantly African American neighborhood that was lost to the installation of I94 which runs between Minneapolis and St. Paul. Some property owners relocated to other areas of the cities. For instance, I know of one family who moved to Brooklyn Center as homeowners.
The viability of programs such as this always falters. But is it better to offer and campaign for a specific solution? I think so. It’s a reminder to people to make the effort to become a homeowner (and there already are so many programs available to make that happen). It’s a reminder that Melvin Carter’s family has taken this route and derived benefits from it. It’s an aspirational path that may just knock through some barricades- real or imagined.
Holidays are usually a time when we pull a 1500-piece puzzle out of the closet. There’s always someone who wants to jump in and help. Everyone has a preferred method to solving the picture of a Van Gogh or a photograph of a flower garden. Usually, the edge pieces are collected as they are easily identified by their smooth side. Those go together pretty easily. The next step is simply to group by color and try each one.
The interior sections are much more tricky. Sometimes you think you’ve matched the color but find out later that the underside of a shoe was really the shadow of a pot. The colors aren’t what they seem. Textures betray the eye. So grouping can only go so far. At that point, you have to let go of the images and focus solely on the patterns of the edges. Do they go in or out? Are they fat or just bitty things? And every once in a while your brain clicks- I’ve seen that before.
Grouping, and grouping some more based on more attributes, all contributes to solving the puzzle. Instead of getting persuaded by the golds and blues appearing out of some dream state, keep what makes the shards the same and what makes them different top of your mind. Then click- the edges are joined.
In ancient Rome, the legionnaires had a special maneuver to protect troops during an assault. When under attack soldiers drew in close and used their shields to the front of the group, to the sides, and to cover their heads. It is called the Testudo Formation, inspired from the latin word for turtle.
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Plutarch describes this formation as used by Mark Antony during his invasion of Parthia in 36 BC:
Then the shield-bearers wheeled round and enclosed the light-armed troops within their ranks, dropped down to one knee, and held their shields out as a defensive barrier. The men behind them held their shields over the heads of the first rank, while the third rank did the same for the second rank. The resulting shape, which is a remarkable sight, looks very like a roof, and is the surest protection against arrows, which just glance off it.[3]
Wiki
If you read Asterix and Obelix books as a kid you probably remember graphic representations that looked something like:
Once in this formation, the legionnaires must act as one. They walk together, hold the shields together, and plan their course of action together. As soon as the individuals behind all those shields act individually, the testudo fails to preserve the group. And just like on the fields of battle, formations are being formed and disolved all the time.
When you think about it, this aptly describes an economic phenomenon. When people take economic action to change their odds of a bad thing happening to them, when they coordinate with others for self-preservation, then they are engaging in a testudo formation. Everyone behind the sheilds benefits from the collaboration. Everyone outside the armored cloaking is either an advisory or left to fend for themselves.
Economic action to the outside of the legionnaires is competitive and follows the private market rules. Everything from within is public and follows public market principles.
This is important because the analysis thus far tried to follow the cause instead of the group. For instance, if you advocate for clean energy, advocates tell us to always choose renewables instead of fossil fuel, a gas instead of coal, etc. This evalutaion of priorities is to be honored by developping countries or western countries alike. But what we see is that this aspirational ordering does not hold up consistently in each market.
Due to the war in Ukraine, the European energy market is suffering from a lack of Russian oil. Instead of pursuing clean energy of any form, policymakers are choosing to revert to coal. Their testudo formation is battling other adversaries. Some of these are internal. This isn’t bad or good. It is simply a reality. But it is understanding where the testudo formations are occurring which allows for a proper analysis of the economic tradeoffs.
Susan Shirk, a political science professor at the University of California San Diego, says something interesting in this WSJ podcast. The discussion is undoubtedly a result of her new book, Overreach: How China Derailed Its Peaceful Rise. I have been following the power struggle for the South China Seas from outlets, in particular via Walter Russel Mead’s articles, also in the WSJ. China has been pushing the limits of its authority with the seeming intent of antagonizing its neighbors.
My perception is that an international power play would come from the very top, Xi Jinping. But Dr. Shirk indicates other government agencies inflamed nationalist sentiment and initiated a build-up in the struggle over the South China Sea (6:45min). Lower-level bureaucracies such as the “Fishery Bureau, Coast Guard, Marine surveillance… started pursuing the defense of China’s claims in the South China Sea, and as far as I can tell, the main objective was to get bigger budgets for themselves.”
Economic pressures contribute to dynamism in government agencies as well as the private sector. The various maritime agencies compete against each other for resources and will adjust the levers at their disposal to extract sources of revenue. If nationalism provokes a supply of public funding, then it is a good they have an interest in producing.
Part of every holiday season is bringing people together for meals. And in honor of traditions of food and drink many will set a beautiful table with dinner plates and salad bowls and serving platters and special salt and pepper shakers.
My maternal grandmother found a certain status in British china. Every self-respecting woman (yes- that type of sexism) must have eight place settings to be ready for life. Every time she gifted me another round of dinner plate, salad plate, dessert plate, cup and saucer she would count off, “That’s number 5.” She must have been reminding herself of what was left of her obligation to my household wares.
Every place setting was part of the set of china. Each setting had the same number of pieces. But what made them a set was the pattern, Evesham Gold by Royal Worchester. If you have a set of things that each have similar components, then what makes them interesting is their pattern.
Criticism of free markets, or capitalism more generally, is the system’s negligence toward altruism and social support services. In this video Hayek broaches the subject by delineating three levels of moral beliefs. At the most intimate level their exists rules of the game for the small person-to-person society. “We act by people that we know and are served by people that we know.”
He goes on to say that at the next level we have a society that operates under norms and moral traditions. The extended order of human cooperation is due to upholding personal property rights and the organization of the family. At the third level, moral beliefs are aspirational. People who dwell here are working at changing tradition to advance a new set of rules that will better satisfy man’s instincts.
These three sets of standards come into constant conflict. This is true in part because they are carried out in various fashions. The first is inate and spontaneous. The second lives on through traditions. And the third set of moral standards are intellectually determined.
Yesterday in the NYT Ross Douthat makes the case for ineffective altruism. Prompted by the recent demise of, what a new follow on Twitter amusingly called the bushied hair young man, Douthat compares the utilitarian goals of the EA folks to other philanthropists in his region of the US.
Now that it seems the bushied hair young man had less than honest intentions in aligning himself with the EA movement and used their goodwill as a cover for his very selfish motives in the creation of his crypto space, it’s easy to see where some would question who the objectives of these do-givers.
Part of Bankman-Fried’s fame lay in his proselytizing for a particular theory of philanthropic moralism — effective altruism, or E.A., an ideology with special appeal in Silicon Valley that’s reshaped the landscape of getting and giving in the past several years.
People who came into a bunch of money through technology are given a seemingly analytical means of redistributing some of their good fortunes to those in need of malaria nets and clean water. And these are worthwhile philanthropic activities. But cynicism can creep in.
The global perspective implied by E.A. analysis can create a Mrs. Jellyby temptation, where “telescopic philanthropy” aimed at distant populations is easier than taking on obligations to your actual neighbors and communities. (Picture effective altruists sitting around in a San Francisco skyscraper calculating how to relieve suffering halfway around the world while the city decays beneath them.)
Douthat talks a lot about the value of the various types of donations he uses in his article. The Harkness family were heirs to a great fortune which they distributed to three main causes in the early twentieth century. They supported the fine arts, health care, and educational institutions. Certainly, all these fields provide public goods where positive outcomes can be measured over generations.
No doubt an especially zealous analyst could trace the benefits of Harkness’s medical donations in positive “utiles” for people treated for disease over the past century. But the most visible monuments to his philanthropy are beautiful buildings, libraries, dormitories and the like, in cities and college towns across the Northeast — some connected to art for art’s sake, others connected to his interest in the proper formation of educated elites.
But then one family member is thought to be eccentric to have directed most of her good fortune to the ballet. How inefficient of her! Or was it? If this woman had devoted her life to ballet, had seen how devotion to a fine art builds confidence in young dancers, and witnessed the benefits of a community of performers, it makes perfect sense that she would direct resources to this tight-knit group. Perhaps she did not have talent or time, why wouldn’t she make use of the fact that she had money?
And perhaps it does make sense that the youthful somewhat transient super-rich from Silicon Valley would prefer to support causes in exotic destinations than the homeless they drive past on the way to work. If they acknowledge the raggedy guy on the corner, then they may feel they have to donate their time and do something for him or her. Perhaps they should join the city council. But they don’t have time for that. They don’t even have time to have their own family. So sending greenbacks across the globe is a better fit for their resources.
Who’s to say why the Harkens selected their passions. But there is probably a story there that created a need they wished to fill. If you divvy out each of these philanthropic pursuits to occur in a platter of social activity the demand and calculation of value do make sense. The resource transfer is useful to a greater public. Except for bushied hair guy. He was internalizing it all for himself.
Over twenty years ago, Malcolm Gladwell became famous for elucidating tipping point scenarios. He showed us how trends become the rage, how neighborhoods fall to the criminals, and how suicides fester amongst the youth. He identifies some of the players who accelerate changes in social behavior: connectors, mavens, and salesmen. But he doesn’t come up with social indicators which would serve as signals for an up-and-coming tip.
Could there be the equivalent of a canary in a coal mine to prompt some warning? Last Wednesday the market thought FTX, the crypto giant, to be solvent. Ho hum, another day in the money. By Friday, bankruptcy proceedings eliminated large financial obligations. There’s a tip for you.
Is part of the problem that we wish not to see the signs? A neighborhood can be ignored as uninteresting, perhaps a little lower class, but fine for some. Some years go by and snarly graffiti, an assortment of tattered garbage spewing about and a gaggle of baggy clothed people around a bus stop trading something, make you turn your car around and drive right out of the area. You can’t nail down the date, but the neighborhood tipped right out of mainstream acceptable.
With so much on the line, whether billions managed by kids less than a decade into adulthood, or acres of real estate deemed unacceptable as affordable housing, you would think a set theory could ferret out some helpful indicators to warn of an impending tip.
I was right down to the minute as I sailed into city chambers for our park’s commission meeting. Thinking it was going to be a sleepy November meeting, I was surprised to glide past a crowd seated on the standard upholstered blue chairs in the audience. Our city tends to over-deliver on parks and trails, so there is little controversy to draw a crowd to the assembly.
Present in the audience were activists in action. The representative for the group told us there’s a need for a cricket pitch in our city. And the arguments which followed were all worthy. A growing group of Asian residents was interested in a sport from their home country. It was their passion. Neighboring cities had put the necessary fields, so as a matter of pride it would be nice to play on some home turf. There were fields for baseball, soccer, and football, there’s no good reason to exclude cricket.
Cricket in Minnesota? It had never occured to me before. Our state does indeed have a Minnesota Cricket Association with, according to our presenter, several hunderd members. And as reported here, private individuals have gone to great length and expense to build up the infrastructure for the sport.
It is so easy to forget how many different activities and interests are present in a community, among people who live nearby. Here is an organized and engaged group who have claims to the public field– as do the Little Leaguers and Youth Football Associations. Wouldn’t it be nice though to have a little more information on all these different sets of people? What kind of numbers are we talking about for the people who devote their time, energy, and resources toward soccer, pickleball, or cricket? How many labor hours churn through to support the activities?
It just seems like, for analysis purposes, it would be handy to have a handle on the set of people who desire the use of a good for a certain function.
But while associated, behavior is, as we have already noted, a universal Law, the fact of association does not of itself make a society. This demands, as we have also seen, perception of the consequences of a joint activity and of the distinctive share of each element in producing it. Such perception creates a common interest; that is concern on the part of each in the joint action and in the contribution of each of its members to it. Then there exists something truly social and not merely associative.
But it is absurd to suppose that a society does away with the traits of its own constituents so that it can be set over against them. It can only be set over against the traits which they and their like present in some other combination. A molecule of oxygen in water may act in certain respects differently than it would in some other chemical union. But as a constituent of water it acts as water does as long as water is water. The only intelligible distinction which can be drawn is between the behaviors of oxygen in its different relations, and between those of water in its relations to various conditions, not between that of water and the oxygen which is conjoined with hydrogen in water.
The Public and its Problems, John Dewey (pg 188)
We are each part of at least a few, and sometimes many, associational relationships. Each one is distinct from the others. There may be competition for labor and resources between the associational obligations, even though, within the group, each agent’s actions are associational in nature.
Twitter is all a fluster about the new management’s impending rule that one will have to pay to have a blue check next to their name. The blue checks have been a status symbol. To have a check means you’ve arrived at being someone recognizable. To get a check you need to get checked out, and verified that you’re not some Russian bot.
Stephen King says he is having nothing of it. The highlighted tweet has now accumulated half a million likes. The blue check fee is now floating out at $8/mo. Mr. King has not left Twitter yet. So you can see, the situation is still in flux.
But who should pay to verify? Who should be the watchdog of group action? There are government agencies such as the attorney general and the state auditor. I bring those two up in particular as it appears they will both be voted out of office next week. Is someone who received a salary for a surveillance job as good as someone who takes a private hit due to group member’s action?
Many groups self-regulate through an associational process. First off the keenest view of the situation is seen by those who stand shoulder to shoulder in the same environment. Their judgment of the legitimacy of a complaint is going to be more reliable. Their ability to get the right information to the right people is more probable.
But the most significant incentive is the maintenance of the reputation of the profession to the outside world. A degradation of stature would be internalized by each member. Thus the expense of voluntary surveillance of one’s group is borne out of the risk of loss should a ne’re-do-well drag the team into the mud.
I believe this supports Musk’s instincts to charge those who play to pay.
There’s a debate in our household about hanging onto stuff. My husband feels that the stacks of clothing on the shelf in the walk-in closet may be useful one day. A pair of jeans is useful, for someone. But I argue that the dozen or so new pairs of pants purchased in the past decade leave the old ones out of date and ill-fitting. And thus the function of the neglected garment has changed. An old pair of Dockers no longer serves as the vehicle to looking business casual appropriate. It now serves as clutter, or dare I say garbage.
The use of an object is different than its function. If I can separate him from a few of his items, they then become a donation to Goodwill. They may serve as a tax deduction. And when Goodwill processes them and sells them they become income for the non-profit. The flow of ownership changes in this scenario is driven by the positive values at each trade. But functions can have negative values too. Clothing may be too torn, dirty, or tattered. Then the Goodwill would bare the expense of disposing of them (although this may not be the best example as I’ve heard there is a market for rags).
So to review, an object or good can have a use or several uses. A bench can be sat on, lied on, and stood on. Perhaps a skateboarder could even use it as a prop. In that case, the function of the bench is a skateboarder’s sliding support. Notice what happened. By focusing on the function, we’ve denoted a group of people who would use the object in this fashion. Now having skateboarders transform public spaces into skateparks is not always welcome. So we have another group of people who feel a loss by the transformation of a public space.
Voila! Tagging a function to an object delineates groups of people who trade for its use, depending on how its value affects them. We are shown the marketplace.
I was recently reminded of this quote from Friedrich Hayek. He describes how our actions are ruled by two different spheres of order. The manner of our obligations to our children does not extend past the front doors of our house. An acceptable reprimand in a workplace between boss and employee may be considered uncaring in a network of friends.
Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilisation), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of world at once. [italics original]
The Fatal Conceit (page 18)
The value we create through our network of friends or commitments to associational fellowship operates in a different sphere from the unfettered obligations of commerce.
When I went to my copy of the book I started reading from the top of the page. Before Hayek gets to acknowledging that the two spheres of activity must work together or they will crush each other, he depicts a bunch of different players other than individuals.
Moreover, the structures of the extended order are made up not only of individuals but also of many, often overlapping, sub-orders within which old instinctual responses, such as solidarity and altruism, continue to retain some importance by assisting voluntary collaboration, even though they are incapable, by themselves, of creating a basis for the more extended order.
The Fatal Conceit (page 18)
The simplistic model portrays the selfish man using the capitalist system to maximize his interest in a zero-sum game. The state watches the public good and provides products and services to that end. But Hayek suggests that economic players can be groupings established through solidarity and altruism. These are abundant and overlapping.
Think of a formal grouping that provides public services to its members, such as a teacher’s union. When the union negotiates it is acting in a competitive ego-centric way against the public. It is a private player. Yet ever member of the union shares equally in the spoils of the union’s efforts and hence obtains a public good. It is the manner of the activity defined by the boundaries of the group which makes a wage increase public or private.
This morphing of the nature of a good through action within defined boundaries presents challenges to an accurate accounting of the whole system.
The last twenty years have been good to tech nerds. When the floppy-looking Bill Gates came out with the personal computer many people might have thought it was a one-off success. Meanwhile, the smart money left engineering, got an MBA and a job in finance. It was the 90s and it seemed like the right thing to do.
Fast forward fifteen years and money was multiplying faster than starter yeast for Amish friendship bread in Silicon Valley. Apps, games, and whatever else they do with code were the gold that the smart techs were mining. And mining with a moral superiority that what they were bringing into existence was changing every facet of the economy. Those were glory days for math majors and engineers.
Mathematical techniques also became central in economic papers. Fancy statistics and linear regression models are used to demonstrate relationships between parties and their use of resources. Fast forward to the last five years and there’s this amazing mix of massive amounts of data, computers that can handle it in a timely manner, and mathematical tools to replicate theories.
But you don’t have people educated in the classics to help parse all the people represented in the data. Even recently I saw an analysis of real estate by zip code – zip code! I encourage you to drive the parameter of an area in your city identified by zip code. Do you see consistency in the properties which would suggest similar set? In my experience urban neighborhoods are not delineated by zip code or census track.
Going forward, the methods used to sort groups to obtain useful insights could be aided more by liberal arts majors than math majors.
There was a time when concerns about the future of communities arose when changing preferences shifted people’s activities. When the lanes were no longer booked on Thursday evenings for leagues and bowling balls were being sold at garage sales, predictions of cultural decline became fodder for those who watch such things.
But about the same time, church basements were seeing a lot less of the ladies who know how to fill the fifty-cup aluminum coffee maker. As new generations come through communities, their preferences change. The inclinations to be supportive of a community or devote time to causes or charitable endeavors do go up in smoke in some sort of generational existential crisis. They simply find new marletplaces.
The volunteer firefighter model is on its way out. Half a century ago perhaps as much as a third of the firefighters were volunteers. Becoming part of the force was a competitive process. It was a position that held prestige. The men would hang out at the station house in shifts waiting for the next deadly blaze. Now most firehouses are staffed by paid employees or transitioning to such an arrangement.
One could speculate that why men don’t want to pile in and hang out in the cramped quarters of an aging firehouse. But I think it is a mistake to assume the men of today lack an impulse for civic duty. They are most probably exerting efforts elsewhere in their family or work structures. Many workplaces now offer opportunities to partner with non-profits. Many non-profits offer opportunities to become involved.
Environmental Initiative is an intermediary which is driven by a desire to improve the environment.
Currently, it is estimated that 25% of passenger vehicles cause 90% of vehicle air pollution. Older cars often have outdated or broken emission controls and exhaust equipment. By partnering with garages to repair broken emissions systems, Environmental Initiative is cleaning up some of the highest polluting cars on the road while reducing barriers to reliable transportation.
Partner garages provide low- or no-cost repairs to emission control systems. This allows car owners to reduce their car’s emissions and prioritize paying for other repairs necessary for the safety and drivability of their car.
This type of interface between people who have skilled labor, and most probably some idle time, and those who voluntarily support a cause, like pollution control, is an excellent matching game. There is an arbitrage opportunity between the former group which loses little by helping and the latter group which will be vigilant to the appropriate disbursement of reimbursements.
Another type of duty shifting happens when regulations, or rules, are made official across a group. We all want to be able to go to the Minnesota State Fair and eat from as many of the food booths as our gastronomical ambitions allow. It would be unfortunate to find out after the fact that the mini donut vendor did not change out their frying oil promptly. Even the most non-regulatory types would agree that purchasing food without the risk of food poisoning is a good thing.
If food prep regulations were weighed out, it is clear that having the rules in place allows for more people to be freer to sample the Fresh French Fries and Sweet Martha’s Cookies and Turkey on a Stick. Having the rules in place gives people confidence in interacting not only with people they know personally, or they’ve heard of from friends, but with any food truck or pop-up vendor operating with a license. The rules push the duties of edible foods on the small vittles providers because this allows for greater freedom, not less, overall.
This feature works really well when populations are nested one inside the other. Although there may be small differences between counties, the rules reflect what is expected at the state level. And it is fairly reliable to maintain the same consumer expectations as one crosses state lines as everyone is nested in a federal suite of rules. And although there is sometimes pushback, like when the health department wants to show up at a church basement waffle breakfast for their parishioners, the system, in general, reflects efficient coordination.
Who gets to assign the duties becomes a bit more opaque when bundles of economic activity operate separately from one another. For instance, do European consumers of garments manufactured in Bangladesh owe the workers an EU evaluation of their working conditions?
Within one’s own trading system one relies on the press and complainants to expose wrongful work practices. Then consumers can make choices with consideration of brand reputation. When markets operate at a distance, it is unclear which market has a duty to established norms.
This passage is taken from Portraits from Memory by Bertrand Russell, published in 1953. He is reflecting on a change in societal structure since John Stuart Mills wrote his famous treaty On Liberty which was published almost one hundred years earlier in 1859.
What has changed the situation since Mill’s day is, as I remarked before, the great increase of organization. Every organization is a combination of individuals for a purpose; and, if this purpose is to be achieved, it requires a certain subordination of the individuals to the whole. If the purpose is one in which all the individuals feel a keen interest, and if the executive of the organization commands confidence, the sacrifice of liberty may be very small. But if the purpose for which the organization exists inspires only its executive, to which the other members submit for extraneous reasons, the loss of liberty involved may grow until it becomes almost total. The larger the organization, the greater becomes the gap in power between those at the top and those at the bottom, and the more likelihood there is of oppression. The modern world, for technical reasons, is very much more organized than the world of a hundred years ago: there are very many fewer acts which a man does simply from his own impulse, and very many more which he is compelled or induced to perform by some authority.
How about today? Are we more individualistic and atomized? Or associational and organized?
About 500 nurses at the Mayo Clinic’s hospital in Mankato, Minnesota, will no longer be represented by the Minnesota Nurses Association after voting 213-181 to decertify their labor union, according to a release.
Healthcaredive.com
Monopolies are helpful when there is an imbalance of power or when large infrastructure needs to be pushed through to completion. Ideally, a period of control is released after a time so that the actors can go back to making the best individual decisions to accomplish a blend of their private and public goals. After a 70-year stint, nurses at the Mayo Clinic will return to negotiating for themselves.
The decertification process was supervised by an outside agency.
The effort to dissolve the union was driven by the National Right to Work Legal Defense Foundation, a “highly powered, well-funded outside national organization bent on undermining worker power and collective bargaining rights,” the MNA said in the release.
That Right to Work group says its goal is to provide “free legal aid to employees whose human or civil rights have been violated by compulsory unionism abuses,” according to its website.
Most people agree that some rules are necessary. People cannot coexist with a reliance on internal moral compasses and common sense. Conflict is bound to arise and rules shape how to proceed once this happens. Even in the case of simple standards, rules can facilitate living in close quarters. It may seem like trivial overreach to implement a maximum grass height. But in fact, it’s the benchmark that tells the neighbors when they can say enough! Hire someone to mow that hay field.
A certain number of ordinances enables standard responses, which ease the ability of society to get along. But as the rule setting continues, a weird thing happens. People who like power (and often who understand power) mandate regulations to feel powerful. They talk a good game about the issues at hand, but you’ll notice the conversation always revolves back to some coalition beating out another coalition. There’s an ever-present fascination with some sneaky move that one group played on another.
People who like power are needed on occasion. But often these people have left the issue and the objectives at hand. The resolution is just a bobble to fight for. They are not useful in the daily duties of getting the job done. And this appears to be taking a toll on the workforce.
The New York Times looked into Why City Workers in New York Are Quitting in Droves. Read it. It’s all about power plays. The jobs have not changed, nor the compensation, nor the fact that the private sector has always been more lucrative. So what’s left? The social position of jobs has diminished and it is no surprise that the “(R)esignations and retirements from the Police Department are the highest they have been in nearly two decades.”
Other jobs that have become undesirable are the enforcers of the rules. “A critical New York City inspection team, which responds to violations and complaints about lead paint, mold, heat and hot water, has been hampered by a severe staffing shortage, with 140 positions waiting to be filled.” Call it pandemic enforcement fatigue. There is no status in it anymore.
And as tired as everyone is with discharging mandates, workers want a little freedom too.
Many also cited Mayor Eric Adams’s campaign to compel city workers to return to the office full time, a stance that was reinforced in late May. “While hybrid schedules have become more common in the private sector, the mayor firmly believes that the city needs its workers to report to work every day in person,”
All I’m saying is that rule makers have fallen out of fashion, let’s hurry up and take advantage of the loss of status. Repeal the dumb rules and regulations. There are plenty out there.
When people gather and cooperate in the provision of a public good that is available only to their group, it is called a club good. Compared to private goods it is more difficult to track the output of these types of goods. The former can be counted up and traded, which translates into a neat and tidy quantity-vs-price graph. Public goods, like education for example, are made available to everyone. Hence the measure of success depends on the entire team.
Although a group is made up of individuals, for the purposes of tracking achievement, the outcome is a reflection upon everyone. As my son’s baseball coach would say, there is no ‘i’ in team. Or as dictionary.com explains, some nouns are mass nouns like sunshine or water. Even though we have such a strong tendenancy to try to extract the individual as the unit of analysis, we really must account for the group when dealing in club goods.
This leads us to wonder how big the marketplace should be in the collective efforts to, in this case, educate our children. This came to mind today as I was listening to Russ Roberts interview Nassim Nicholas Taleb on a new episode posted at Econ Lib. It sounded like the author of The Black Swan likes to process his ideas for new books by talking them through with Russ on the podcast. The topic today was the optimum size of the State. Here he makes the case for smaller groups.
But, let me make a comment here, why size is central to what we’re discussing. Because people keep using names–state, nation–the size is central.
You do a lot better, I think, meeting a person a thousand times than meeting a thousand persons once. In other words, you’re in a big city like New York City, you walk out, you’re going to see everyday different people. Whereas in a village you’re going to probably encounter the same number of people, assuming you encounter them, it would be the same people. It’s like knowing it’s a friend is a person that you see a thousand times. You see one person a thousand times rather than a thousand strangers once. You see? Things don’t scale properly. There are things that work differently at a lower scale. And, what I’ve discovered while working on volatility models show that why an elephant, for example, is not a large mouse. An elephant is vastly more fragile–
Taleb
The specific details about who runs into whom are less important than the gist of what he is saying with respect to gauging size. It might be a thousand people or all of Manhattan. What I think is being framed here is a way to identify the size of a community suited to accomplish their goals. And the suggestion is that it must be small enough to allow people with common interests to bump into each other and trade the resources necessary to edge toward an outcome.
As long as all the people interested in educating the kids can come across each other, then they can combine their enthusiasm and skills to foster learning. As long as enough of the folks who depend on transportation networks can give feedback and encourage the appropriate repairs and expansions, then roads and bridges infrastucture will stay up to date. As long as all the people best able to monitor the streets for safety are able to provide feedback to law enforcement, then the compact to protect all citizens will raise to expectations. And on through the list it goes.
As long as the size of the community allows for people to easily do the work of community, then the institutions in place to provide public goods will be backstopped with the resources needed to flourish. At this point, as I understand it, you have found the right size for the school district or the precinct, or the State.
This image of the G7 leaders in tieless attire is making the rounds on Twitter. There’s an observance that times are changing and the buttoned up look against the backdrop of some symbol of the halls of power is slipping away. Now the leaders are casual in their suits, almost sloppy if you look too closely at Boris Johnson. Perhaps old formalities are dropping to the wayside.
It used to be that public goods described activity in the public sector. Only economic activity administered by governments, such as the ones represented, were thought to fall inthis category. About ten or fifteen years ago people spoke up and noted that NGO’s also provided services when governments were failing. Instead of the funding coming from taxation, the money flowed from philanthropy.
The definition of a public good has expanded some more. Here is a peice from one version written by Tyler Cowen on Econlib, after the core concept has been flushed out.
Partially public goods also can be tied to purchases of private goods, thereby making the entire package more like a private good. Shopping malls, for instance, provide shoppers with a variety of services that are traditionally considered public goods: lighting, protection services, benches, and restrooms are examples. Charging directly for each of these services would be impractical. Therefore, the shopping mall finances the services through receipts from the sale of private goods in the mall. The public and private goods are “tied” together.
Here is the insight that private endeavors also envolve the provision of community goods.
If you’ve spent time on this site then you know that we feel that any good can be made public or private to a group. What is public to those inside the group is most likely private to those outside. All the households appliances are free to use by anyone from within the home but are considered private to those looking at the house from the street. The lines which encircle groups are many, some formal, some informal. But in order to calculate wealth held within communities, or their capacity to provide goods, for instances, it must be understood that all goods can be club goods.
Five of Vincent van Gogh’s olive tree paintings are on loan to the Minneapolis Institute of Art. They make up a small exhibit along with several etchings. The viewing space is intimate with lighting picking up the texture of the paint strokes on canvas. Only a handful of people are present at any one time which encourages an inclination to linger rather than to leave.
Everyone knows van Gogh as the genius with mental illness. The man whose brush techniques and color combinations made his work vibrate with energy. I did not realize he started his artistic endeavors late in life nor that he was so prolific.
Largely on the basis of the works of the last three years of his life, van Gogh is generally considered one of the greatest Dutch painters of all time. His work exerted a powerful influence on the development of much modern painting, in particular on the works of the Fauve painters, Chaim Soutine, and the German Expressionists. Yet of the more than 800 oil paintings and 700 drawings that constitute his life’s work, he sold only one in his lifetime. Always desperately poor, he was sustained by his faith in the urgency of what he had to communicate and by the generosity of Theo, who believed in him implicitly.
Britannica
Insight into his state of mind can be gleaned from the many letters he wrote to his brother Theo. His brother gave him the freedom to pursue his calling. It’s hard to say how a brother can be so devoted to his sibling. Vincent tried to support himself as an art dealer, a language teacher, a bookseller, and a lay preacher. As he stumbled along, fighting with mental illness, his brother chose to support him unequivocally.
Perhaps Theo did this entirely out of family obligation. We all have duties to our blood ties. It sounds more likely that he had some sense about his brother’s brilliance. Fortunately, he lived in a time when he had the freedom and capacity to provide support. In a short run accounting, van Gogh would have been a liability- taking the long view, as perhaps Theo did, Vincent was a rainmaker.
Freedom trumps utility as the latter isn’t always readily apparent. Each couple or group or society must decide where to place their backing. Those on the outside are inadequate at doing the math or evaluating either short-term or long-term returns.
Kenneth Ahrens recently wrote a paper, Robbing Peter to Pay Paul, The Redistribution of Wealth Caused by Rent Control. He was kind enough to join the Minneapolis Area Association of Realtors in a zoom call to present the material. It’s of particular interest in our market as he uses the effects of a recent ballot measure in the city of St. Paul. The paper is written in clear plain language and starts with a nice historical review of rent control in the US. It’s well worth the read. Here is the abstract.
We use the price effects caused by the passage of rent control in St. Paul, Minnesota in 2021, to study the transfer of wealth across income groups. First, we find that rent control caused property values to fall by 6-7%, for an aggregate loss of $1.6 billion. Both owner-occupied and rental properties lost value, but the losses were larger for rental properties, and in neighborhoods with a higher concentration of rentals. Second, leveraging administrative parcel-level data, we find that the tenants who gained the most from rent control had higher incomes and were more likely to be white, while the owners who lost the most had lower incomes and were more likely to be minorities. For properties with high-income owners and low-income tenants, the transfer of wealth was close to zero. Thus, to the extent that rent control is intended to transfer wealth from high-income to low-income households, the realized impact of the law was the opposite of its intention.
Ahrens mentioned that his peers were wondering why he was working on demonstrating the problems with a policy that has been shown to have greater negative impacts than positive ones. Experiments with rent control in the 50s and the 70s are long forgotten. A new generation of problem solvers and activists are reviving old ideas despite their flaws. The focus seems to be on preserving a renter’s ability to stay in their apartment by capping rent increases. This in turn transfers wealth from the landlord to the tenant.
Although the intent might be to have a one-for-one transfer from the pocket of the property owner to the renter, Ahrens points out that it is not that straightforward. “Basic economic theory predicts that rent control causes both transfers of wealth and deadweight losses (DWL) for property owners. These losses can be divided into a direct capitalization loss and an indirect negative externality loss.” A deadweight loss might derive from postponement of maintenance and repairs due to lack of income. “The sum of these effects is observable as a decline in the market value of real estate, as the property can no longer generate a market rate flow of income and fewer repairs to the property mean a lesser quality building.”
Furthermore, the transfers benefit the wealthy and hurt the less wealthy. In their findings, the lower income owners realize the greatest decline in home values- 8.52%- than any other transfer.
There have already been meetings in St. Paul to adjust the stringent rent control measures passed last November. But there is no talk of reversal. Constituents seem to feel that renters in some way are not getting a fair shake.
Maybe I can take a run at the reasoning. Renters play a role in the community as do property owners. They are not as vested as they are more mobile, yet they too can be good citizens. Perhaps they go to city hall to petition for a road safety concern, a new playground, or more observance of a problem property. Perhaps they are the bus stop mom or the football coach. Perhaps they help maintain a safe light rail system or advocate for better bike lanes. For all that personal time spent on city infrastructure, they enjoy an improved environment. Yet the homeowners enjoy greater home values. And renters face the possibility of being priced out.
Of course, homeowners do not always enjoy greater home values. I remember a period of three years following the great recession where most sellers brought a check to closing to buy out their remaining mortgage balance. Sellers also feel a pinch in their bottom line when cosmetic updates have not been done, or repairs deferred. Renters find it far less costly simply to move to a newer updated unit. Such are the differences between ownership and rentals.
Maybe there is a new framework to consider. One that takes into consideration the economic issues of civic participation yet still tallies the risks of ownership. What’s clear to me is that if economists do not come up with analytical tools that better express the motivations and incentives constituents are expressing in their political decisions, then we will continue to suffer through cascading unintended consequences of bad policy.
In her latest book, Cogs and Monsters, Diane Coyle takes a long hard look at the discipline of economics. She offers substantial proof that many things we care about are left out of the accounting in a traditional analysis. It’s a topic she is familiar with as she wrote another book about GDP which relays a history of the measure and suggests there are some missing pieces to the analysis.
Her peers are not to be persuaded. Frustration ensues when novel ways to approach issues are shuffled under a pile of papers and surreptitiously ignored. Here is the story of the shopkeepers versus energy waste through open doors.
As you walk down a high street in the winter, you will find many stores with their doors wide open blasting out heat in the entrance. This is not a desirable state of affairs either in environmental terms or in terms of the stores’ energy bills. So why do they continue to do it? Their fear of discouraging ambling shoppers from entering their store, when every competitor’s door is open, outweighs their desire to cut the electricity bill, or reduce emissions. No shop can shut the door unless the others do so. It is a classic co-ordination
problem, and the campaign aims to co-ordinate actions, but cannot succeed until a critical mass of door closers has been reached on every high street. A regulation banning open doors would achieve the same, and more effectively because individual shops could not backslide.
In today’s parlance, there is a tension between the ability of small business owners to make a profit and an edict from the state to preserve energy. It’s Mainstreet versus the government (or the activists, or the greens). The positioning is that people in business just care about making money and don’t do enough to contribute to social problems. The counter arguement is that businesses are suppose to look after the bottom line- that is the how the system works. Due to this dichotomy, a proposal to regulate shop doors is considered authoritarian. We the lofty intellectuals have made a calculation that- you- the lowly shop keepers must sacrifice for the greater good and close your doors!
If you read Coyle’s book closely, however, she has more to say. From what I understand, the mandate to shut the shop doors is meant to ignite the coordination of a beneficial activity. Clearly, shopkeepers care about more than their businesses, just as everyone does. They may choose to make concessions for all sorts of socially beneficial reasons. Perhaps their brother-in-law is a supplier, but not the cheapest supplier. Perhaps they close on Sunday for religious reasons. At every turn, business choices are made in unison with other interests. And there is a very good chance many care about the wasted heat slipping out their front doors.
The policy to regulate the shutting of doors isn’t a heavy-handed state mandate. What it does is give the group a chance to start a new norm, one which they would be open to if they had assurances that everyone would follow through, Once underway, the theory is that shutting of the door becomes a voluntary social norm with compliance and enforcement.
To see it in that light, it is necessary to put it on display in the public goods market. The fear is that one shopkeeper closing their door bears an external expense for her commitment to a social interest. Unless there is a good chance that the majority of the group are so environmentally inclined, the efforts will inevitably be circumvented and the efforts will fail.
So here is the important part. Coyle is making a judgment in a marketplace of energy-conservation interests that not 1-out-of-10, not 5-out-of-10, but 9-out-of-10 of the Mainstreet businesses will find this a favorable action with assurances. The question should be, how is she evaluating that market? Where does she see the numbers that say this group will go along with this policy, or that group will not?
Consumers of resources are regularly making calls about how much they are willing to sacrifice for their children, their environment, their commutes, and their churches… These are all done in shades of grey and not in thumbs up or thumbs down moral decisions. To implement successful coordination policies we need to be able to read the market so that the initial assurance of participation is followed by the development of a new voluntary institution.
Here at Home-Economic, we want to be rid of the traditional economic analysis where a good or service is only allowed to be public or private. We want you to entertain the idea that goods and services are continuously changing their loyalties. Lighthouses are not only for the common good, and pop cans for instances don’t have to serve just the individual. Let me give you a few examples.
Even though there was political unrest in Ethiopia in the 70s we still were able to travel around the country. Once on a hot afternoon of hiking, I was surprised to hear my dad tell my brother it was OK to toss his empty pop can out the window. Back in the US the Give and Hoot and Don’t Pollute campaign was in full swing. Cranking down the window and throwing sandwich wrappers and whatnot out onto the freeway was not permitted. Littering on the dry open savannah seemed equally gauche.
But my dad explained that what was garbage to us was a useful tool for someone on the arid plains of the Awash Valley. Sure enough, as our car sped down the road and the can bound off the asphalt and into the red-tinted ditch, a young boy appeared. He chased down the empty can and took it with him. The can which was a consumer receptacle for my brother was transformed into a club good used to bring water to a family. An action that was a negative externality in the US created a spillover effect in Ethiopia.
Here are some other examples of easy-to-see transformations of goods and services from very private applications to public ones.
In traditional economic analysis goods and services are stagnant. The problems assume an isolated environment where the players interact just within the realm of the examples. The relationship and nature of the products identify only in the context described. There is a depth and richness to be found if- Voilà- you see how things are transformed.
I think it was Karl Polanyi who coined the term embedded. In The Great Transformation, the philosopher mulls over the notion that not all worthwhile interactions are adequately represented in a transparent market setting. he drew people’s attention to the influences of family relations, obligations to a tribe, and so on. He did not deny that the allocation of resources through a market process was beneficial. He claimed that all activity is embedded in the social circumstance of the actors and in that way influenced the outcome no matter how remotely
The definition of embedded is:
It’s like society and its institutions form a big glob of clay and the market trading apparatus is a shiny gold nugget glittering against the thick, slow, clay substance. The muddy substance can shift and nudge the glittery mass but embeddedness promotes the idea that each substance is separate. You’re either a part of the bling or the mud. Each exists in a realm that cannot be interconnect. Society can influence, rock, tug and tip but not breach the market.
Fast forward four score or so and people are talking differently about interactions between private market transactions and duties to the public. There are many personal stories in the newly released book Speed & Scale by John Doerr. They provide specific examples. Tensie Whelan is a journalist who was covering sustainable development issues when she made a discovery.
One big flashpoint at the time was McDonald’s practice of sourcing beef from Costa Rica. It kept U.S. hamburger prices down, but the added grazing also led to deforestation. Environmental boycotts led McDonald’s and others to stop sourcing beef from there, but that did not stop the deforestation. People turned to slash-and-burn agriculture to put food on the table. That got me interested in how we could help people pursue sustainable
Tensie Whelan- Speed & Scale
livelihoods. The Rainforest Alliance was founded by Daniel Katz. He was moved
to act after reading that fifty acres of rainforests are destroyed every minute, and two dozen species become extinct each day.
The environmentalist had successfully dissuaded McDonald’s from importing beef from Costa Rica, which, it is implied led to higher prices of US Beef. The expense of the attempt at stopping deforestation was realized in the market. Yet deforestation still occurred because the owners of the forest still needed to eat and thus put the land to that use. As a group, their action, rightly or not, created a negative externality to the world as they internalized the benefit of a harvest. Tensie Whelan’s firsthand accounting of the tradeoffs helped her understand the situation as she pursued other strategies of collaboration with the local people.
The 1990s saw considerable progress on deforestation, but it wasn’t fast enough for Tensie. It was a long, hard slog to go through the developing world farm by farm to collaborate with local growers and Indigenous peoples. Tense promised money for people to protect the rainforests instead of destroying them. She won farmers’ trust, and sign-ups rose each year. By mandating safe working conditions and fair pay, the program also caught on among farmworkers.
This time instead of forcing a corporate player to pull out of a market, the strategy was to buy out the benefit of farming the deforested areas. In effect, the rain forest is being maintained as a world club good through a buyout. The locals are made whole by internalizing the cash.
The next story comes from Laurene Powell Jobs. In this case the movement between the nugget of gold and the clay is between Silicon Valley’s semiconductor market and the health and environment of a neighboring town. The glitter of tech commerce doesn’t sit nicely atop an institutional environment, it penetrates the lives of East Palo citizens and throws cost on them in the form of their health expenses.
Thirty years ago, when I was getting my MBA at Stanford Business School, I found out that just a few miles away the city of East Palo Alto was a disposal center for Silicon Valley. A lot of semiconductor debris was dumped there, along with biomedical waste. The
Laurene Powell Jobs- Speed & Scale
city was paid for this disposal, but it was not done properly. This happens across low-income areas all over the world. There were all sorts of toxicity in the water table, with high levels of arsenic and radon. It gets transmitted into the food that’s grown there, it’s in the gardens, it’s in the drinking water. Since we fund local education through property taxes, the schools in East Palo Alto were far inferior to the ones in West Palo Alto. They don’t have a robust tax base. They couldn’t afford good roads and sewage systems. They didn’t have a grocery store. They didn’t have a bank. They didn’t have the kind of infrastructure that would yield a healthy community. In 2004, I started the Emerson Collective on the belief that all the issues we work on, all the systems that touch our lives on the planet, are interlocking.
Embedding implies a lot of nudging and cradling and massaging. But the spheres of economic activity between the private sector and public groups (or clubs) is very porous. As Whelan points out, the impulse for action is not taken away when the large corporate entity withdraws. The action is running on its own group incentives. When pollution is externalized onto a neighborhood the medical expenses can be accounted for. When companies improve standards to reduce or eliminate the pollution, they internalize the cost to cease the externality. The price of their product now includes the reduction of pollution to the nearby community.
These are dynamic interactions between two spheres of economic activity. They can be identified, accounted for and evaluated. There’s nothing embedded here.
When an academic paper uses CBSA (core based statistical area) as its unit of analysis.
Proponents of a 15$/hour minimum wage claim this wage will provide a worker with a livable wage. This is a little hard to swallow this as an across-the-board benchmark as standards of living change across the country. Even within Minnesota, the wage may be considered a decent amount in the outstate areas to just above starting wage in the cities. Price setting or creating artificial bounds in economic systems inevitably creates more problems than they solve.
Setting a floor based on a threshold of a plucked-from-the-air minimum standard of living assumes that each worker is supporting themselves on this one job. High school kids would receive the wage and they are supported by parents. The stay-at-home spouse of a family unit might pick up a job for a while for extra cash, not for the core flow of funds to pay the bills. These workers may not want to work to the level of getting paid a higher wage, or as teenagers, not be qualified for a higher wage. So, let’s set these two groups aside.
For the workers who need to support themselves on one job, a minimum wage could provide them with a bit more money. But there would be a loss too. Pricing is a source of information. If a full-time worker cannot command a sufficient wage in the market to meet their basic expenditures, people should be asking why– not topping off their salary and sending them out in the world. What would they need to obtain the job at a better wage, and what would it take to get it: education? a connection? flexible hours?
Say there was a pattern of a whole set of workers who were unable to secure sufficient work. And it became clear that the reason was geography, transportation, or language skills. Would it make more sense to supplement their wage with a stipend until the restricting constraint was lifted? Would it make more sense to overcome the reason for below-par wage offers so that they may be confident of higher wages in the future?
Don’t mess with the pricing system. It’s valuable information. It provides all the insights necessary to help people progress towards self-sufficiency.
Hence, the theory of clubs is, in one sense, a theory of optimal exclusion, as well as one of inclusion. Consider the classic lighthouse case. Variations in property rights, broadly conceived, could prohibit boat operators without ” light licenses ” from approaching the channel guarded by the light. Physical exclusion is possible, given sufficient flexibility in property law, in almost all imaginable cases, including those in which the interdependence lies in the act of consuming itself. Take the single person who gets an inoculation, providing immunization against a communicable disease. In so far as this action exerts external benefits on his fellows, the person taking the action could be authorized to collect charges from all beneficiaries under sanction of the collectivity.
An Economic Theory of Clubs (1965)
What do you get when family commitment overlaps with fine arts culture and the MLB?
I don’t know what will simmer at this intersectionality, but I hope it means the famous producer will warm us up with some musical numbers here in the North country.
When people talk about the culture it seems like they are referring to a product. It is something you can point to and see its shape. For instance, the term popular culture conjures up images of the latest doo-wop band or a well-viewed film series or the latest forms of dance. It is the culmination of artistic products consumed by the masses.
High culture on the other hand tips a hat to a cappella choir singing St. Mathew’s Passion accompanied by a local chamber orchestra. Or to well-dressed patrons sipping white wine at an art gallery opening. The idea of culture summons up what there is to be consumed in a city dedicated to the arts. It is the experiential outcome.
Institutions also reside in the societal space. But the term emphasizes the commitment rather than the outcome. Political institutions are those dedicated to the appropriate functioning of a political system. The institution of the family refers to the rules and norms which enhance rather than detract from family relations. There are institutions which support the armed forces, or the justice system, or k-12 education.
Since institutions are defined by their objective, they are often qualified in terms of being strong or weak. This qualification refers to how well the society in question is meeting its objectives. Whereas culture is the end product– a work culture, a drug culture– institutions are the social goals people are willing to organize around and enforce at a high level. Yet both of these terms are used in the broadest sense. There is a vagueness of how it all works beyond naming the task at hand.
The one thing we can say about both cultural goods and institutional goods is that they are both public goods, in the modern sense. If a neighborhood has a drug culture, it may roam through all its streets. If a business has a paternalistic culture, all its employees will benefit from matching pension plans or flexible family leave. We are not talking about individual agents; we are talking about individuals who are just one in a group of many.
What both terms fail to include is any type of tie-in to resource limitations. And that is where platters come in. For the purposes of analysis, one must narrow down the view. One must pick a passion and a people and account for what they have to contribute to such endeavors. And once you do this it is easier to see how the competing interests in people’s lives only allow for so much dedication to cultural activity or institutional enforcement. The platter is a slice of communal activity to be placed under a microscope and analyzed.
When you think of institutions, you don’t think of the definition of the word as much as examples: marriage, the family, the justice system, or the education system. These are commonly recognized as they exist across all societies. Even criminals have their own justice system. Institutions are loosely defined as the formal and informal rules that organize social, political, and economic relations. But if one wanted to use institutions as a defining element of economic activity, it is worth teasing out a few of their components.
If there are rules, it is implied that there is a group of people who both agree to the rules and maintain them. It is also logical that the rules are put in place to maintain or protect a shared value, a common interest. So, in talking about institutions, it only makes sense to state which group is attached to the rules and what exactly is their objective. Furthermore, if the group must take action to support or defend the rules, then we will call this work.
Consider the institution of marriage. The joining of two people by a vow of devotion to one another varies considerably across society. The impact of this variance can help delineate subgroups of institutional marriage groups. For instance, the swingers who find the swapping of partners at a poolside party are probably not spending a lot of time with couples at Good Shepard Lutheran Church in many a midwestern town. Which is a way of saying that the institution-M for the party people, sub-S, has a different social contract and obligation for W work, then the M sub-C who sing hymns on Sunday morning.
I don’t think anyone would challenge the claim that these two groups live and work on their marriage in different realms. But what can we call these special places where rules are created and enforced, where groups of people meet to work in the effort of securing a value for their social commitments? The word institution has too broad a reach and leaves out the notion of an ongoing exchange.
I like the visual of a platter. All the swingers are out there tipping on a platter, mixing with new members of their loosely held marital vows. While the church people recognize marriage time and again at weddings and baptisms and anniversary potlucks in the church basement. If there is a loss of life, people deliver casseroles. If there are signs of discord, the kids get invited out so the parents can work on the issues of discontent. The contract isn’t only to one another but in support of the institution.
These eco-socio-platters are the marketplaces for institutions. Failing to define them can lead to uncomfortable misunderstandings. According to my new book club book, Are Economists Basically Immoral? (Heyne) Laurence Summers got himself into a bruhaha by mixing platters.
Lawrence Summers, the chief economist of the World Bank, got him. self in serious trouble last December when he sent a memo to some bank colleagues arguing that polluting activities ought to be shifted from developed to less developed countries. He argued that the demand for a clean environment has a very high-income elasticity: which means that people become keener on it as their incomes rise. He said that wealthier people are ordinarily willing to sacrifice more for aesthetically pleasing environments than are poor people. Moreover–and I suspect this is what really got him into trouble- he claimed that the health effects of pollution are less in a poor country than in a rich country because the forgone earnings of people whose health is adversely affected by pollution are so much lower in poor countries, because of both lower incomes and shorter life expectancies. Someone leaked that memorandum to an environmental group and a hail of criticism descended on the World Bank and Lawrence Summers. Summers protested that his statements were designed as a sardonic counterpoint, an effort to sharpen the analysis.”
Making comparisons across vastly different eco-socio-platters will more likely make you look bad than good. By taking a stark look at the economic circumstances of poor people and propping their platter up next to where the rich people live, the audience could only feel outraged. Not because the observations were wrong but because they are empathetic to the plight of the poor more than the truth. Being so bluntly presented with the fact that people of meager circumstances have different life outcomes invokes a sense that all is not right in the world. In the public or institutional realm, this is the fuel that ignites action.
It’s not helpful, however, to have false comparison made which instigate action. And that is the fundamental reason why we need to define our platter. Swingers and Lutherans don’t mix.
When I was just joining the workforce, a reputable mentor leaned in and confided that people would really enjoy my insights. That has not been my experience. Not at all.
A couple facts of human nature must be acknowledged. First off, we don’t want to be shown up. For example, some observations of the workplace, even by a lowly employee, may lead one to conclude that the man in charge is dropping the ball. Hence the man in charge does not appreciate insights. A great way to slow down a career is thus by providing them. Lesson one in workplace politics- make others shine and hope they bring you with them.
Many humans are susceptible to jealousy problems. Being insightful and recognized as such, can arouse feelings of envy. This results in two outcomes. Peers downplay the value of the perspicacity. Secondly, the keen observer will be left out of the next social gathering for the arrogance of making others feel diminished. Outrage.
We all like to hide things from ourselves. We can’t help it. And the motivation behind being unsupportive of a stronger peer is one of those things. It’s not convenient for the ego. So that’s the quandary. How to hide talent until it finds its perfect support structure to flourish and become unstoppable.
The Minneapolis Federal Reserve has started a regular zoom offering. Today’s event was part one in a rent stabilization series. Libby Starling from the Fed was the moderator. Edward Goetz, of the UMN and author of Clearing the Way, is known for favoring rent control. The two other panelists, Sophie House (NYU) and Jenny Schuetz (Brookings) offered new perspectives on the issue.
One objection stems from an efficiency issue. Creating an across-the-board rent control rule means that those who do not need a subsidy receive it anyway. Instead of targeted benefits to people in need of assistance, all renters benefit from an increased restriction. In fact, it is noted that all the rent-controlled apartments remaining in Manhattan are occupied by wealthy New Yorkers.
I like the image that a community has only so many dollars to devote to the financial support for people who can’t afford their housing. Worrying about the efficient allocation of this bundle of cash will keep the system tight and free(er) from fraud. Blanket rules mess with the market for rental housing. Targeting benefits while maintaining the natural flows in the shelter business will distribute resources based on priorities in an entire system.
Conjuring up a bag of cash marketed as subsidy housing money is one new framing. Another is to group types of consumers. The story of rental restrictions is always told as the battle between the poor and the horrible greedy landlord. These conversations seem more about taking money away from the investors (determining a *fair* appreciation) than trying to get people into the best housing situation. Mainstream buyers are not thinking about their seller’s finances when the make an offer on their home; they are thinking about the great kitchen and the short commute and the great schools for the kids.
When we’re trying to house the least advantaged, public dollars should be leveraged to put people in close proximity to the public services they need most. If they have kids, offer a subsidy to keep them in the same school district for the remainder of their children’s K-12 education. If they are a lower wage worker, see if the companies will participate in a subsidy which keeps the workers close-by. If the recipient of the subsidy is in need of regular medical care, have their stipend be tied to buildings close to significant medical facilities. Match the group of people the lowest rung of income to the neighborhoods which are best suited to notching them up and out of this social stratosphere.
There are some rotten landlords out there. And they need to be pursued for a higher level of service for any of the tenants who live in their buildings. But don’t tie up the bag of subsidy cash with buildings. This wastes social dollars and doesn’t get the intended recipients into the best match of housing supply.
As for many professions, Minnesota Realtors are required to complete fifteen hours of continuing education per annum to maintain their license. This coursework may cover a variety of issues, and some of it can be unexpectedly helpful. The required modules are often redundant or heavy on regulatory dates and descriptors. This year it revolves around discriminatory covenants written on deeds from the 1920s-to 1940s. These are reprehensible in their blatant racism toward non-Caucasians.
I think revisiting this history is important. We should be reminded that nice people, perhaps even relatives of local realtors, don’t always do nice things. That said, I think it is important to tell the story accurately. A portion, perhaps 20-25% of the lots, had exclusionary covenants. The portion of non-white residents in Minnesota at that time was less than 1% of the population.
I guess what I’m trying to point out is that just because a portion of a population can be criticized for what always should have been unlawful behavior, doesn’t mean that everyone behaved poorly. You don’t need an entire population to be in your home court to lead a happy and productive life. And to set that expectation will only lead to disappointment.
Communal arrangements are mostly nested. The family unit secures the primal position. Then surrounding neighbors (I like to think of this as the size of an elementary school district) create a group, then the city/suburb, county, state and so on. Overlayed in various positions of priority are people’s associations with religious affiliations, work associations, general interest groups and passions.
For instance, at the federal level there is the US Department of Education with a primary function to “establish policy for, administer and coordinate most federal assistance to education, collect data on US schools, and to enforce federal educational laws regarding privacy and civil rights.” Then each state has their Department of Education which gives direction, collects data and funnels money to the School Districts. Despite all these layers of oversight many decisions are left to the most basic unit. The administration of Covid rules, for example, was determined at the building level of a district.
The situation in Ukraine highlights the difficulty in determining when a nested structure requires an outside intervention. In the case of war there is an impulse to violate political delineations, drawn into the foray due to an associational compact of humanitarian compassion. But rupturing the divides between units of responsibility is always controversial. It is not clear when to breach the boundaries of a marriage in the case of suspected domestic assault. It is not clear when to intervene in the administration of a failing school. It is not clear how to restructure a department of human resources which repeatedly fails to administer benefits resulting in human tragedy.
The foundational reason not to intervene is that the unit will come out of a challenge stronger for the experience. A neighborhood which comes together to reduce crime through block parties, cooperative interactions with police and the courts will develop methods for working together. Once they realize the rewards of safer streets, the recompense for their work will further encourage the efforts.
But at some point, the outer group has to call it, and step in. Unfortunately, this often does not happen. The cost/benefit logic says that if the subgroup school is performing at such a low level over a generation or more, then the outer group is taking a hit. The need to interfere is justified in order to maintain a pre-determined threshold.
In Minnesota there is a political debate at the moment regarding the timing of the National Guard’s intervention during the riots following George Floyd’s death in 2020. The mayor of Minneapolis claims he requested help early on. The Governor claims he wasn’t given authority to intervene in the city. This last argument seems to fall flat when three miles of a city in his state is set alight. At some point it is clear that the greater group is obliged to step in.
I believe there is a relative calculus for these tipping points. We just have to find them in the numbers.
If Wall Street is the mainstay of pecuniary transactions, then the church (of the denomination your choice) is that of social welfare. Still- even centers of voluntary good works have needs that are best served in private markets. One of those is the maintenance and upkeep of their assembly halls.
The photo above is an example of a spectacular building whose beauty requires regular and costly upkeep. For that reason, from what I hear, the parishioners have considered replacing it with a more modern structure. This in turn upset some local folks in this town of 4500 people who can’t bear the thought of it being leveled.
To model this scenario let’s consider what is public and what is private. Though the church owns this fine house of worship privately, other townsmen and women feel that its historical value is public to their community. But there are others who could have a public interest in this beautiful building beyond the valley in which it is nestled in. There are enthusiasts of architecture and enthusiasts of Catholicism and enthusiasts of the American frontier. The preservation of this structure undoubtedly has support beyond what is obvious.
The traditional method of holding onto vintage buildings is to create historic districts. This lays the ongoing expense at the doorstep of the party who holds it in private ownership. And these districts often depress the market value of the parcels as restrictions are not market friendly. In other words, to take what should be traded in the public sphere and force those desires into the private market is inefficient.
It would make more sense if the ‘publics’ who have an interest in this building had a structural option to support the maintenance. Since they are the ones who appreciate the value of preservation, they are the most likely to voluntarily support such activities. And due to this, resources will find their way to projects most suited to consumers intentions.
I’d be curious to know which non-verbal cues are the most readily interpreted. Language seems like it would rank right up there near the top. An accent reveals someone’s location of origin. Although in the US a tinge or a twang, here or there, can cover a large geographic mass.
In Minnesota we have a number of cities with American Indian names like Edina, Wayzata and Mahtomedi. A stumble here puts the speaker clearly out of state. The use of soda or pop lets us know who is from Wisconsin or Illinois.
But what about other indicators, facial expressions for instance. There are those who greet people full on, eyes wide, and smile bright. There are those who look down and away and mumble. There are again others who stand upright, rigid and talk with the hushed MPR voice that they do so well on Saturday Night Live. Each of these descriptions may have led you to conjure up an image and start coloring in some thoughts around these characters.
Facial gestures can also steer conversation. A hard stare, a doubting wrinkle at the brow, a mocking curl of the lips, are all tools that one can use to impose status, perceived or real, over another. And this type of power, is oh so important in managing the conversation and the direction of the interaction.
Body language is on a continuum. You’ve got the leaners and the straighten uppers, the gesticulators and the laughers. But I’ve always been impressed with the brashness of those who will turn their shoulder (or full body) to create a block between a newcomer and a gathered group. I mean you might as well shout for all to hear: “I don’t want you here!”
People are so caught up in what is said. I find the silent part of language is far more sophisticated. This is where the demarcation of in-group and out-group are drawn. This is where it is quietly confirmed whether you’re in, or out.
There is a watershed moment in the works as a Democrat, Amy Klobuchar, and a Republican, Chuck Grassley from Iowa, are teaming up against big tech.
Over the last twenty years a lot of leeway has been given to companies who needed control of frameworks in order to build what we know now as an ecosystem on the internet. A century ago the railroads were given similar leeway as they laid down tracks from east to west across the country. But now there is an appetite to disengage the big players from their power positions and open up opportunities for smaller players to get in the mix.
Most people agree that monopolies in the private sector work against the consumer. If producers gang up and set prices, then consumers have no choice but to pay what is asked of them. When producers compete for their customers’ business, then they become lean in an effort to provide the best product at the best price. The private interest of each individual producer is isolated from the private interest of a conglomeration of producers.
In this blog I describe a transformation which takes place when a group of people acting in a public interest compete for products against other groups acting in their public interest. For instance, during the early days of the Covid N-95 masks were a hot commodity. Minnesota and Iowa and Oregon were all out in the marketplace trying to secure orders from abroad. All were attempting to pursue the public interest of safety for Americans, yet in acting as groups, they bid up the prices of the masks. The appearance was a pursuit of a public good, yet since each were interacting at the state level, the economic behavior followed the private market mechanisms.
Could the same be said for public school unions, that they appear to be a public interest whereas they are truly private? The k-12 schools are provided on behalf of a public interest in an educated citizenry. And although many teachers carry a civic spirit, everyone would expect them to look after their private interests when negotiating the terms of their employment. Certainly, there was a time where the amplification of speaking as a group, with the help of a union, was necessary.
But the teachers’ union has grown in scope and power. They not only dictate teacher contracts, but get politicians hired and have greatly influenced the opening and closing of schools during the pandemic. And in those activities, they have failed to act in the public interest of the children’s education, as they are by essence guarding the private interests of their teachers.
I think I’m not alone in categorizing the teacher’s union as a monopoly in the k-12 industry. I doubt teachers can influence or overturn membership. I doubt that all teachers stand behind their union. I know many parents don’t. If you want to break up tech, why not break up the teachers’ union? They both show monopolistic behavior over a public utility.
Welfare economics ran into market failures because of economic man. The view that all transactions are performed by an individual actor looking only after his own interest is relevant for the pursuit of private goods, but not public. If the problem isn’t structured from the point of view of a group, then it all falls apart due to freeriding. If the economic analysis isn’t contained within a sphere of voluntary reciprocity, then the desire for each and every to fulfill only their needs tells a story of everyone taking and no-one giving.
But we don’t live as the caveman did defending a little hilltop. We live in families, tribes, cities and countries. We participate in work life and school life and sports life and associational life. When our diplomatic family would show up at a new post halfway around the world, we’d be met at the airport and driven to our housing by a couple from the embassy. Co-workers would be sure we knew where to shop, how to get the kids in school, and other pressing local customs. I was recently reminiscing with a military guy who nodded knowingly when I relayed how, for years, I had missed the strong ties of service personnel when I got out into the work force.
And because these are lifestyles, the assumption of the group and its obligations can be taken for granted. The compacts of who takes care of whom at different stages of life, over decades, makes for messy accounting. But that doesn’t mean it can’t be tracked. It just means we have yet to do so. It’s taken forty years, since a little rebellion in the 70’s, to name a labor wedge. And now there’s credit for sweat labor. And then there are the Wikipedia contributors, and many more cooperative types making cool stuff.
The independent actor, however, is so ingrained in the US psyche that the conceptualization of a group as a consumer and supplier slips easily out of the analysis. To further muck up the landscape, an institution thought to be public, acts as an economic man with regard to anyone outside the group. Take the teachers’ unions actions regarding COVID as an example. The focus is on the public health and well-being of the teachers, and the teachers alone. The initiatives of their efforts do not include the public health of the school children nor their families. There is no consideration of other public objectives or benefits to keeping children in the classroom. The services the unions are negotiating are only public to dues paying members.
Economic man is a lonely notion. Have no fear, he lives in groups! But his behavior traits are accurate and, as it turns out, groups can be selfish too. To keep it all straight, one must declare an anchoring point of view in any analysis.
All we’ve heard for the last several years is how the price of housing is going up. Up. UP! And for the most part that is true. Whether it is because Millennials are finally getting on their feet and need a place to have their own families, or whether the baby boomers are not moving to the lower priced condos and giving up their family homes, there is no doubt that there is a housing squeeze.
But seriously, for as long as I can remember, except in deep recessions, people have thought housing is expensive. Because it is! It is the largest portion of people’s monthly budget. And this distraction about the cost of a home is the most uninteresting fact one can take away from home prices. House prices are a rich reflection of the revealed preferences of a community.
An economist in the early part of the twentieth century by the name of Paul Samuelson came up with the idea that when consumers chose different products, they reveal what best suits their needs. This differed from theories up to that point which placed the burden on policy makers to decide which goods provided the greatest utility to consumers.
Samuelson’s relationship with economics is lengthy. This excerpt paints the broadest brush of his brilliance. “In receiving the Nobel Prize in 1970, Mr. Samuelson was credited with transforming his discipline from one that ruminates about economic issues to one that solves problems, answering questions about cause and effect with mathematical rigor and clarity.”
One economist, his junior by twenty years, heard the clarion call for greater mathematical representation of economic theory. Zvi Griliches contributed to a publication called Economic Statistics and Econometrics published in 1968. In a paper called Hedonic Price Indexes for Automobiles: An Economic Analysis of Quality Change, Zvi pulled apart the prices for automobiles so that he could show how much consumers were paying for improved engines or length of the vehicle or other features. By comparing the components of the cost of vehicles he distinguished between inflation and consumers revealing a preference for higher quality provided by advanced technology.
But back to real estate. The economist credited for using this statistical method (taking the price of a complex product and using data to divvy out the weighted values of its various components) was Sherwin Rosen in his 1974 paper Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition. Now this is exciting! The price of a house can tell you how much one school district is favored over another. It can tell you the value effects of violent crime, or proximity to mass transit.
The implicit prices tell us that we trade in public goods as well as private goods. We shop for city services and good roads, for youth programming and parks, as well as for good schools and safe streets. The implicit prices tell us how groups of people choose bundles of public goods. Real estate prices are incredibly rich with feedback.
So can we stop with the “They are so expensive.”
Melissa Dell, an economist at Harvard, writes about persistence. One of her studies considers evidence of the effects of colonization in Indonesia. The Dutch controlled the archipelago caught between the South China Sea and Australia starting in 1610 with the establishment of the Dutch East India Company. Although the trading entity evolved, control of the territory and its resources lasted into the twentieth century.
Dell finds that the European presence left behind some societal benefits which persist to the present day. From the abstract of The Development Effects of the Extractive Colonial Economy: The Dutch Cultivation System in Java.
We examine these in the context of the Dutch Cultivation System, the integrated industrial and agricultural system for producing sugar that formed the core of the Dutch colonial enterprise in 19th century Java. We show that areas close to where the Dutch established sugar factories in the mid-19th century are today more industrialized, have better infrastructure, are more educated, and are richer than nearby counterfactual locations that would have been similarly suitable for colonial sugar factories.
Using a method of comparison between two similar geographic areas, the researchers were able to prove that the existence of factories and supporting works carried forward as a system, even after the colonizing power departed. It appears that the economic value of the factory extended beyond the daily production of the product at hand; that there is a residual benefit beyond the export produced (to the benefit of the Dutch) which remained attached to the land.
We also show, using a spatial regression discontinuity design on the catchment areas around each factory, that villages forced to grow sugar cane have more village owned land and also have more schools and substantially higher education levels, both historically and today.
Modeling this in the public/private-externalize/internalize framework would start by identifying three groups: the Dutch, the in-Indonesians and the out-Indonesians. The story of colonization which has been popular of late only involves one transaction. In this case it would be the Dutch reaping private monetary rewards from the sale of sugar to all the ports on the sailing route through the Straits of Malacca, around past Ceylon, past the Cape of Good Hope and on back to Europe. And although this is true, it leaves out a bunch of other trades.
Dell’s work indicates that the in-Indonesians (the ones who worked in the factories) ended up better educated. Their interactions with foreigners included being taught skills required of the job. Because it was to management’s benefit, time was spent to provide a public good to the locals which they then internalized. Similarly, because it was a benefit to the Dutch in a private sense, significant investment was made in transportation infrastructure, as noted here.
The analysis thus far has focused on the private sector, but public investments may also be an important channel of persistence. The historical literature emphasizes that the Dutch government constructed road and rail networks to transport sugar to ports. The Dutch made large infrastructure investments precisely because it was profitable for them due to the extraction of a surplus, and they would have been very unlikely to make these investments elsewhere in the absence of extraction
These public facilities were a public good to all the Indonesians who chose to use them. But Dell goes further in her analysis to suggest that the in-Indonesians persisted in developing infrastructure after the Europeans departure as they were simply more in-tune to the process of petitioning government for improvements. Perhaps their higher level of property ownership also motivated them to pursue a public good as they themselves would privately benefit.
To tell a story as a one-sided transaction does not do history justice. A complete accounting of all the transactions needs to be in play to evaluate whether everyone came out better off, or not.
If you are looking for micro level data on a particular neighborhood, you’ll be happy to know that it is available curtesy of the United States Postal Service.
As a service to businesses who would like to mail marketing pieces to homes, the Every Door Direct Mail program allows you to search by mail carrier route to get a feel for neighborhood composition and level of income.
In this first screen shot the light blue line delineates a collection of 246 residents on Lake Harriet, one of the lakes in the Minneapolis Chain of Lakes. The average income of the occupants is reported at $142.89K (if you are from a coastal region this may sound average, but it is high after cost-of-living adjustments).
A couple of miles away, another mail carrier route shows a different density and income level. With 392 residents contained in a similar surface area, we can imagine smaller lot sizes. The adjusted income indicates more modest housing.
When working with big data sets, the details are often averaged out. A tool such as this one allows you to test the numbers and see if they are consistent across a larger area.
Or you can just use it to check on your neighbors!
The last two years have seen a terrific rise in carjackings in the Twin Cities. Loose numbers for the trend in the city of Minneapolis come in at 84 for 2019, 388 and 610 in 2020 and 2021 respectively. Whereas the crime was mainly centered in the city, now offenders are venturing out into the suburbs. Whereas the perpetrators were mostly unarmed, now they are mostly armed and often inflicting bodily injury.
Out of the 610 incidents there are certainly a portion inflicted by career criminals. But at our holiday potluck last week the conversation focused on the number of juveniles involved in the activity. One story concerned a recent incident in a wealthy third tier suburb carried out in broad daylight. When the car was apprehended later in the day, all the occupants were under fifteen years of age. Here are a few other reports which follow the same lines.
The day after Frey’s press conference (12/16), two teens pleaded guilty to multiple carjackings across the Twin Cities; in a separate incident, a pair of juvenile suspects were arrested in association with violent attempted carjackings outside two Lunds & Byerlys locations. One suspect is still at large.
Bring Me the News
As it has progressed to a larger geography, residents have organized to express their concern. Just over a week ago a community crime prevention meeting drew three hundred participants in a suburb abutting the city of Minneapolis. The mayors of five western suburbs compiled a statement and action list to address the issue. The role of the county attorney was questioned.
“We think the message being sent to criminals is you can commit this (kind of) crime this afternoon and be out by this evening,” he said. “From what I understand from the police officers, that is not far from the truth. I think we want the county attorney’s office to relook at that.”
https://www.eplocalnews.org/2021/12/18/suburban-mayors-meet-to-develop-response-to-
increasing-crime/
We’ve come full circle. The county attorneys had loosened penalties for low level crime in response to demands for social justice. Kids from disadvantaged neighborhoods get in the system, the reasoning went, and then they are hindered from progressing up through the regular channels of entry level jobs and on up the chain to self-sufficiency. Take formal charges off the table, and the balance will be set right. Unfortunately, releasing the penalty for low level offences has increased the number of kids getting into the carjacking business 6-fold, not decreased it.
Perhaps Minneapolitans would tolerate this increase in crime and see it as a penalty paid in order meet their social justice ambitions. But it is already clear that there is little appetite for such things further afield. More importantly, the loss of life amongst these budding ne’er do wells has been tragic.
Two teens are dead and three others in the hospital Thursday morning after Robbinsdale police say a reportedly stolen SUV crashed in Minneapolis.
The incident first began around 6 p.m. Wednesday (12/8) night, when a Mercedes SUV was stolen in an armed carjacking near the area of 12th Avenue North and Fremont Avenue in Minneapolis. ….
Police said five people were inside the fleeing SUV, all of them teens. One occupant was declared dead at the scene of the crash, and the other four were taken to nearby hospitals, where Robbinsdale police confirm that a second person died. Robbinsdale police captain John Kaczmarek told KARE 11 that the other three suffered significant injuries but are “up and talking” in the hospital.
MSN
As people puzzle over this escalating situation many of the same solutions are bantered about. But I say look to those suffering the greatest loss. To raise up a child to fifteen or sixteen years of age and then see them, on a whim, end up in a car which veers off the road and takes their life, must be a serious blow. These are the folks with the most to lose. A group of parents who have recently lost a child to this nonsense must have ideas on how different circumstances could have pulled their loved one in a different direction.
Daybreak on Christmas day was spectacular. The glittering golden beams broke the horizon with an explosion of color. How appropriate on the anniversary of the birth of the world’s most famous baby; the baby born in a manger; the baby who grew into a man who would bear the sins of His people upon a cross.
No matter whether you believe in this tradition, you can’t deny the mystery and magnitude of the feeling which takes hold of a parent upon the birth of their child. “Nothing like it,” one would say. “I thought I knew love when I married my spouse, but I had yet to lay eyes upon my child.” The magical relationship between parent and off-spring is undeniable and universal.
Yet for a generation or more, the west has argued against children, against large families and the hubbub that surrounds them. Too expensive. That’s the first objection. Some sort of calculation which tallies the dollars necessary to raise and educate a child. Stratospheric.
Too time consuming! Babies will change your life. True. But I don’t see how it is a bad thing to be transformed from a self-consuming single to a service provider to the next generation. Those sweet babies who, when you are 75, 80, 90 plus years of age, will be responsible for the upkeep of the world.
You will have to forgo your career, your passion, your ambitions! Maybe you could manage with one, but certainly not more. A combo of one child to two parents is doable. But a family would be too great a sacrifice. Then the children control the agenda not the adults.
And on it goes. It’s not the right time; they are not the right sort of parents; there are already too many people in the world! Reasons not to pursue the one extraordinary and unrelenting bond in the world- the love between a parent and a child.
A college educated adult maybe employed from the age of 22 to age 66, or over a 44-year time frame. To get a gaggle of kids through the high intensity young-years time of life might round into twelve or fifteen years. Then they are off with friends freeing up time for other pursuits. A third of the working career years are laden with child duties. Seems like a fair trade for help in the senior years, rather than a sacrifice.
Children are beneficial in the long game. We can find all sorts of motives behind a generation who only considered the short term. But that doesn’t matter now. It’s a new day and the beauty and mystery and enduring love between parent and child is a premise to hold onto.
We have a little suburban newspaper that shows up in the mailbox on Thursdays. It’s called the Home Town Source and runs letters to the editor about local issues, covers the city council and school board races, and devotes three spreads to high school athletics. This morning an article about a Plymouth man caught my eye. He’s a perfect example of a connector.
Students in Ghana received more than 16,000 books last week as part of a collaboration between the African Diaspora Development Institute and Books For Africa, a St. Paul-based nonprofit.
The effort was led by Plymouth resident Jote Taddese, a former Books For Africa board president and a board member of the African Diaspora Development Institute. Taddese is also director of diaspora engagement for Books For Africa and a vice president of engineering at Optum Digital, a United Health Group Company.
The common interest here is literacy, an interest that transcends geographic boundaries. And the connector not only has ties to another continent through birth, but also experienced personally the benefits of picking up a book at a young age.
“As a person who was raised in Africa and educated in the diaspora, I am a living example of when we put a book in the hands of a child, we not only help fulfill the potential of the child, but also change the impact on the lives of individuals and the global communities that child will touch,” Taddese said. “This is my life experience that always inspires me to support kids in Africa with books.”
Taddese was born and raised in Oromia, Ethiopia, and immigrated to the U.S.
Not everyone is fortunate enough to be employed by an organization whose mission parallels so nicely with their private life. And the non-profit’s accomplishments are notable.
Last year alone, BFA (Books for Africa) shipped 3.1 million books, valued at over $26.2 million, and 224 computers and e-readers containing over 650,000 digital books, to 28 African countries. More than $3.1 million was raised last year to ship these books to the people of Africa.
But this story isn’t particularly new. The living standard differences between the two continents is so significant, and the lack of basic tangible goods like books so clear, that there is little to complicate the direction of the goods and services in arriving at their destination. The books in fact are what I call idle assets, sitting amongst a community unused, available at no cost except the work to get them to their new location.
Markets become trickier when the difference between groups vary less, when resources are not idle but need to be drawn upon, when ‘need’ is voiced loudly by people other than the intended recipients. In these cases we will need to rely on benchmarks for guidance.
I stuffed Ace in the Hole, by Annie Proulx in my knapsack purse at 3am when we had to leave for the airport to catch our flight. I wanted something I knew I would enjoy to fill the airport and flight hours on our rather lengthy itinerary to Kauai. It’s a coming of age story of a young man who sets out to establish himself by taking a job as a land scout for a corporate hog producer.
If you aren’t familiar with Annie Proulx, her writing veers to the eclectic. Embellishments are generously layered on like thick butter on a slab of freshly baked bread. I love that about her writing, which I first discovered in The Shipping News. But this book is chock-full of local characters. They parade across the pages leaving an imprint of the bit of their lives which made the panhandle what it was when Bob Dollar showed up in search of hog sites.
Luckily for me the lack of a nightstand stacked with alternative reading options kept my eyes on its pages. Not until well past page 377 does the author get down to the business at hand. Who is it exactly who owns the land? Bob Dollar sets out to meet landowners, and to get to know them before asking them to entertain the idea of selling and leaving their former neighbors with the smell and dust of a hog operation. He tries to explain to his boss how the locals feel.
“But people down there in the panhandle feel like if they own property they have some say in what happens on it and next to it.
“You will find, Bob, as you mature, that lip service to the rights of the property owner is just that-lip service. What rules the world is utility-general usefulness. What serves the greater good will prevail. You know that highway departments can take property against the owner’s’ will to widen the thoroughfare for the general good. It’s a similar situation. And if it were put to a general vote, time and again it has been shown that the public supports such moves because they benefit the greater community.”
The business man proffers the rational response. The pressures of a market of needs will push the land to be used for the greatest good. He gives the example of indemnification for a roadway– which doesn’t quite ring true. The greatest good of a private hog producer doesn’t exactly parallel with the good of a public works project. But it doesn’t matter to the corporate guy, as he simply needs to sell his young scout on the idea that he is part of the greatest good. Perspective.
And Annie Proulx does justice to the perspective of the local farmers who have lived their lives on the poor quality land. When Bob suggests to his prospect that she would be happier moving elsewhere, she tries to unwind their story for him. Their residency is not the same an apartment rental. Their tie to the land is generational. Their stay is the result of decades of work and interactions which make place a part of them and they a part of it.
“Where might that be? In a city, I suppose. We’re country people and we’ve been on this land for four generations. The city is not for us. We’ve been happy here and my husband has worked his heart out to keep this ranch in order. We can’t even run cows on it anymore. The cows can’t even stand it. Do you think it’s right that some mean hearted corporation can buy up panhandle land and force out the local people? I don’t know what we are goin a do. My husband says if he were a young man he’d set grass fires and burn them out. I do not know what we are goin a do. That state senator in Amarilla is no help at all. He’s on the side a corporate hog outfits. The corporations got the politicians sewed up in Texas, top to bottom. And down in Austin the panhandle is far away and folks think it is a worthless place any how-they think it is perfect for hogs. Tonight we will suffer with that stench.”
The author does such a great job at putting on display the complexity of land as a product that is bought and sold. One could substitute out the scenarios and the feelings would remain the same. The seniors who have enjoyed a particularly scenic piece of property are pushed out by higher taxes. The middle of the road business is pushed out by the likes of The Gap, Apple, the latest fad. Present as a lurking villain is the utilitarian need to put in new roads, to produce the food people eat, to pay taxes on the services which a greater number of people require.
The tension is always there. And Annie Proulx writes it all out in an apolitical hand with a tenderness for the history of place and a fair amount of humor.
Networks are often used as a paradigm for the analysis of how individuals access communal resources. A job search is an example. An advantage goes to the individual who is able to call on friends or family to get in for informational interviews, be tipped off first about the best positions, and have a ready pool of favorable references.
The old boys club is a notably resented network. Those in the club interact fluidly to fulfill their objectives. But the same can be said about the ease of interaction at so many organizational activities. Those who worship together know exactly when they will have an opportunity to bump into a fellow parishioner. And there are Rotary clubs, and Alumni Associations and boxes at the theater. All set times and dates where people gather and can be accessed.
But in this type of analysis the interaction is in one direction. An individual needs something, a job, a contract, a bid opportunity, and the individual taps into their network to see if they can fulfill this objective. The formulation is not one of a group, where part of the group is providing job leads, information, introductions so that another segment of the group can engage these resources. The perspective is from the individual extracting from the group for private purposes.
The other way to view a network is from a group perspective. When I was an exchange student in Avignon, I returned from being in town to tell my house mother a story about a vagabond I had seen. She had me describe him and when she recognized his traits she said, ‘That’s good it’s him, our town can’t handle another.’ Whether there was more good to be had from the townsfolk isn’t the point being made here. It is the thought that a group has only so much to provide, the economics of the group has resource limitations.
Networks are thought of in linear nodal models. This is a singular view of the pursuit for a private objective. From the view of the group, what’s important is the measure of how much the group can provide. It is not important which individual steps up, just that someone does.
Since prehistoric man (and woman) sat around a fire, its flames provided warmth to those huddled around. Teepees made room for a central fire which drafted out through the culminating poles in the ceiling; medieval castles were fitted with mantels at eye level to accommodate large blazes beneath. The nostalgia of a crackling fire reaches back to those instances of communal comfort.
While the world is large and complicated some things will always fare better in collective use, while others will thrive under competitive forces.
The new era we’re entering is one which acknowledges and accounts for both circumstances and how they are blended. We are not returning to a lineage based power system, nor are we going to allow a meritocracy which blatantly ignores communal workers.
It’s time to allow for an accounting of both and an understanding of how they work in unison.
Did you know about Giving Tuesday? I didn’t. It’s a bit like Give to the Max Day, featured on this blog here. By creating a philanthropic holiday, a deadline is created to prompt procrastinators to write a check and send it in.
NPR ran an article about it today.
It’s #Giving Tuesday — a holiday marketing tradition inspired by Black Friday, Small Business Saturday and Cyber Monday, but with a twist. Today thousands of charities are asking us to open our wallets. But how can we be sure the group we donate to is effective — that we’re getting the most bang for our charity buck?
That question was vexing Elie Hassenfeld several years ago. He worked at a hedge fund, and he and a colleague wanted to give money to charity. Since they are numbers-oriented finance types, they wanted to maximize the results from their donation by finding groups that could offer the biggest impact per dollar.
“We were shocked by how little useful information was available,” says Hassenfeld.
Sure there were the rating sites that show how much a given charity spends on overhead and point up any red flags suggesting possible mismanagement.
But that’s not what Hassenfeld wanted to know: There was “nothing that said, ‘this is how much a charity can accomplish with the donation that you give.’ “
What’s interesting is that the article is a re-run of an article published five years. It seems there is a lack of momentum behind the idea. Hassenfeld indicates that he needed more information about the returns his philanthropic dollars would generate. So he took matters into his own hands.
And so in 2007, Hassenfeld and his friend, Holden Karnofsky, decided to start a nonprofit called GiveWell. The mission: Come up with an annual short list of charities they can recommend based on hard evidence. But it turns out this data-driven approach has its own set of issues.
It’s not surprising that the charities on their list are mostly located in the third world where cost of living differences create massive upsides for local employment of USD’s.
But perhaps there is something missing from a return on investment analysis. Maybe that is not the key index when it comes to why people donate. In order for a more lively engagement of philanthropic dollars at all levels of donors, maybe there is another sorting in addition to information regarding the scope and reach of the charities’ work.
That’s how much was raised in Minnesota yesterday during Give to the Max Day. Here is how the Minnesota Holiday started:
In November 2009, Give to the Max Day was supposed to be a one-time only launch party for the new fundraising platform GiveMN.org with a goal of raising $500,000. At the end of the day, generous donors had given more than $14 million in just 24 hours, smashing the goal out of the water, and starting a giving holiday in Minnesota.
https://www.givemn.org/giving-events/gtmd21/totals
Gala and fund raisers are nothing new. Just ask development officers at any non-profit. And many of the techniques employed during yesterday’s day of matchmaking originated from them: a limited timeframe, matching incentives, live-counters adding up the tally to meet a goal. What is different, here, is that the platform opens up a marketplace of giving. The boundaries of where and who is trading in the assists of work in the community changed. The benefactor was no longer one cause; a theater, a shelter, a youth center. Nor were the donors just the flashy wealthy crowd at a glitzy event in a downtown venue. This market is open to all Minnesotans, who can then feel empowered by grouping with others to support their passion of choice.
People give when they see the need. Citizens agree to pay taxes as an acknowledgement of the need. But they also don’t want to be the only one giving- it is a communal activity. A formal taxation system provides assurances that others are also on board to assemble the public goods as intended. In philanthropy, a one day event provides the accounting, the final tally, which confirms success back to its audience.
One can’t help but notice the parallels to the concept of state capacity. This has been a salient term in recent years. Here is how one researcher put words to it:
The concept of state capacity—“the ability of a state to collect taxes, enforce law and order, and provide public goods”1—was developed by political scientists, economic historians, and development economists to illuminate the strong institutional contrast that parallels the economic contrast between rich and poor countries.
https://www.niskanencenter.org/state-capacity-what-is-it-how-we-lost-it-and-how-to-get-it-back/
On Give to the Max day, donors pay funds (a tax) to support their chosen community works producer, who in turn transforms the funds into their specialized public good. The enforcement of product delivery is partially enforced by laws, but mostly by the pressures of competition to be a good producer for those who depend on the services provided.
What the Give to the Max platform allows is a wider marketplace. What Give to the Max Day shows by the $34,390,470 collected yesterday from Minnesotans tall and small, urban and rural, rich or light in the wallet, is that we have a notable amount of state capacity.
In the first of a newly posted set of podcasts entitled Minds Almost Meeting, Agnes Callard and Robin Hanson tackle the two horned paradox of honesty. Agnes explains that the first horn is to “hold up your communication to the standard of it’s being honest, which is to say, being as truthful as you can.” They define honesty as a form of communication which seeks to work toward actions which results in good. And this is where life is complicated as being truthful can be at odds with an action outcome from such communication.
On the one hand we have a standard for what it is to be honest, and on the other we have the desired action of a good outcome through honest communication. The tension occurs when the words, phrases or inactions are not uniformly applied. Here’s an example. Say the mom of the ace pitcher on a Little League teams says, “We’ll be there” in response to the coach’s tally of who will be at a final playoff game. Earlier that same day the mom told her neighbor, “We’ll be there” when asked about the couples’ interest in a night of canasta.
The same words. The same intentions. But not the same level of commitment. Being a no show to the playoff game is completely different than missing an evening with neighbors over cards and a few beers.
Let me backtrack a minute, to be sure your thoughts have not settled into the neglected neighborhood life, to be sure we are still talking about economics and not social niceties. Youth sports is known to have several benefits. Kids who participate learn about teamwork, prioritize their time, do better (on average) in school and exercise regularly. The persistent advantages from youth sports surface in public health and well being. (There are costs, of course, to the infrastructure which supports these games– but that’s for another post.)
Even occasional gatherings of neighbors for beer and a barbeque or game of cards can generate economic benefits. People hear about jobs or set up connections to contractors or suggest areas in the community which are in need of support. The network marketing that transpires at social gatherings is of value. It is not resented in the way that cigar smoke filled rooms at men’s clubs were in days of yore. The neighborhood is not exclusive in that way. In fact it is a priority to make attendants feel welcome and comfortable.
And for that reason when a guest wears a colorful dress with animals print, she will more than likely receive a compliment. Since the priority in this platter of economic activity is create an ambiance which is fun and upbeat, to be sure that the people are happy to be present, and thus will do their best to get along, little lies are very permissible. It is not a deceit as it goes towards the action of the good of the group activity.
Whereas social niceties is not what is expected for the Little League playoff game. The commitment here is to the team and to winning the game. A no show by any family would be a considerable let down.
Lives are big and messy. We are involved in many activities that vary throughout our lives. The paradox of dishonesty as presented by Agnes Callard is minimized when you align the various economic platters with their expected norms. It’s much easier to accept that in social gathering there will be a lavishing of less than honest flattery.
My daughter came home from high school the other day questioning the appropriateness of a teacher (a math teacher nonetheless) in some way incorporating ‘obey thy husband’ in a conversation with a female athlete. Daughter was sure this was out of line. But as in many cases, the story was missing context. The teacher had switched out his identity. He was on the field as the liaison for the high school’s chapter of the Fellowship of Christian Athletes. Still, daughter was a little taken aback by the submissiveness language.
I shared my own story of how decades earlier, while still in the wedding season of life, I had sat up a little straighter in the pew when the bride utter the Missouri Synod version of the Lutheran marriage vows. ‘Obey my husband’ is still pegged in there between ‘honor him’ and ‘keep him in sickness and in health.’ For the most part the Lutherans church keeps in sync with current trends. Yet this blanket submission seemed as archaic as gilded lettering on a manuscript, then as it does now.
As the teacher was working outside of his day job, he was within his prerogative to reveal a small part of his belief system. My kids had experienced an elementary school era of celebrating every other religion by name, while deferring to their own as a holiday celebration. This has conditioned them to think something is amiss if anything Christian is actually voiced above a whisper. The act has become paramount to a missionary conversion of some sort.
But what bugs me more than propping Christianity in a dark corner, is this attention to minutia which distracts from form. The quick objection to a few words of a ceremony takes away from the conversation of what it means to marry. This drilling down of a few words under the assumption that they will fasten a female’s will to some objectional subjugation is a distraction from the more fruitful conversation of the nature of the binding of two individuals in marriage. What does it look like when offset within a community of mutual cooperation? What form do they become when unified before friends, family and God?
I think it would be helpful to view the new couple and ensuing family as a grouping, a new unit. And within that unit the work its members will get done will more likely be based on skill than specific assignment. But from the outside what that unit consumes or contributes is based on the collection of their activities. If they choose to present their views to the outside world by giving one partner the microphone, this would seem to benefit all of them.
No matter the form of a grouping–a couple, a minority, an association– there are frequently others, on the outside, trying to manipulate their public voice. Trigger topics are metered out to stop conversation about form, the basic building blocks of social arrangements. Those few short words, or few awful people, are set out to distract, so folks divert their time to manufactured issues. And in the confusion their voice is stolen.
There’s a good chance that upon strolling by a pre-school classroom you’ll hear: It’s mine! The voice comes from a toddler who is grabbing the Preshool Playhouse plastic airplane from one of his chums. Ah- the battle over ownership starts young. There is a natural inclination, for some more than others, to own something. To be in charge of something. To have control.
Ownership around the house can be communal. The appliances don’t all have coin slots as the washer and dryers do in apartment buildings. Who ever is a part of the household makes use of most things. Perhaps within the confines of a bedroom, private items are stored which are off limits to the general public of the home.
Ownership of the upper-pay, prestigious jobs once belonged almost exclusively to ivy league educated men. Feminists from the 60’s and 70’s would have you believe that these jobs were public to all white men. But this is rather silly when you think about it. The club was a much smaller subset of men who smoked fat cigars in dark paneled rooms and who bought suits from the same clothier and who all shot below 90 on eighteen holes.
Isn’t the tussle over abortion about the ownership of the fetus? To whom does the baby belong: the mother or society?
Say hoodlums set up shop in a local park. Pretty soon none of the neighbors use the park as they are adverse to being mugged. The ownership of a wooded greenspace, that once belonged to a city, now is captured by a subset of the city. And they are not likely to relinquish their place of business voluntarily.
Ownership of a home maybe noted to a couple on the title in the county records, but all that space in between the homes is a joint concern. The effect even edges in over the maintenance of the front yards. Rules about grass height, number of vehicles in the drive all point to a view that the aesthetic of the street is owned by the neighborhood.
The Armed Forces will set you up with an education which you internalize for a private benefit, but not before you serve for four or six years. That way your employer can capture some of those employable skills. Other employers will match a stock option retirement investment in order to tie their employees into an ownership mentality.
The divorce courts have a lot to say about ‘That’s mine!’ Whereas each partner of the matrimonial union may be viewed as an individual by their employers, the court looks at the household when giving guidance on who owns what. You see you can be an individual as well as one member of a group all at the same time. And your ownership position maybe influenced simultaneously by this duality.
Ownership types are good to understand. Ownership by the individual or a group operate under different maintenance plans and incentives. So not only do we need guidance on the dissolution of group ownerships, but we can also be more effective in all sorts of trade once by utilizing the appropriate incentives and mechanisms for each type of proprietorship.
A few days ago on Twitter, a poster asked: What is love? Elon Musk of space travel fame (amongst other things) responded with this shot of his (presumably) adorable child. Like all new parents, I too was taken aback by the strength and uniqueness of the emotion which ties us to our children.
It’s not the passion love that you feel toward a sexual partner. It’s not the bonding devotion love you feel toward your parents. It’s the I care about every detail of your life, every atom of your existence, type of love. The I will be pathetic in support of your interests type of love.
In most cases, there are two people with this magnetizing pull to every child. This they share even when the bond between each other maybe thinning. The couple can go to the school play and revel in their child’s performance while at home they are putting on a show of a happiness between them.
And if the marriage becomes too strained and talk of divorce crops up like thistle in a bean field, then the wisdom dished up is, Stay together for the kids’ sake. The cliché advice is to put the interest of the children (the implication here is that the children receive guidance and support from both mom and dad) first and suck up the tedium that settles in after the first decade of marriage.
But this is all wrong. It’s backwards.
Isn’t the joy and satisfaction of watching a child succeed amplified when done with the one other person who shares that same interest? Aren’t there synergies when additional care and support is needed to bolster that child up when shared between the two people in the world who can be counted on to step in?
Sharing the job of parent is a benefit not just to the child but to the parents. And it’s a relationship that last a lifetime. The logic of love says that parents should stay together for themselves, the group, and not just the children.
If you follow my blog you know that my childhood was spent abroad as part of a US diplomatic family. My parents were partial to third-world countries, and living conditions often involved political upheaval. When we would return to Midwestern America for home leave or between postings, I found myself fielding questions about what had made it into the newspapers.
They were curious about the violence and warfare printed in bold across the mastheads. They were curious about the loss of life due to famine or flooding. In their minds, the reality of our domestic surroundings landed squarely between ghoulish and appalling.
What they couldn’t key into, and quickly lost interest in any efforts to follow an expanded explanation, is that the headlines were just snippets of life occurring all those miles away. There were still shopkeepers opening their storefronts, kids going to school, and bureaucracies slowly cranking out their workloads. The airplanes flew out of the airports, and cars took people to their appointments. You just couldn’t go anywhere, you had to stay away from the trouble.
People in the Midwest knew one thing about the places where we lived and they simply chose not to make a complex ecosystem of the foreign community part of their reality. This is us here in the US. Over there, across the world, they are shooting at each other. And before you judge my fair family members too harshly, don’t we all do that all the time?
For instance, do you remember the first time you met an individual with a substantial disability, like being in a wheel chair? Wasn’t the disability so all consuming that you couldn’t move it out of your focal view and enter the context of the person’s daily activities? Aren’t there areas in the city you live in right now that are inaccessible to you whether it be because they are too wealthy or too poor? The lives the people who live in those spots are out of the scope of your reality and it is hard to fill in the missing pieces.
The reason I bring it up is to emphasize that even though other people live in systems out of our normal patterns of activity doesn’t mean that our interests will never overlap. In fact there are probably many circumstances in which crossing paths could be mutually beneficial.
The point is to not get so distracted by one feature as to shut out entire groups of people from the reality of our lives. Because for as interesting as we all think we are, we are actually more ordinary than we’d care to admit.
There’s been tremendous conversation over the last year and a half about being more inclusive. The number of Director of Inclusion titles on LinkedIn recently provides testimony to the level of interest in this topic. Everyone from the PTA to private businesses profess the need to be more inclusive of others in our daily lives.
But many people seem to stumble in the implementation. Take a PTA greeting table at the kickoff of the school year parent event. There’s a group of volunteers standing behind a desk displaying pamphlets and clipboards for an email signup sheet. There’s chatter and interaction, but not with the parents streaming by, with each other as they catchup on family updates.
And it is not only that people don’t even try to make eye contact into a crowd and bring a newbie parent over to explain what the PTA does. The closed group body language promotes the idea that we are all friends, and you would be an outsider. Of course friends group together to do good work. But to not cover that up temporarily in order to welcome in newcomers is self-defeating.
Very few people (who have never been an outsider themselves, through travel for instance) can handle the social discomfort of standing by a relative stranger without congenial conversation. So as soon as a silence fills the void between them, the established one feels that pressure to move onto a more festive atmosphere. And often does exactly that.
Sometimes there is a deliberate effort to exclude people from the topic at hand. This time not because they are the minority (which fittingly makes them a valuable resources for some such chatter) but because they are lumped into a greater group of suburban people who are not suppose to voice an opinion of any matter Minneapolis.
The self conscious tension around urban political matters and the upcoming elections of all the City of Minneapolis’ city council members has brought down a sound barrier of complete disinterest in hearing from anyone beyond the city boundaries. At a time when bias and self deception is at an all time high, I speculate that leaning into interaction from those beyond your social boarders would be fruitful.
For all the talk of inclusion, the fencing off into action groups is at the route of anything systemic.
This morning we had our weekly exceptional properties meeting at a nice two story home in Plymouth. It is similar to the Tuesday morning meeting realtors have with their sales offices in that there is networking of the inventory coming to market, and buyer needs. There is also conversation around what agents are seeing in the market.
The brisk activity has driven prices to new heights at all price points. Normally the entry levels homes are pushed up fastest as more buyers can afford these, and the momentum ricochets upwards stalling out in the higher price bracket. The discussion this morning centered around the numbers that indicate the luxury market surge is outpacing the entry level homes.
Here is the most recent data from the Minneapolis Area Association of Realtors comparing the Twin Cities’ Average home price increase to that of the Lake Minnetonka Area.
Lake Minnetonka is a twenty-two square mile nautical playground for wealthier Minnesotans. The story goes that these folks have benefited from swelling stock portfolios over the last fourteen months and are not shy about showing up with cash offers for lakeshore dwellings in the $1-2-3 million range. Hence the price increases here are up 21.9% over last year, almost double the increase over the whole metro.
But here’s the kicker- one agent complained that the last few homes her clients bid on in multiple offers, have all gone to Californians. Then another agent quipped that prices here are nothing to them (which is true!). And another confirmed such fact findings.
It reminded me of an article I read a few years ago in the South China Morning Post: Chinese buyers abandon Australia’s housing market, still get blame for rising prices. Even when foreign buyers had fallen by 80%, the public was still blaming rising prices on the outsiders.
Gentrification sums up these same negative impulses. Someone from the outside, who has more money (or is willing to spend more money) than me on real estate in my back yard is creating a cost burden. In most cases, when the analysis is done, the one event– a few Californians purchasing Lake Minnetonka shoreline- isn’t enough to drive the prices. The discomfort might have more to do with stranger danger than statistical facts.
Aussie household are in turmoil after their census included this simple request.
“In the last week did the person spend time doing unpaid domestic work for their household?” the ABS asked.
Perth Now
I mean seriously, is there a better dog whistle to get couples yapping at each other over the perennial debate about who does what around the house?
“Include all housework, food/drink preparation and clean-up, laundry, gardening, home maintenance and repairs, household shopping and finance management.
The ABS asked Australians to estimate the amount of hours they’d spent on such unpaid work, offering five options ranging from none to more than 30 hours.
Social media was alight with debates on who gets credit for what in the ongoing partnership of domesticity. But I question if sorting by individual is more useful to a national government than sorting by household.
Call me nostalgic but I remember when people used to comment: “The Johnsons, they do so much for the community.” There was a time when couples were considered as a unit. And when you think about such things as unpaid work, a longer time frame, one that would allow each person to perform different duties at different times, makes more sense.
I know of several men, now in the twilight years of life, who were completely preoccupied with work-for-money jobs in their younger years, but are now fulltime caregivers to their spouses. There was a time when they would have been disdained for doing nothing within the household. Now they devote a majority of their time to enabling their household to stay together.
From the government’s point of view I would think this is the interesting unit of analysis: the household. How much time in unpaid labor is required to nourish a household? to educate, to retain good health, to keep in secure mental balance? These household averages could be quite useful.
Instead the census question seems to be provoking some fudging of the numbers.
Since last night, there have been countless reports of family rows over who spends the most time on chores — from who does the bulk of the cooking to whether putting your own dishes away can be used to bump up your “unpaid employment” tally.
But maybe more importantly it reinforces the ‘i’ in an arrangement that is about the ‘we.’
In Shakespeare’s Hamlet, Polonius instructs his son not to get involved in the borrowing or lending of money from friends. This bit of advice has given commercial banks and credit unions a bit of a boost in fulfilling the need for third party credit. Which in turn provided me with one of my first jobs as a lender behind a banker’s desk in the lobby of a local bank.
Back some three decades ago, before electronic magic of all sorts, we used to take applications by handwriting the information into neat little squares on a paper application form. Whether the applicant sat across the oversized dark wood desk or we talked over the phone, the interaction also served as a time to discuss the customer’s ambitions, the time frames and mechanics of the process. This was something called customer service.
The bank advertised car loans and home equity loans, reserves on checking accounts that would advance when the account was overdrawn, or unsecured lines of credit. Over the course of a week it wasn’t uncommon to look at 80-120 applications. These required information on employment history, wages and asset and liabilities statements. So as you can imagine, one starts to get a sense of the earning potential from a variety of employments. And where people spent their money.
Having been raised in a private school type of environment, I was unfamiliar with the whole segment of society that fell outside the professional class. Socially I was only familiar with families whose parents earned a living as a result of a higher level of education. And, of course, was steered to going to college to attain a similar standing. Imagine my surprise when I took an application from the service manager at a midsized car dealership in town. He earned twice what the average attorney made.
Granted this was during an era when there were an abundance of attorneys achieving their Juris Doctor. But still. A service manger, or any one wielding a wrench under a vehicle was not suppose to rise even to the lower edge of the white color professional crowd. This was the first crack in the veneer encasing an implied class and resource structure.
Come to find out there were whole neighborhoods of folks who worked in the trades at all sorts of income levels. They didn’t drive jaguars, they drove trucks with carried similar price tags. Their hunting dogs needed kennels so they lived in cities that were not only pet friendly, but didn’t mind a fifth wheel parked on the concrete pad along side the oversized double garage which was sheet rocked, heated and had a TV sitting area.
I had no idea of the social depth or financial variation of such folk. They weren’t simply a group, a class. They were a whole ecosystem with pecking orders and special interest subtleties.
My most underrated source of interesting books come from estate sales. You never know what you might come across, which is part of the fun of it. But you can be sure to see books that are not on the front tables at the bookstores. And you can actually stand there as long as you want sifting through them creating two piles: ‘maybe’ and ‘definitely.’
It’s a treat to come across a collection of philosophy books. Partly because people’s shelves often hold various genres of novels, but fewer homes house books on thoughts. I brought home a bundle a few weekends ago which included a Cornell University Press soft cover on the expansion of Rome. Chester G. Starr Jr notes:
If we are to understand the significance of Roman history and the reasons for the expansion of Rome, it is worth stop ping a moment to investigate this Roman character, as revealed in traditions and in religious beliefs. The traditions, which were preserved mainly in the family and so passed from father to son for generations, were often tied intimately with landmarks about the city; points such as the Tarpeian Rock, the Lake of Curtius, the Sister’s Beam, and others each had its tale pointing some patriotic virtue. Together, these traditions reveal a patriotic people who were above all else obedient to established, legal authority–the family, the state, and the gods.
The Emergence of Rome, As Ruler of the Western World by Chester G Start, Jr
When writers use the word tradition in this setting I really think they are referring to the work of the family, which ends up being in large part the work of women. The guys are off leading, soldiering or earning money. The women are maintaining the traditions. But note how clearly the groupings by mutual objectives are stated: family, state and gods.
Did the Romans understand better than anyone in their day that each of these obligations created an economic ecosystem or platter? That the mission of Rome could be an overarching ambition which left the families and their local cities free to pursue their priorities?
It appears that the Romans expanded across territories with a clear deal on the wind. Give us a few of your good men and you will be protected under the umbrella of the Empire. Other than that, we won’t tax you and you are free to go about your business.
As they advanced, the Romans opened up roads along strategic routes and established colonies of Roman and Latin families as permanent garrisons at key points. Land hunger certainly must not be discounted as a reason for the expansion of Rome; it has been estimated that conquered states on the average lost one-third of their land for the benefit of Roman settlers. Otherwise the defeated were not unduly penalized. They yielded control of their foreign affairs, they entered a permanent alliance with Rome by which they agreed to furnish a set number of men to the Roman army, but they paid no taxes and retained autonomy in their local affairs.
Furthermore the Roman infrastructure of roads, bridges and aquafers benefited the general public. The Romans understood how to give in public goods so that could gain what their warring faction desired, an army of the most physically able. A balance of exchange was struck between the multiple groupings of the public and the private.
I took a second glance at Costco today as my cart wheeled by this display, to be sure it wasn’t a typo. A C-note for a pound of beef. Seems high.
Is it just me or does it seem contradictory to others that those who frugally shop at a high volume retailer may not be the same person as those interested in extremely expensive beef?
Lack of progress is often addressed with the ‘we can do better’ call to action. Things will get better if we just man the boat and check the weather. There is an assumption that everyone is sailing on the same winds. When in fact, there are people in the boat tacking against the wind or dropping the sails completely.
The naysayers can have the best intentions in mind. The naysayers can further the direction of the journey by making others fight for it, define it even further than they had originally considered. The naysayers help refine decisions. But sometimes the naysayer simply sink the ship.
Fences, a play written in 1985, is set in a familial scene where a father naysays his son’s ambitions of becoming a ball player. It didn’t work out so well for him, he reasons, so success will elude his son as well. He will save him the pain. Or will he? Does a father use his power as an adult out of faithfulness to old anguishes, or is he truly acting to cushion his progeny from life’s hardships?
The playwright, August Wilson, doesn’t render judgement.
But anyone who has been around a decade or more knows, to misuse a position of power is to tread away from progress not towards it. In this story, father derails a chance at a football career, so son leaves home and makes good in a military life. You might say he overcame his naysaying father, but at the expense of any further family support through early adulthood. You might say son was better off without them, but at the expense of their greater community.
Wilson, who wrote this Pulitzer prize winner while living in St. Paul, provides more examples of how social exchanges can fence in a family. In business, once the money runs out, no one shows up for work. The business shuts down. In family, chits and obligations can continue to pile up. When left outstanding others must step up to pay the bills. And then possibly others still.
The paper, Recreational and Resource Economic Values for the Peconic Estuary System, by James J. Opalueh, Thomas Grigalunas, Jerry Diamantides, Marisa Mazzotta, and Robert Johnston was written in 1999 as a study of the value of the Peconic Estuary system on the eastern end of Long Island. They used four methods to estimate value, but let’s compare just the first two: the hedonic pricing method using home values as the dependent variable, and a travel cost study. Here’s their introduction:
I.B. 1. Introduction and Overview
No single method can capture the value of the variety of services provided by the natural assets of the PES. Recognizing the many uses of PES natural resources, we designed and implemented a suite of four non-market valuation studies in order to provide estimates of the value of particular services:
(1) A Property Value study examines the contribution of environmental amenities to the market price of property. Using the Town of Southold as a case study, the Property Value study was designed to measure values of amenities to residents living in the immediate vicinity.page 11.
(2) A Travel Cost study uses original survey results to estimate outdoor recreational uses in the PES and the economic value that users have for four, key PES outdoor recreation activities: swimming, boating, fishing, and bird and wildlife viewing. This study also examines the impact that (A) water quality has on the number of trips and the value of swimming and (B) the effect of the catch rate on recreational fishing, important recreational uses of the estuary and activities much affected by water quality and resource abundance.
Now this report looks at a fairly significant natural amenity, but isn’t the idea that residents place value on any public open space going to be subject to the same analysis? Whether a park with playground equipment, a lake with a swimming beach or a ravine with hiking trails; all these open spaces are valued both by homeowners who live in close proximity as well as others who come just for a visit.
The first approach the authors use to estimate a value of the public amenity is to calculate the portion of the home sale prices which can be attributed to the proximity of the natural resource. The idea behind the process is, if you could have exactly the same home, how would the value of the home change as it moved away (or toward) the public amenity.
We apply economic methods using the property value (or “hedonic” method) to a database comprised of all Southold real estate transactions in 1996 and GIS parcel coverage data for the town. Briefly, the analysis estimates correlations between property values and levels of valued environmental attributes, including open space.
page 27
Here is a further explanation on how the regression model works:
The Property Value technique is based on the assumption that a relationship exists between the market value of a property, and the characteristics of the property. The Property Value method uses a statistical technique called “multiple regression” to assess the impact of each characteristic on the market value of the property. The technique simultaneously compares a large number of properties with different prices and different levels of each characteristic. The method establishes which characteristics are associated with higher values, which are associated with lower values, and which have no significant impact on values. The model also estimates the dollar magnitude of these impacts–that is, it estimates how large an impact is likely to be caused by a specific level of a specific characteristic. Using this technique, the impact of different environmental amenities on nearby property values can be estimated.4 The technical details of the property value model (or hedonic technique) are presented in Appendix A.
page 16
Please read further through their paper for the statistical details, but what I would like to focus on is the equity, or capital, which is captured in each home due to its association with a public amenity. Buyers and sellers in a well functioning marketplace are bidding on the homes and thus determining what the market will bare for this infrastructure (not sure why it is considered a non-market approach). There is a premium in the offer price for greater access, hence they are pricing out the desirability of the public good.
In addition to what the authors derive as dollar figures for the market value retained by residential properties, they also note that there is value to people who use the estuary from a distance. This value is derived by a second process in step two. It is done by estimating number of visits, or trips made to use the open space. In a sense it is a user fee estimation.
I think they go awry by shifting from a capital perspective to a user perspective. We pay our water bills on a user based system but that does not represent the value of having the pipes in place to pump fresh water to all residents. And certainly metro user fees do not equate with the cost of installing mass transit. Analyzing visits more appropriately syncs with management issues such as how many lifeguards to have on duty, how often the trash bins need to be emptied and so on.
I offer a platter perspective for the inclusion of the value to the greater public who use the estuary. The residents adjacent to the estuary, who enjoy a view over an open space and a walking trail out their back yard, enjoy one level of access. The group of people who live in the local town have another relationship. And people who visit from across the county may derive yet another coefficient in front of the data which represents access to natural amenities within their reach.
At each level exists in an eco system- or platter– and a data set representative of the value of these public goods.
Far and away the biggest obstacle blocking first time buyers from owing a home is fear. There are two types. Fear of the house. And fear of a poor decision.
The purchase of a home is one of the bigger commitments the average guy or gal makes in their life. And the product is a large, multifaceted, multi-mechanical type of a thing. Most people lack a thorough understanding of all that exists behind the sheetrock walls, the workings of the appliances or what exactly is, or is not, connected at the street.
But sign the papers they do. Nod at the inspector as he or she prattles off a variety of flaws in the property. It isn’t any specific understanding of a home that makes buyers secure in knowing everything will be alright. It’s that they most probably have parents and siblings who own a homes, and since they do it– hey it can be done!
When you don’t have that family background of assurances, you don’t have that same sense of security about the whole thing. If a landlord was always the one to fix something, or a management company ‘sent someone over’ then a whole bunch of conversations about ‘what do we do when this happens’, ‘what’s the best way to handle things when that happens,’ and ‘good grief we don’t call a plumber for that, do you now how expensive they are?” went missing.
And if you’ve never eavesdropped on such an analysis, then fear fills up and grows in this void, the void left by not knowing who exactly to call when this beast of a thing called a house has an issue.
Then there is fear number two. The fear of making the wrong choice and having everyone else in on the mistake besides you! For some reason there is frequently a large audience in on home buying conversations. Said audience has plenty of opinions, even when they themselves have not been in the market for over a decade. And these are generously and gratuitously provided.
Many buyers can get caught up in the moment of an objection presented in a workplace conversation, but after further vetting the issue with other homeowners they often right themselves back to an even keel. Those who have few homeowners within their networks are pressed to gather enough information. They don’t know who to trust. There are disparate levels of confidence.
Although the classic policy response to getting more renters into homes is pecuniary, my sludge audit reveals that it is social, as opposed to financial, support which is lacking.
I happened to pick up this novel by Graham Greene at a recent visit to an estate sale (an excellent source for interesting books). I’m sure my hand fell on it as it reminded me of so many books that floated around my childhood home. Bindings with the likes Le Carre, Mitchener, and Follett printed on the spine, littered our book shelves.
I had read a Greene book before, and enjoyed it, but the fact that I can’t recall its title is proof that it left little more of an impression. This one is a different story. It does not surprise me that BBC News listed The Quiet American in the top 100 most influential novels.
I always like a puzzle, and the first pages tell of a murdered American. But this intrigue quickly falls to the background behind group ambitions. The CIA has its objectives, the British journalist his, the French colonist theirs and the Vietcong their own. Each character acts as one but is representative of many.
And each tells of their domestic obligations. The focal point of this angle of the story is the rivalry for the affections of the beautiful Phuong. Guided by her sister’s advice, the young goddess pursues a marriage contract over loyalty, highlighting the traditional stringent norms of the Brits versus the immature brashness of the Americans.
Post world war two spy novels are one of my favorite genres. They are old fashioned now and carry a very male dominant perspective, but the international settings and inter-country conflicts will always hold my interest.
In probability theory and statistics, Bayes’ theorem (alternatively Bayes’ law or Bayes’ rule; recently Bayes–Price theorem[1]:44, 45, 46 and 67), named after the Reverend Thomas Bayes, describes the probability of an event, based on prior knowledge of conditions that might be related to the event.[2] For example, if the risk of developing health problems is known to increase with age, Bayes’ theorem allows the risk to an individual of a known age to be assessed more accurately (by conditioning it on their age) than simply assuming that the individual is typical of the population as a whole.
https://en.wikipedia.org/wiki/Bayes%27_theorem
What the Reverend Thomas Bayes came up with three hundred years ago has proven very useful as it allows predictions for future events based on a history of past events. Later on the concept was formalized by Pierre-Simon La Place as The Central Limit Theorem. Its statistical applications are used widely in medicine, pharmacology and finance.
But that’s not the part I find most interesting.
What we don’t know is Bayes’ philosophical aim in the hours he must have spent whittling away at untruths to reveal what endures. We have more insight into the thoughts of Richard Price, the man who shepherded Bayes’ manuscript to the Royal Society after his friend’s death.
What probably motivated Price to work on Bayes’ manuscript were the theological implications that Price perceived in the result. At this time in his life, Price was deeply immersed in theological and philosophical study. Price notes in Bayes (1763a) that Bayes had written an introduction to the paper; but Price did not include Bayes’ introduction and instead supplied his own. In other manuscripts of Bayes that I have seen (Bellhouse, 2002), Bayes typically gives no motivation for the mathematical results that he presents. The same may be true for his essay on probability. Price only says of Bayes that:
… his design at first in thinking on the
subject of it was, to find out a method
by which we might judge concerning the
probability that an event has to happen,
in given circumstances, upon supposition
that we know nothing concerning it but
that, under the same circumstances, it has
happened a certain number of times, and
failed a certain other number of times. He
adds, that he soon perceived that it would
not be difficult to do this… .Later in the introduction to Bayes (1763a), Price states that:
Every judicious person will be sensible
that the problem now mentioned is by no
means merely a curious speculation in the
doctrine of chances, but necessary to be
solved in order to a sure foundation for all
our reasonings concerning past facts… .Further on in the paper, after discussing de Moivre’s work, Price states:
The purpose I mean is, to shew what reason
we have for believing that there are in the
constitution of things fixt laws according to
which events happen, and that, therefore,
the frame of the world must be the effect of
wisdom and power of an intelligent cause;
and thus to confirm the argument taken from
final causes for the existence of the Deity.The Reverend Thomas Bayes DR Bellhouse
What motivated Price to work on this paper was that to him the result provided a proof of the existence of God. Price came back to this theme in his theological work Four Dissertations (Price, 1767), which is mentioned by Morgan in the context of refuting Hume. A discussion of Price’s argument was given by Thomas (1977, pages 133 and 134).
Both Thomas Bayes and Richard Price were ministers and thus it is safe to assume they found truth in the teachings of Christianity. We might even speculate further that Bayes’ was trying his hand at a logical representation of the existence of the Holy Spirit among men; that Christians should trust one another to act in the ways of Jesus without the need for an immediate tally of deeds done.
For instance, consider a case of twelve neighbors living along a road; one might go to the effort of picking up the stray garbage; one neighbor may call the police at the sight of an intruder; one might petition the town to install a stop sign for safety. It really doesn’t matter which neighbor did which deed in consideration of the benefits to the street.
Such acknowledgements of individual skills, yet participation toward the work of a group, also appear in the Bible. Consider the passage in first Corinthians, Chapter 12 (King James Bible)
1 Now concerning spiritual gifts, brethren, I would not have you
ignorant.
2 Ye know that ye were Gentiles, carried away unto these dumb idols,
even as ye were led.
3 Wherefore I give you to understand, that no man speaking by the
Spirit of God calleth Jesus accursed: and that no man can say that
Jesus is the Lord, but by the Holy Ghost.
4 Now there are diversities of gifts, but the same Spirit.
5 And there are differences of administrations, but the same Lord.
6 And there are diversities of operations, but it is the same God which
worketh all in all.
7 But the manifestation of the Spirit is given to every man to profit
withal.
8 For to one is given by the Spirit the word of wisdom; to another the
word of knowledge by the same Spirit;
9 To another faith by the same Spirit; to another the gifts of healing
by the same Spirit;
10 To another the working of miracles; to another prophecy; to another
discerning of spirits; to another divers kinds of tongues; to another
the interpretation of tongues:
11 But all these worketh that one and the selfsame Spirit, dividing to
every man severally as he will.
12 For as the body is one, and hath many members, and all the
members of that one body, being many, are one body: so also is
Christ.
Don’t get caught up in the Christianity part, especially if you are not of the Christian faith. The understanding of the group is what is important. Everyone in the group is an individual with a variety of skills. When working on behalf of a joint mission, however, they become an indistinguishable member of the body. Like a drop of water in a river.
This is not the same as political socialism where a few at the top decide everyone is equal and push down resources in a fashion they deem equal. The starting point here is that everyone is blessed with differences, and can employ those differences and contribute them to a larger group. Once given, the reward is to each member equally. Just as each neighbor on the street benefits from living on a cleaner, safer street.
This is what I speculate Rev Bayes was trying to prove.
Walking is not only good exercise but is a way to touch nature. Ho Hum you say– but not so fast. Even on a well trodden path around Fish Lake Regional Park you can play the “identify the tree game.” Disclose your guess. Take a photo of the leaf. Then have google lens look it over, and “voila!” You have a winner.
The two on the left are the Norway Maple and below the Red Maple. In the middle, coming at the tips of wonderfully craggy branches, are the Red Oak and the Gambel Oak. And to the right top is the American Elm– really hard to find the elms as they were taken down by Dutch Elm Disease And below the White Poplar, which look to have canopies of coins jingling in the sky when the trees grow enormously tall.
Still not impressed? Nature shows us how to sort. How to see things that are similar and things that are slightly different. And then we have to give them names so we can talk about them. This is useful.
Then you can see how other things have properties in common, and see their differences. Take 1. Midwest men laid off after jobs went abroad, 2. Renters resisting gentrification 3. Proponents of environmental reviews. All three are (were) caught (fear being caught) out by the greater group accepting an exchange that will leave their situation worse off.
When America agreed to trade away manufacturing jobs, workers were left unemployed and unable to regroup. When a deteriorating neighborhood gleans the interests of redevelopment, those without the foothold of ownership face higher monthly expenses. When a mine in Northern Minnesota opens, the fear is that it will pollute and damage the environment.
In the first case the damage was done and the fallout was deemed to be larger than first anticipated. The thought was that workers would be able to adjust, take on new employment, and carry out their lives. Note to self: cash derived from private employment is only one aspect of a job, other social aspects include status, stage of life, relationship to others in family.
In the second case, renters are organizing to stop improvements and redevelopments in their area as they feel they will not benefit in any way. They feel that they will loose by either having to move to another area within their price range or face higher rents justified by the neighborhood improvements. Given the lack of understanding of the complete package of social implications and costs in 1., there must be a better calculation for the compensating factors for renters while still proceeding with neighborhood rejuvenation goals in 2.
Environmental reviews appear to have become a political way to slow down a project to the point where investors simply move on. The best way to discourage business– just keep requesting more stuff. If the community has standards, as all of them do, then enforce the standards and be done. It’s up to the business to take the risk. They will be the ones shutting down if they can’t.
All three scenarios involve transactions between public groups and private interests at multiple levels. Each scenario describes a little piece of a very large system. The conflicts and aggravating conversations around such issues stem in part from a lack of enumeration of the various tradeoffs at play. Striving for a proper sorting of what is public and what is private will contribute to being able to count it all out.
I think people would agree that humor is difficult to translate. If you find yourself outside your native tongue, there a chance that more than once you’ve looked blankly around a table of laughing smiles wondering what you missed. “Ah– you must understand the politics,” one French house mother told me as I looked to her for answers. Or at least you must understand the inside joke at hand.
At a basic level, comedy provokes a laugh even when the trip-and-fall is predictable, or the bonk on the head likely. But anything more sophisticated pulls the audience onto an inside turn on a speedway, straining the limit between jest and tastelessness. Comedy depends on a dupe. And this can only be alluded in order to preserve decorum.
That’s how inside jokes develop by profession. If you are a nurse anesthetist, for example, there are bound to be comical events to be shared amongst coworkers, without insensitivity intended. But when is the boundary crossed and who should have access to the ditties that are sung at the end of a tough day’s work?
I’ve always admired people with a good sense of humor. Ones who can tease out a good laugh from an audience without going too far. Maybe in part because humor is still a mystery to me. Maybe because a belly laugh does everyone a bit of good.
With political correctness taking so many topics off the table, laughter is being squelched into small, tight groups. Just when I think we all deserve a little time to be light-hearted.
Human perception, as well as the “perception” of so-called intelligent machines, is based on the ability to recognize the same structure in different guises. It is the faculty for discerning, in different objects, the same relationships between their parts.
A Book of Abstract Algebra
The dictionary tells us that two things are “isomorphic” if they have the same structure. The notion of isomorphism of having the same structure is central to every branch of mathematics and permeates all of abstract reasoning. It is an expression of the simple fact that objects may be different in substance but identical in form.
The image of platters is useful in visualizing where the economic implications of culture plays out within groups. The exchanges, trades, evaluations of mission-minded individuals transpire on platters, whether it is in the support of a university, a corporation, a hobby, or a tight knit community.
In a recent conversation, we speculated about how remote work will inhibit culture. When professors no longer reside in the same small town as their college, the social activities of years gone by will never materialize. When judges no longer have offices in the same building, they can no longer stroll down the hall and run a scenario past a colleague. If corporate employees only engage over zoom there are no casual exchanges post meetings to develop an ease of interaction.
These are examples of how physical distance renders exchanges of ideas and resources difficult. Trade is muted as the agora, the platter, evaporates on the electronic mechanisms.
In contrast, there are situations where platters are nested, and the appropriate level of control is opaque. Authority at the local level is generally preferred. At some point, however, the effects of parochial rules can create negative outcomes for the larger platter. Zoning, for example, can restricts housing to the point of increasing housing costs regionally. Than there is an argument for the rules to be made over a larger platter. If public safety of a city gets to the point that places of shared institutions such as universities, convention centers and so on are experiencing extraordinary crime, than impositions of safety measures by the greater group seem justified.
The mission morphs to various compositions of platters depending on the demands to meet the mission. And then, when demand subsides, the dynamics relinquishes trade and interaction back down to the most basic level.
When I picked up Steinbeck’s In Dubious Battle it was to ensure a certain caliber of writing. Only good luck would have it that farm workers, activists and landowners struggling over resources was the subject matter. Steinbeck sets up the social and economic dynamics of which I speak. Now I’m only a couple dozen pages into The Winter of our Discontent (1961), and I’m realizing that this is his thing. Take this passage where the protagonist Ethan is trying to describe to the Mr. Baker, the banker, his frame of reference around investing his wife’s money.
Ethan started an angry retort- Course you don’t under stand; you’ve never had it-and then he swept a small circle of gum wrappers and cigarette butts into a pyramid and moved the pyramid toward the gutter. “Men don’t get knocked out, or I mean they can fight back against big things. What kills them is erosion; they get nudged into failure. They get slowly scared. I’m scared. Long Island Lighting Company might turn off the lights. My wife needs clothes. My children-shoes and fun. And suppose they can’t get an education? And the monthly bills and the doctor and teeth and a tonsillectomy, and beyond that suppose I get sick and can’t sweep this goddam sidewalk? Course you don’t understand. It’s slow. It rots out your guts. I can’t think beyond next month’s payment on the refrigerator. I hate my job and I’m scared I’ll lose it. How could you understand that?”
“How about Mary’s mother?”
“I told you. She sits on it. She’ll die sitting on it.”“I didn’t know. I thought Mary came from a poor family. But I know when you’re sick you need medicine or maybe an operation or maybe a shock. Our people were daring men. You know it. They didn’t let themselves get nibbled to death. And now times are changing. There are opportunities our ancestors never dreamed of. And they’re being picked up by foreigners. Foreigners are taking us over. Wake up Ethan “
The banker is trying to talk Ethan into being a risk taker, an investor. Ethan doesn’t have the stomach for it anymore. He lost ownership of the family grocery store, and it was more than a pecuniary loss. He lost social standing, he lost piece of mind, he lost dreams of his children’s future, and most dear to him, he feels he has lost his wife’s admiration. The slow process of exchanges that led to his financial demise was ‘the erosion’ that killed his spirit.
As history will have it, this played out during the more recent great recession, when everyday people were taken up short by the reality that they were going to loose their house through foreclosure. The evidence was there for anyone showing foreclosed properties to witness.
For the most part bank owned homes are in rough shape. An extended period of tough financial times results in missing cabinet hardware, water stains where a leak was left to drip, flooring worn right through to the subfloor. Foreclosures were a mixed bag in 2010. Frequently the properties were neat as a pin. Vacuum marks still tracked in the carpet. Appliances were clean and left intact. Sellers maintained pride in their home until they had to leave the keys on the counter and lock the door behind them.
But the strain of the situation, the erosion of spirit, kept people out of homeownership well past the three to five year waiting period as required by credit considerations. It’s a pretty safe bet that not only were their ambitions of ownership curtailed but also those of their siblings and people in their close circles. People who supported them emotionally through the process. The homeownership rate for Millennials is only 43%, well below any other cohort. And I don’t believe it is all about student debt.
But back to The Winter of our Discontent. The banker wants an investor and looks first to a man who comes from a family with experience. He makes an assumption that his best candidate comes from the pool of past business buddies. I’ll have to keep reading to find out how it all shakes out for Ethan and Mr. Baker.
But what I think we should take away from all this is that the emotional draw or drawback from participating in transactions whether for a house, or a police force or a business venture is much more dear and lingering than we acknowledge. And it cannot be ignored. The compensating factors to pull people back into those markets are perhaps partly pecuniary, but mostly something else. The need for a new entrepreneurial spirit may be harder to incentivize in the old pool and easier to energize in a new one.
What we need is to be better accountants of all the social implications of our pecuniary endeavors.
My love affair with the internet has been uneven. First there was the amazement at reconnecting with childhood friends long left behind at destinations around the world. Then there was the aggravation at the dismantling of established business norms which guided professional behavior. But then there is all the upside of discovery and learning and connecting with very specific groups of people.
The MN Gardeners is one such group. The postings here will inevitably make my day.
The concerns about inequality have been out there for several decades now, and I still don’t get it. Global markets were blown wide open through technology and timing. Those first to market have reaped incredible sums. But there are historic precedents to such things. If anything I think it is very favorable that this wealth is generated 80% of the time from work and not investments.
As Raghuram Rajan points out in chapter six of The Third Pillar (Page 188)
The increase in top incomes is not because countries are dominated by the idle rich. Even for the richest 0.01 percent of Americans toward the end of the twentieth century, 80 percent of income consisted of wages and income from self-owned businesses, while only 20 percent consisted of income from financial investments. (35. Piketty and Saez, “Income Inequality”) This is in stark contrast to the pattern in the early part of the twentieth century when the richest got most of their income from property. The rich are now more likely to be the working self-made rich rather than the idle inheriting rich.
The wealth is the result of people producing stuff that other people want. This is a good thing that we want more of. Tremendous financial incentives are the fuel to get the motors running, to get people to take a risk and go all in on a business idea. These aren’t people who just tumbled into a fluke situation, their firms also run more efficiently then their competitors.
The majority of top earners receive business income, and tend to be owners of single-establishment, skill intensive, midsized firms in areas like law, consulting, dentistry, or medicine. These firms tend to be twice as profitable per worker than other similar firms, and the rise in incomes appears to be driven by greater profitability rather than an increase in scale. The study finds owners typically are at an age where they take active part in the business. The premature death of an owner cuts substantially into profitability, suggesting their skills are critical to income generation. The authors conclude the working rich remain central to rising top incomes even today. (Piketty, Capital)
The private market is supposed to be propelled by private incentives.
This is not how the public market works, which is fueled by other incentives. And fortunately many of the individuals who happen into the windfalls of private wealth are susceptible to those incentives as well, and frequently fold their wealth back into society.
Fraud, or tricking people into thinking they are doing business in one market when they are really playing in the other is the culprit to root out. These are the people, or groups of people, who profess to work for the pubic while internalizing benefits; or the private enterprises who finesse their commercial power to press particular public objectives. It’s the cloaking, aggregating, and averaging, that can cause setbacks like the great recession.
The history lesson yesterday had me digging through my grandmother’s photo collection. Ethel with her straight blond hair is pointed out at the top with a pencil mark. She is clustered here with her classmates. I’m not seeing a lot of wealth or power, but rather a collection of homemade dresses and hand me down overalls.
I realize a lot of people wonder about bird watchers and what exactly they are up to. How can it be that interesting to catch a glimpse of an avian creature? So here are some things to consider.
Where’s Waldo has been in print for over thirty years delighting fans all over the world in finding the little man in red and white stripes. Birdwatching beats Waldo any day. First off, it can be done outside anytime, any season without any printed materials. And there are a lot more variations to look for than stripes of two colors.
Walking about in nature is pleasant in and of itself, but add to that the possibility of coming upon a devoted couple of Hooded Mergansers can make any day special. The elaborate head plumage on the drake is bright white even from across the pond. While the hen can barely be distinguished from her surroundings. Sometimes you only get a quick glance before a bird takes flight, so stand-out features are a definite plus.
Hunting is part of the fun. But the distinguishing is the real skill. You might only get a few seconds, half a minute to make some critical observations before the subject at hand flutters off to a higher limb or across the tall prairie grass. In that precious time your eyes need to take in the size, plumage markings, beak thickness and any other mannerisms that may help you with identification.
With experience, an observer can collect an impression and plop it between a range of sizes, colors and markings, then scroll the memory banks for the best possibility of what it it that flies ahead. But that’s where it gets tricky. Once out of view, the memory becomes foggy. Was it a gross beak? Was the cap black and a black bar across the wings? You learn to look for defining features.
Before you know it, your trained eye see the Flicker on the hallowed tree by the driveway, and the Orioles making their way up for the summer months, and the Crested King Fishers down by the water. Life is richer, more varied and better understood.
Now if I could only spot those darn owls.
It was a beautiful evening to enjoy this first game of spring sports over at the high school. I wasn’t raised in a sports family so for many years American’s obsession with football and baseball and basketball was a mystery to me, and even a little amusing.
As a young loan officer I worked mostly with men who each fancied their favorite sport. A very young Shaq O’Neil was scheduled to be at the Metrodome in the early ’90’s and the bunch of guys I worked with in downtown Minneapolis were excited to watch him practice. Their hearts’ pulsed visibly beneath their grey suit jackets.
Slowly I came to understand that many of them knew the histories of the final four teams; they knew statistics and coachs; they had a long term relationship with the sport. Watching the game is just one of many facets of being a sport’s fan.
In the spring, when the warmer temps are just barely taking the edge off still dormant ground, I can’t wait to climb up the metal bleachers to take in a game. It took a lot of youth sports to teach me the rules, and to understand the plays, but I have gradually grown into fan stature. Actually both my husband and I have.
Come to find out, sports are more fun to consume with someone else. When the Twins won the World Series in ’86 it was easy to jump on board as a fair weather fan and bask in the ticker tape parade through Minneapolis. But sitting on a couch comparing memories of past plays or relishing the last 90 minutes of a toe-to-toe basketball game, is also more enjoyable with a buddy.
A sport’s audience is bound in a communal relationship. People from all parts of a city can strike up a conversation with a simple, “How about them T-Wolves?” There aren’t many ways strangers can break through the social dampeners that keep people on their platter. Sports provides that venue.
A few days ago I wrote an interpretation of a notion using an analogy to juggling plates. On the cover of Raghuran Rajan’s book, The Third Pillar, a disc is supported by three pillars. Think of these platters as holding political/economic ecosystems. The people on the plates are there voluntarily. But the more layers of plates, the easier it is to jump between them. If there is one plate up in the clouds and a bunch of plates jiggling away down by the parkay flooring, then people can only jump sideways, not upward.
On the cover of Raghuran Rajan’s book, The Third Pillar, a disc is supported by three pillars. Think of these platters as holding a political/economic ecosystem. The people on the plates are there voluntarily. But the more layers of plates, the easier it is to jump between them.
With this structure in mind, it is easier to see how societal systems require competent political figures at all levels, in turn providing greater freedom of movement between the platters. (And if you should imply from this mental drawing that those closer to the ground are somehow simpletons, you are not in my portrait, yet. Many people choose a simple rural life, for instance, regardless of their intellectual makeup)
There is, however, a natural nesting of authority, as all the plates are spinning in the same environment. So when decisions are made of an overarching nature, they come from the upper platters. A neighborhood does fine sorting out it’s dog park and garbage collection, but needs a city to set up sewers and water service. Then the county takes over with the county roads and the state with the freeways. What if there were no levels of government between caring for your own driveway and the interstate?
Here’s an example given by Raghuram Rajan in The Third Pillar.
Therefore, for example, they want him to procure a birth certificate for their child, who was delivered in their shack in a village far away from any medical clinic. The birth certificate is essential for the child to be admitted to the free government school, and no government officer will provide it with out suitable gratification, because he has no official document to rely on. The poor do not have the money to bribe so they plead for a call from the MP’s office, which will set the wheels of bureaucracy rolling. Once the child is in the local school, the child becomes the MP’s responsibility. When she gradu ates from high school, the MP has to find a college that will admit the student if her grades are modest, and when she gets a degree, he has to persuade some government office to give her a respectable secure job. And when she gets married, he will be invited to the wedding and be expected to give a suit able gift.
In a society where the typical government civil servant is neither civil nor a servant to the poor, the MP is the intermediary who will help the poor navigate the treacherous world. While the poor do not have the money to “purchase” public services that are their right, they have a vote that the politician wants. The politician does what he can to make life a little more tolerable for his poor constituents-a land right enforced here, subsidized medical services honored there. For this, he gets the gratitude of his voters, and more important, their vote. Tied to their MP via patronage, they do not really care about how the MP will vote on the bigger issues of the day, whether he supports tax-evading liquor barons, illegal miners, or industrial polluters, so long as these do not intrude directly in their already-hard lives.
The missing plates between the poor in this story and the MP causes a couple of errors in the system. Those who should be receiving support through a combination of reciprocal work and engagement have nothing to offer the person in authority but an unconditional vote. The vote contains no value in evaluating the higher level issues which do not effect their lives.
If the vote was going to an intermediary plate authority, one who could actually trade in meaningful services for the poor, social exchanges would be tested and evaluated and remediated through the system. A successful local politician, say at the city council level could become a candidate for state or county level responsibility. The omission of mid-tier ecosystems eliminates that possibility, allowing for private actors to step in and capture the needs at those levels, in fraudulent manners.
The national conversation around inequality is grounded in measuring an individual’s income or wealth. I question if this is really the way we want to sort the players in order to get down to the nuts and bolts of our concerns.
Many of those in the one percent are recent superstars: ball players, rock stars, blockbuster actors. None of the ones who come to mind are set to receive an inheritance. Derek Jeters of NY Yankees fame, qualifies as a one percenter with a reported $5 mil/year salary. His parents are not from the super rich stratosphere, nor are quarterback Russell Wilson’s (35 mil/yr), nor Serena Williams’ (78 mil/yr).
The purpose of a free and open society is for folks to be able to move between social and financial groups. If the majority of the one percenters are the first in their families to enter this income bracket, that is a win for the country not a loss.
There are plenty of examples outside of sports franchises and Hollywood too. Many of the tech giants don’t come from substantial wealth. Bill Gates, Mark Zuckerberg, Elon Musk all come from professional parents, but seemingly not one percenters. And Oprah (315 mil/yr) isn’t the only self-made woman that came from a modest background. There are plenty of self-made rich women in the US.
It is true that the wealthiest women in the US are beneficiaries of family fortunes. “Eight out of the 10 richest women in America are descendants or widows of the founders of some of the biggest companies in the country – from Walmart to Apple to Mars candy.” And I’m sure there are one percenters of the male persuasion who have lived a life of financial opulence.
It seems to me, however, that it is uncommon for family wealth to make it much past the second generation. Entrenched wealth is what we find objectional. Movement of people between the income brackets is desirable. It is the way connectors can move between groups and link resources to talent.
So I suggest we talk in terms of coupling parents and children. The greater difference between their life’s circumstance the healthier the environment. Taken together, as a grouping, and then ranked, will give a better snapshot of how income is stacking up across the country.
I realize there are already inter-generational studies of income, but these focus on upward mobility. These are concerned with lifting people out of poverty. While this is one aspect to consider, moving people up from low income to higher income bracket, I consider the reverse to be of equal importance.
Children of parents with financial means are best able to be entrepreneurs as there is greater financial security in their backgrounds. Friends and family usually fund the first round of investment in a start-up. Children of parents with means can afford to tinker in a garage, be creative, invent something new.
So as important as it is to couple generations for upward mobility, it is also important to see whether those with means are helping the next generation invest their work in progress and the arts. For all these reasons I thinking sorting bi-generationally reveals more insights into the financial status of our communities.
There’s a new paper, Lessons from Denmark about Inequality and Social Mobility, by James J Heckman and Rasmus Landerso. Here’s the abstract:
Many American policy analysts point to Denmark as a model welfare state with low levels of
income inequality and high levels of income mobility across generations. It has in place many
social policies now advocated for adoption in the U.S. Despite generous Danish social policies,
family influence on important child outcomes in Denmark is about as strong as it is in the United
States. More advantaged families are better able to access, utilize, and influence universally
available programs. Purposive sorting by levels of family advantage create neighborhood effects.
Powerful forces not easily mitigated by Danish-style welfare state programs operate in both
countries
What I find interesting is the framing of their analysis around neighborhoods. They find that even though teachers in Denmark are paid the same salaries, there are still different outcomes for children which appear to be a result of families sorting themselves by neighborhood.
One good example of this phenomenon is the quality of schoolteachers by clusters of parental
characteristics. In Denmark, teacher salaries by neighborhood are mandated to be equal. That is
a force for uniform quality of schools across neighborhoods. However, uniform quality is not the
actual outcome in Denmark.
The sorting continues down through to the teachers.
There is a strong positive association between the characteristics of parents, on the one hand, and the characteristics of teachers on the other, despite equality in wages.
Even with an equalization of monetary compensation to the educators, the more established families gain the preferred access to education. And thus equal opportunity to education is not being realized.
But is this one of those everything-should-be-equal that makes sense or is counter productive? Are the measures and classifications and groupings done in a way that divvies up into a state of balance?
I don’t think it is a controversial notion that those on the lower rung of academic performance are more likely to be motivated by seeing themselves in their teachers and mentors. And until those teachers and mentors are brought along into this higher level of academic delivery, the system that looks for those mentors will have unbalanced delivery systems. By choice. And this may very well be the best delivery for that moment in time.
Here is a scenario where fine tuning and focusing in on what is thought to be an issue of equality maybe sabotaging the path for greatest progress. By drilling down to the tier of the individual, one dismisses the group. To bring along the child can only be done by bringing along their larger group, including their parents and teachers.
One of the good things that has come out of the pandemic is the speedy development of vaccines. Nothing like a threat to all of humanity to bring people together and achieve medical milestones! But short of alien invasions or another plague, what are more temperate ways to promote progress? This, it turns out, is a hard question.
I find it much easier to point out what stops progress than what ignites it. Three culprits come to mind: desire for power, inability to curb jealousy and gatekeeping (which I guess is the result of the first two human conditions). It’s no wonder successful start-ups are dubbed unicorns as the circumstances which spin out to swirl them into explosive growth are rare and magical. Any one of many fateful decisions could lead the whole project down the wrong road.
Some time ago I heard a story about one such decision made at the infancy of a present day multinational. The founder needed a place to build stuff. This was up in northern Minnesota where the land bares little more than hay and potatoes. The founder approached a local guy who had a bunch of large sheds sitting empty. He had no money, but he went to the owner and asked is he could lease the space and pay with stock certificates from his soon-to-be company.
The local guy didn’t know what to think of such a proposition. How was he to evaluate this guy from the cities and whatever it was that he would be putting together in his buildings? It wasn’t like people were banging down his door to pay him rent, but he didn’t want to play the fool (nobody wants to play the fool) either. He knew a successful real estate guy from the cities. He had done some work for him planting a nice row of Colorado Blue Spruces as a border along the drive into his lake home.
So here’s the connector part. A connector person is one who can bridge various otherwise isolated communities. The relationship is strong enough that the parties at hand trust each other and value the information being shared. Up north guy knew enough about the real estate guy: he was a college athlete, his business was successful, he was reliable. He had interacted with him enough to know he was on the up and up.
So when real estate guy leaned in and said, “Really, what do you have to loose?” Up north guy unlocked the sheds and widgets started to tumble out.
Real estate people tend to be optimistic, but what if up north guy had turn to a pessimist for advice. Instead of a ‘what have you got to loose’ response, he got a ‘those city folks are always out to take us for a ride’ response. What if there had been no one to turn to to figure out if this was a con or the real deal? What if there was a person nearby, but he was all caught up in social stature making him unapproachable?
The solution that won’t necessarily ignite progress, but would certainly set up an environment of greater potential, is the advancement of activities which encourage the mixing of people from different backgrounds, skills, and social groups.
As you probably predicted, the stock made up north guy far wealthier than the majority of other residents in the county. More than half a century later his descendants are still flush from a decision to rent or not to rent. All because he trusted sound advice and didn’t get caught up in a power play.
I didn’t know jury trials were an American thing. According to Jury | Britannica 90 percent of jury trials occur in the US. A defendant who faces a penalty in excess of a six month imprisonment has a constitutional right to have their case judged by a jury of their peers.
It seems when their are tough decisions to make, we prefer to defer to a group. A jury is interesting as their deliberations are done privately, no outside judging, no transparency. There’s an anonymity to a group. The group has to come together behind a decision and stand by it in front of the court.
This is a service done without compensation, a civic duty. Granted, many will sabotage their opportunity to sit in the jury box. Reading through this coverage of jury selection in the Derek Chauvin case provides plenty of examples. And then there are those like #52 who is compelled to participate in an historic court case.
It takes all types of people with all types of talents to round out a group.
Reporting from the Hennepin County Court house:
Chauvin’s attorney says the Court should consider: giving the defense extra strikes, delaying the trial, moving the trial outside Hennepin County, bringing back the seated jurors to ask them what they’ve heard, or immediately sequestering all the jurors.
“We’ve got a mayor who is a lawyer by trade, he should know better,” defense says of Jacob Frey. Judge Cahill: “I wish City officials would stop talking about this case.” May bring back seated jurors to inquire, motion to delay trial taken under advisement—nothing decided yet.
The first prospective juror of the day right away discloses she heard about the $27m George Floyd family civil lawsuit settlement on the radio. “When I heard it I almost gasped at the amount,” she says. She doesn’t think she can be impartial, and has been excused.
Prospective juror #52 says he doesn’t think Chauvin intended to harm anyone, but he wonders why the other officers didn’t intervene and stop him. Supports BLM. “This is the most historic case of my lifetime and I would love to be a part of it,” he says. He’s on the jury.
Prospective juror #54 in the #ChauvinTrial is 75 years old and describes being “appalled” by the video. “To exert that kind of force for that long just seemed out of line to me,” he says. After expressing doubt over whether he can be impartial, the judge excuses him.
Originally tweeted by Tony Webster (@webster) on March 15, 2021.
There’s an excellent bakery in a little strip mall down the interstate from where I live. The jumbo donut holes melt in your mouth. I’m not sure if it is the glaze on the golden globes, but the texture and flavor and softness is memorable. The store front is small. A twelve foot display counter full of long johns, and bear claws and jelly donuts (my husbands favorite) reveals the day’s offering as you walk through the door.
A middle aged guy runs the place and when he plans the baking for the next day, I’ll bet he’s trying for that ultimate mix of filling the expectations of the steady stream of regulars who filter in, yet not having any pastries left at 11 am when he flips the ‘closed’ sign on the glass door and locks up.
The point is that nothing really bad happens if he doesn’t get it quite right. He might have to take a dozen treats home or give them to the food shelf. Or he may have lost out on some sales if he was too conservative and didn’t bake enough. A few dollars either way, but no one dies because he miscounted his jumbo cinnamon rolls.
That’s why bakery goods are an ideal private good. Their production and consumption are individualized. Everyone can have their favorite. Products that tend to be well suited to public good, by contrast, usually involve groups, either because they service groups, like infrastructure, or because they require a group consensus on their production, like education standards.
To further complicate things, group opinions vary by region and demographic. In order to accommodate these features, the fine tuning of say the reopening of schools, is pushed all the way down to the school district level. The standard for how a community agrees to educate their K12 population during a pandemic is placed into, let’s call it, a first tier group. Not the county, or the state, or the region, or the country.
Unlike the provision of apple strudels, errors involving health and safety can result in physical harm. There’s more at stake than a few bills in a till. And there is often no unique measure to dictate exactly how to proceed—which is exactly why it’s been delegated to a public good. How safe is safe enough; how much school is school enough; how much protection is protection enough? And as a group we are both anonymous and participatory in the decision process.
And as this is a big messy political endeavor, it is much more difficult to ascertain whether errors of commissions, or errors of omissions occur in taking a run at the most efficient social outcome.
Many free market economists are criticized for placing excessive weight on incentives. A couple of examples come to mind. If an actor finds a wallet with $1000, do they keep the money or try to return the wallet? The utility maximizing objective suggests keeping the money. Perhaps true if the actor is an individual devoid of human contact. The keeping the money answer omits that the actor is part of a community, and has an interest in promoting and participating in a group which returns lost items. Some people would call this morality. I see it as practical. The group incentive encourages action which retains capital within the community in the form of future gestures of similar goodwill.
Another example given is the story of the drowning child. Saving the child would result in the loss of an expensive suit. Does utility maximization deter the actor from saving the child? The answer that the actor bypasses the impulse to save his suit, and saves the child in order to be a better, or noble, person is an individualistic way to look at it. But what about the practicality of being the one in the group who is available for a just-in-time activity, who sets a precedent for the next person to carry out similar duties when the need arises. An insurance towards future savings of life. This seems like a a reasonable justification for the behavior. One that is also in sync with responding to incentives, group incentives that is.
But where do we see the $1000 or the reimbursement for the expensive suit? Where do we see the money? Where do we see the returns for the work of stay at home moms or senior volunteers? Where are the lifetime earnings of (est) $1mil-$2mil that a family foregoes when one partner works in the community? Are they suckers? Is it just fairy dust? I think not. But it will take me a bit to prove it to you.
A recent report by LendingTree analyzed mortgage requests and offers in 2020 for borrowers across the 50 largest metros. The report ranked the metros by the percentage of total purchase mortgage requests received. The report found that millennials made up at least 50% of purchase mortgage requests in most metros.
#1: San Jose
Share of mortgage requests: 61.8%
Average down payment: $158,040
Average requested loan amount: $704,318
#2: Boston
Share of mortgage requests: 59.1%
Average down payment: $78,062
Average requested loan amount: $416,267
#3: Denver
Share of mortgage requests: 59.1%
Average down payment: $56,937
Average requested loan amount: $354,433
#4: Minneapolis
Share of mortgage requests: 58.8%
Average down payment: $38,833
Average requested loan amount: $252,163
The drum beating earlier in the week about cancelling student loan debt was abruptly muffled by the president. In response to Chuck Schumer (D-N.Y.) and Elizabeth Warren’s (D-Mass) proposal to forgive up to $50,000 in student loans:
“I will not make that happen,” Biden said when asked at a Milwaukee town hall hosted by CNN Tuesday night if he would take executive action on loan forgiveness beyond the $10,000 his administration has already proposed.
Biden Balks At $50,000 Student Loan Debt Forgiveness Proposal | HuffPost
Some people think student loan forgiveness falls into a moral category. Society has an obligation to advance citizens through education; that college is an extension of the k-12 necessity to set a youth up for a productive life. The debt should be waived on principle. Of course this gets a little messy post grade twelve, as vocational choices, and the education they require, vary tremendously. And for this reason I think free college will always be a non-starter.
But why waste good numbers when they are out there for consumption? The debt figures can be, and should be, put to good use. When aggregated up to the federal level they loose some nuance. But at the local level it maybe possible pull some levers and leverage a few social objectives at a time. The results maybe more interesting than a simple money transfer.
Case 1. Say there were two objectives on the table: student loan debt and career advancement. One would look for organizations at this intersection. There are hundreds of business associations in Minnesota. Local Chambers of Commerce might be first to mind, but there is the Iron Mining Association or the Minnesota’s Corn Growers Association or even local PTA’s. Say an association was given access to a pool of federal funds marked for student debt relief, with a catch. There is a trade involved. Once the Mining association, or corn growers, show proof of employment of a new-to-the-profession worker (for at least x-amount of time), then they can allocate relief to the student they deem eligible.
It’s a community grant (given to an individual) in exchange for making an effort to lift a worker up and into a new stage of professional development. Many of these associations have a history of giving out scholarships, and a process in place for evaluation. They are well regarded in their communities and have a reputation to protect in the administration of debt forgiveness.
The relief recipient advances economically from the removal of the debt. The business community can justify the extra work or training necessary to bring an inexperienced employee into their field. The new employee hopefully evolves to see the rewards of elevated employment and not just feel the demands of the additional expectations in a challenging position. All those who step outside their norms to make this happen find comradery with others not like themselves.
Case 2. Here’s another example. Say an elementary school attendance area is experiencing a sharp downward trend in enrollment–and the demographics confirm the trend to be long term. The risk of school closure is high. Closing a building is not only expensive for a school district, but the loss to a neighborhood can be devastating. Short term it brings angst to the families who now send their young children to a building out of the neighborhood. Long-term it can be difficult to reverse the negative impact from the closure.
Say the federal government allocated a pool of student debt relief money to the elementary school’s attendance area. Now imagine that there is a household with young children who would qualify to purchase a home in the area if a portion of student loan debt was forgiven. The local PTA in conjunction with a local mortgage bankers’ association could be in charge of distribution. This scenario leverages three objectives: debt relief, school support and housing.
Local control over distribution of funds could refine distribution in a way which engages incentives to accomplish other objectives within communities.
The NFT’s (non-fungible tokens) are making news in the art world as auction house “Christie’s Will Become the First Auction House to Offer Non-Fungible Token Art.”
Last December, an artist who goes by the name “Beeple” made headlines when he set a new record for the most valuable artwork auctioned off Nifty Gateway, a marketplace for limited-edition digital items. Beeple sold 20 artworks for a total of over $3.5 million, catching the attention of those who might not previously have known about the existence of NFTs, or Non-Fungible Tokens. While just a few years ago blockchain-based art might have been considered niche, a recent development proves this is no longer the case: on Tuesday, Christie’s announced an upcoming auction featuring thousands of images created by Beeple that have been compiled into a single composition.
The actual art looks very much like regular art. And are trading amongst buyers and sellers at a nice clip. Bitcoin.com reports that in a week last August there were 14,654 sales and $1.2 million in weekly trade volume. This piece by Trevor Jones commanded a nice price.
So what about the NFT- or the non-fungible token notation.
Crypto art relies on non-fungible tokens, or NFTs, which are usually issued with an Ethereum token, ERC-721. This ensures verifiable digital scarcity; each artwork is a uniquely distinguishable digital asset—no two are the same.
Crypto Art Sales on Ethereum Reach a Record $80 Million – Decrypt
At first glance it seems to be a certification of sorts, a blockchain version of an identifier to keep track of the art work’s provenance. An authentication certificate more than anything else. In the artworld the story of where a piece was produced and who has owned it since, is an integral part of preserving its authenticity. The token is attached to the piece and hence is non-fungible.
But something is missing from this conceptualization. Fungible has the quality of being able to be exchanged with other goods. The auction activity indicates a product that is very tradeable. Since these NFT’s are bought and sold freely, there seems to be a contradiction. Zoup at non-fungible.com tackles some of the issues.
zoup: I had several passionate debates during Meetups around the definition of non-fungibility. And I must confess… most of these debates turned out to be sterile but, they helped me understand something important: the definition of non-fungibility is everything but obvious.
Zoup explains that bitcoins are fungible in the same way that nickels, dimes, quarters are easily exchanged. A precious coin, however, is something different. To a collector a nickel that was mistruck during production can have significant value. To a collector the deformed nickel is non-fungible. And it is in this way the non-fungible tokens make digit art unique. Hence zoup comes to this conclusion:
It is therefore the use value that defines the fungible or non-fungible character of the asset. And not its technical characteristics. The main use of an asset and the perception that one can have of it define fundamentally if the asset is fungible or not.
Why most definitions of “non-fungible” are incorrect. – NonFungible.com
It is here that I propose a clarification needs to be made. The quality of being fungible, by definition, indicates an attachment to a group, as it is the group which determines its use.
Let’s try to disprove the idea and see what happens. The mistruck nickel is non-fungible when held within the collector group, it is precious, it has a unique story. To a kid who wants a coke on a hot day, the nickel is simply five pennies towards his purchase. He pops the coins into the slot on the side of the machine without another thought. He is using the coin as a fungible asset.
The quality of non-fungibility is attached to transactions that exist within groups. NFT’s find value in the crypt-investors sphere, but I doubt you would find much interest at the local VFW. Outside of this very specific group of people who understand the crypto space, the value goes to zero. I’ve written about fungible versus non-fungible transactions. I claim that when non-fungible assets are held within a group, they are a public good. All investors share equally in the assurance that the tokens represent a unique asset.
When a group assigns a use to an object- a park bench, for example, is open to the public in a park- then the bench is a non-fungible asset (it can’t be rented out or traded by any one individual) that is held by the group. When the crypto people decide to use tokens as identifiers, they’ve created a certification process that legitimizes an artwork by the community. And that is non-fungible.
I’ve said it before. It’s all about the group.
Around 4pm this afternoon the temp in the Twin Cities creeped above zero ending a 95 hour streak of negative highs and lows. As far as I know there have been no deaths during this polar vortex. But down I35 W, past Iowa, Missouri, Kansas and Oklahoma, a tragic 133 vehicle pile up left 65 hospitalized and 6 dead in Texas. The winter weather conditions coated the interstate with glare ice jackknifing semis across the thoroughfare. Approaching cars helplessly collided into each other as they skated into the metal mangled mess.
Around the same time last week, in Minnesota, a “bridge appeared to be ice-covered when the driver crashed and nearly went over the edge…”Take a look at the video where bystanders stopped a pickup from teetering over a bridge rail into the Minnesota River. When it comes to winter weather, Minnesotans have high state capacity. As a group we have the extra skills and initiative to respond to unexpected winter weather challenges.
It’s not that the people down in the Lone Star State are hick, uneducated or inept. It’s not that they’re too poor to be responsible nor too rich so as think they’re above it all. It’s not that they are too stupid or too smart. Capacity is a combination of knowing what to do, and being able to engage when the need arises. It’s an identification process, a communication process and a step-up-if-you-are-there-and-available process.
The group has to have the expertise to distinguish the glean on the pavement as black ice, and not innocent damp asphalt. A network has strength to communicate the concern when it is reliable and trusted. Parents put in the extra ‘no’ with persistent teenagers who want to go meet their friends, errands are put off. Stories of cars sliding into holding ponds and drivers waiting through the night, half submerged, until someone comes to the rescue, are retold to confirm the nature of the situation. All these activities enforce behavioral sacrifices which lead to successful outcomes.
Our cities are well rehearsed to handle the weather, whereas the Texas Department of Transportation lacks the physical equipment to plow off the half a foot of snow from the roadways. Formal government and its preparedness are just one feature of the ability of a community to identify, communicate and respond to the challenges, or ambitions, at hand. But it’s really the coordination abilities of the whole group which delineates its capacity.
I think most people would agree that the agility with which high paid workers were able to transition to remote work with the aid of the internet was nothing short of astounding. Had it been tried without Covid, I’m sure it would have been as difficult as getting teachers back in the classrooms.
Tradespeople have also been able to keep working as their work is most often socially distanced and out of doors. Road crews, roofers, delivery workers are all busy. None of these jobs rely on a quiet space with a lap top.
It seems a natural fit to connect the low wage workers into this workforce.
Biden’s 1.9 trillion relief plan is a little too enormous for me to get my head around. The magnitude of federal numbers just makes my eyes blur over the page. There is no anchoring the size of these things to my everyday life.
But if I can’t talk about magnitude, I can talk about structure. The goal of the bill is to engage the US economy as well as shore up people’s unexpected and uncontrolled loss of income; to keep their lives right side instead of upside down (which subsequently causes an economic drag on their greater groups). And then to get them back to employment where income can be feathered back in to the economic apparatus.
I’m all in favor of transfers for the first part. They work efficiently.
But I think there is a missed opportunity in the second part. Engaging idle labor from folks who are not destitute nor in need of transfers is low hanging fruit. As explained in this post about The Crafter The Contributor and The Covid Tracker, there are high skilled individuals available to donate labor if they are enticed by the objective at hand.
There are successful national service programs like AmeriCorps and the National Guard. Would it be so hard to have a property repair civil service? Ask any builder about the shortage of construction workers. What about a write-off for plumbers and sheet-rockers and electricians who’d be willing to have an apprentice tag along to fix a faucet at the local homeless shelter, sheetrock in a storage room at the food shelf, or replace all the gym lights with LED fixtures at the community gym?
A money transfer won’t teach a trade, nor will it make a connection between a potential employer and up-coming employee.
Pioneer Press North Dakota had adopted a law, proposed by the state’s Industrial Commission that oversees oil, gas and mineral removal, that gave energy companies broad power to continue injecting salt water, an unwanted byproduct of their drilling, and added rights to pump carbon dioxide deep underground and leave it there for eternity. This is becoming important as the cheapest method of “carbon sequestration,” which is deemed vital to reducing greenhouse gas emissions.
The law was very favorable to companies wanting to inject. It stiffed owners of land overlying the areas that might be filled. This created strong opposition, and a landowners association challenged it.
North Dakota had made an environmental claim on the subterranean space, but the landowners, who felt shafted by the fracking boom, said not so fast. They wanted in on the deal that seemed to pad everyone else’s pockets. So who owns the ‘pore space’ and who gets to benefit from it economically?
In mid-January, a state judge amped up the controversy in a broad decision favoring the landowners. He struck down the whole law as violating both the North Dakota and U.S. constitutions. He ruled it was a “taking” of private property as banned by our Fifth Amendment.
One can speculate on the line of thinking the legislators in North Dakota may have been following. Since everyone would benefit from the purging of by-products into the depths of the earth, than the assignment of the use of pore space to the energy companies is fulfilling a traditional public good.
As I’ve said here many times before, I do not believe in natural public goods. And this is just another example. Although the act of burying the carbon dioxide has a positive environmental outcome for the citizens of North Dakota, it is the land and the rights attached to the land that are under discussion. The land is privately owned by the landowners.
My view is that what is pubic and what is private comes about through tradition and legislation and cultural norms. In this case the courts decided. As the author says, there will be more to follow regarding “pore space.”
Legal scholars will write scholarly papers and economists will construct mathematical models. There are precedents in water and oil laws going back decades, but compressed gases that should stay there for millenia differ enough to open new controversy and give topics to hundreds of grad students who need thesis topics. And the outcomes will affect all of us.
Matthew Yglesias writes in his newsletter yesterday:
Defunding the police is a bad idea that, wisely, the voters and political system have rejected.
But it was so thoroughly successful as a slogan that a situation has emerged online in which a willingness to embrace it is widely seen as the key sign of one’s commitment to taking complaints about police misconduct seriously.
The reality is just the opposite.
True statement: the reality is just the opposite. As crime has increased this year, the need for resources devoted to public safety has increased, not decreased. The Minneapolis City Council didn’t get the memo. They are working off another economic model as they continue to entertain agendas which weaken the ability of the mayor, the police chief (who is now on a short list for a job in California) as well as the police force to do their job. MPR reports on January 15th.
The Minneapolis City Council on Friday took steps — again — toward trying to get a proposal on the ballot this year that would allow the city to replace its Police Department with a new public safety agency.
Their model appears to motivated by the need to subdue an ever present and ever impounding anger. The anger at the memory of, for example, the sound of thick soled heavily polished black shoes across the high gloss middle school floors, the glint off the handcuffs, the roughness of the shove as the uniform twists a best friend’s arm around and behind his back, before the jangle down the halls as the officer and youth depart through the heavy wood doors, to the back seat of the squad car.
Anger still simmering some three decades on. Like a clip on auto replay. A disturbing removal of a 12-13-14 year old from their place of learning. I have no doubt that every activist who seeks to dismantle the police, relives (and perhaps fosters) a simmering wrath against an established societal structure or symbol thereof.
Regardless of whether the activist’s personal case-by-case experience has merit, the model they pursue and the action it initiates will not result in productive outcomes. It is a model that seeks to break apart established norms, as opposed to working with them.
Yglesias seems confident that the greater group (it’s all about the group) does not follow the logic of diverting police funding to social workers, despite the catchy slogan. And as the cost of not being able to travel freely around the city without concern of being car jacked, or jumped to make a Venmo transfer, the public’s sympathy for those wronged by past interactions with the police appears to be waning.
Yet there is still a concern about errant police, as there should be. The inability of police chiefs to dismiss the truly bad apples, as Ygelsias calls them, the acceptance by the profession to let them back in, to reinstate them, has outsiders thinking outside intervention is necessary. We are right to step in when the police can’t police themselves!
Perhaps it’s time to step back, (further back) to take in a new view, to change-up the framing. Let’s start with some basics. 1. Police officers are no more good, or bad, than the general population. 2. Nor are they any more good or bad at evaluating themselves and their performance. Good. We’ve established that we are dealing with basically a decent group of people who show up for work with the intentions of doing their jobs. Since the pay isn’t great, we have to assume there is also some sort of personal sense of honor in the position.
The dicey work police officers do is risky not only because the threat of physical violence is undoubtedly present, but also because they are stepping into some social interaction gone awry. When they are called to a domestic dispute, they have to assess the conditions which led to an escalation in a marriage. When they are called to a corner drug deal, their survival can depend on assessing the players on the street. The police are called into restore safety to a highly charged marketplace of social interaction.
So is it surprising that this basically decent group of people will always choose the perspective of one of their own in that assessment? Or that they band in support of each other to the bitter end? They endure criticism and penalties at the hands of their black sheep members, yet on the whole they hold fast. That is how untrusting they are of an outside world assessment of their workplace situations.
And I wouldn’t assume a lack of methods to get the bad apples out of the barrel. Sometimes opportunities present themselves, and as a group, they find a way. Certainly that is true in other groups. Could more opportunities be made available for the black sheep of the group to be pushed out? Most probably. But that is an internal matter.
To be honest, I’ve read a lot of lists of horrible things the police have done, but you rarely hear of these as a percentage over the whole group. Or as a percentage of all the work tasks they perform. The only way to gauge the group is to take their numbers in that identity. Pulling out the one completely unacceptable incident as a representation of the profession is measuring oranges to apples.
When you start with the assumption that the group as a whole is as decent as the rest of us, it’s hard to get to “they are all inhumane idiots who are abusive beyond control.”
Years ago someone gave me some advice when I was learning to downhill ski. “Fear,” he said, “makes you want to sit back on your heals. But this is exactly what you don’t want to do. Lean down the hill, keeping your weight centered over your feet. That’s the way to tackle the slope.” The police need to lean into policing where most of the violent crime has been occurring. Despite resistance and lack of cooperation, they need to get those cases solved. To make believers and reliable partners out of a population who needs their support.
After the first of the year, I wrapped up the novels I was reading and made a promiss to myself to be a little more selective. To only read high caliber writing. That’s how I came upon In Dubious Battle. I wasn’t aware of the buildup to an apple pickers’ strike until I was bending back the binding so the pages eased open in my hands. And strikes are turning out to be very good scenarios for expressions of the social economic side of the economy.
Take what Mac says here to Dr. Burton, who has been brought in to be on hand to mend any of the strikers who get caught up in a tussle. Mac’s trying to figure out why Burton keeps showing up when he doesn’t get paid, nor does he seem interested in the cause. In other words Mac can’t figure out the ambitions for what he refers to as ‘work’ when it falls neither in the private or public sphere.
“Yes, you. You’re not a Party man, but you work with all the time; you never get anything for it. I don’t know whether you believe in what we’re doing or not, you never say, you just work. I’ve been out with you be fore, and I’m not sure you believe in the cause at all.”
Dr. Burton laughed softly. “It would be hard to say. I could tell you some of the things I think; you might not like them. I’m pretty sure you wouldn’t like them.”
“Well, let’s hear them, anyway.”
“Well, you say I don’t believe in the cause. That’s like not believing in the moon. There ‘ve been communes be fore, and there will be again. But you people have an idea that if you can establish the thing, the job’ll be done. Nothing stops, Mac. If you were able to put an idea into effect tomorrow, it would start changing right away. Establish a commune, and the same gradual flux will continue.”
“Then you don’t think the cause is good?”
Burton sighed. “You see? We’re going to pile up on that old rock again. That’s why I don’t like to talk very often. Listen to me, Mac. My senses aren’t above reproach, but they’re all I have. I want to see the whole picture as nearly as I can. I don’t want to put on the blinders of ‘good’ and ‘bad,’ and limit my vision. If I used the term ‘good’ on a thing I’d lose my license to inspect it, because there might be bad in it. Don’t you see? I want to be able to look at the whole thing.”
Burton turns out to be a bit of a philosopher. He’s there putting in the work so he can understand the why of it all. He and I agree the flux will continue. That the whole pricing mechanism is always in motion, and for that reason time must be understood. He also is indifferent to the ‘good’ of it. He isn’t going to shuffle through the risks versus the rewards, he is there trying to understand the beams that turn the wheel and the flow of the water that pushes on the buckets.
In the following few pages Dr. Burton talks about group-men. “I watch these group-men, for they seem to me to be a new individual, not at all like a single man. A man in a group isn’t himself at all: he’s a cell in an organism that isn’t like him any more than the cells in your body are like you. I want to watch the group, and see what it’s like.”
I’m looking forward to reading what else Burton observes.
I have been a fan of Walter Russell Mead’s Yule Tide Blog since back when he wrote at The American Interest (now the American Purpose). His annual recap of the Christmas Story has something to offer both steadfast Christians as well as those simply curious about the faith and what it entails. Today’s entry starts:
The Christmas story suggests that we can somehow try to be loyal members of our nations, our families, our tribes—and to reach out to the broader human community of which we are also a part.
Just because we all belong to groups, doesn’t preclude us from reaching out to others. In fact there is a desire to do so. Yet a tension arises.
It’s a puzzle. Human beings need roots in a particular culture and family, and those roots shape them; at the same time, human beings have values (like freedom and democracy) and ideas (like the Pythagorean theorem and the laws of thermodynamics) that demand to be recognized as universal. We seem perpetually torn between “cosmopolitan” and “local” values: universal ideas and the customs of the country.
Importantly, within the faith there an obligation to welcome and help strangers.
We think of the trade-off between local identities and universal values as a modern problem, but it is deeply rooted in human experience. In the ancient world, where tribal and family affiliations were very strong, many cultures shared a strong belief in the moral duty of hospitality to strangers, whatever their tribe. Day-to-day life revolved around your own group of close associates, but the duty of hospitality required a willingness to look beyond these limits to recognize the common humanity and worth of all people.
And this is hardly unique to Christianity. The tradition of hospitality runs throughout Islam. Read adventurer Dervla Murphy‘s account of her solo bicycle trip from Ireland to India in 1963, as detailed in Full Tilt.
Her dedication reads: “To the peoples of Afghanistan and Pakistan with gratitude for their hospitality for their principles and with affection for those who befriended me.”
You can be true to your tribe, true to your group within your group, and still reach outside that structure for all sorts of interactions. Not only can this be true, it is the best form of social commerce. And not everyone has to play. This show-stopper-outrage that has controlled our dialogue, the one that holds up the one offending example, sidesteps the reality that a few bad apples (racists, sexists or otherwise horrible people) don’t monopolize the ability for the rest of us to extend a hand where they won’t.
One doesn’t have to practice in a faith community to believe in the goodness of human nature.
Lots of great topics covered in this Econ Talk podcast with Katherine Levine Einstein. Russ Roberts and the assistant professor of Political Science at Boston University tackle the obstacles developers face in building higher density homes, as well as affordable housing units.
Katherine explains that the title of her new book, Neighborhood Defenders, comes from the notion that people who show up at city council meetings feel they are speaking on behalf of their neighborhood; they view themselves as representatives of that public.
So, first on the motivation side, the term NIMBY implies sort of a selfish motivation. It implies, Not In My Backyard, a very individually motivated view. And, in our research, we actually find that the folks who show up to oppose the construction of new housing often view themselves as representing their community’s interests and are motivated by protecting their neighborhood, their surroundings. Right? So, their motivations are not so individualistic.
The conversation flushes out the reality that people who have time to devote to the work of public affairs do not necessarily reflect the width and breath of the constituency. In fact there are noticeable groups missing from these planning and approval meetings. As Russ says:
So, talk about that tension between the idea behind saying ‘a public hearing.’ Wouldn’t you want a public–I mean: Let the public be heard. And yet it’s not really the public.
Groups are further delineated in the failure of the California legislature to approve SB 50 which would have streamlined the approval process for developers. It seems that the environmental folks found common ground with NIMBY’s.
So, one set of interests, which doesn’t surprise anyone, would be opposed to something like this is communities like Beverly Hills. Like, very privileged places with lots of white homeowners who are strongly opposed to the construction of new housing. So, those folks were like, ‘No, we do not want to have fourplexes all over the place here.’ So, they were a natural oppositional constituency.
But, other groups also came out in opposition. So, Sierra Club and a few other environmental groups were strongly opposed because they thought this would lead to the degredation of sort of existing green spaces.
And, that I think, and this is the oppositional group that was to me most interesting, is sort of left-leaning tenants’ rights organizations and some of the socialists organizations in California that are quite powerful, especially in Los Angeles and San Francisco.
Those groups worried that this up-zoning would actually lead to gentrification. If we think about areas in Los Angeles that are near transit stops, that many of those are less -privileged areas with larger Latin X or black populations. And, that those were places that might face development pressures, and, you know, the construction of new luxury housing, should zoning codes be relaxed.
And, so those really diverse constituencies all came together. Both times they killed SB-27 and they essentially killed SB-50 as well.
As they pull apart the thorny issues around community support for affordable housing, they not only talk groups, interests and work, but also how the public’s impact on timeframes have economic consequences.
Usually it would take like three to six months, I assume, to build a grocery store–I don’t know, maybe. But, for some reason it takes forever. And, of course the answer is, ‘They didn’t get the permit yet. They’re working on it.’ But, talk about–these things, some of them are ten years. And, after the 10 years, they get a building of four units down to three. But these are often 90 units of affordable housing were planned and they end up with, like, 40, ten years later.
In addition to these public sphere definitions and mechanics, they talk externalities and corruption. Well worth a listen!
One of the benefits of raising a child is that you get to follow them through their interests and endeavors. My college sophomore was required to tackle two novels for his class on colonialism: The Poor Man’s Son and God’s Bits of Wood. Feraoun is the product of French Algeria and Ousame is from Senegal, part of Afrique Occidental Francaise (AOF) until 1958. Both tell stories of the struggles of their countrymen and women during the era of New Imperialism.
Unlike the conversation of today, both authors describe many more groups than the simple division of colonial power and the colonized, of oppressor and oppressed, or of those who take what is not theirs and those who are left without. How exactly the goods, services and resources are shared and divided between all the players is a preoccupation for both men.
Details such as, 180 francs– the amount of Feraoun’s scholarship to Ecole Primere Superieure, and 100 francs–the amount he turns around and sends back to his family in Kabylia. Then there is 25 francs and a container of barley–the amount that shows his family’s extreme financial distress. And 600 francs–the amount the headmaster hands over to allow him to continue his education.
Both authors detail workplace struggles. Feraoun’s father leaves for a time to be a laborer in Paris. When a workplace accident lands him in the hospital he is able, after two attempts, to secure a settlement of $3000 francs along with a quarterly stipend. Ousame describes the 1947 railroad worker strike with specifics on pensions and wage scales and family benefits.
There is a counting amongst the women as well in the home life of the railroad workers. There is the rice that the local grocer is forbidden to sell them, and a fight with the french soldiers over a leg of mutton. Feraoun finds his financial obligations to his northern Algerian family growing as his sisters’ husbands leave them for greener pastures. He counts thirteen dependents on his teacher’s salary.
There are many groupings in these stories; there are the workers, and the women, and the missionary, and the soldiers, and the french educators, and the French who show up to help with the strike, and the elders who feel disregarded–all pulling in many different directions for people’s time, talent, and assets.
It’s as if these authors are trying to sort through two spheres of economic activity, particularly set in contrast by private affairs and public affairs, by looking after the individual and being obliged to the family, as well as by outsiders and insiders. And the good and the bad make an appearance in every cluster.
Without a doubt, the richness of these detailed accounts of choices is far more interesting than the conversations of today.
The November 2020 tally of Realtor members of the National Association of Realtors totaled 1,460,397, making it the largest trade association in the U.S. There are just shy of 21,500 Realtors in Minnesota alone. The group is nonpartisan with a stated “mission … to empower REALTORS® as they preserve, protect and advance the right to real property for all.”
Maintaining property rights, so that their clients can buy and sell homes and investments, is an unwavering shared value amongst this group. Not only because it facilitates their clients’ and in turn their own private interests, but also because stagnant unproductive real estate becomes a drain on public interests in the form of crime, blight, and inefficient use of public infrastructure.
The good and the bad of it is that once you build an open and reliable system, everyone wants to use it–including the criminals.
Globally, real estate is one of the “laundromats” of choice for criminals seeking to legitimize their ill-gotten funds. Using shell companies and other shady venues, they annually funnel more than $1.6 trillion into real estate investments around the world. Despite federal efforts to crack down on the illegal transactions in the United States, money launderers continue paying top-dollar for purchases, driving up real estate prices in many cities.
NAR and other housing groups are urging Congress to stem the tide of dirty money by passing effective anti-money-laundering legislation. The organization is also launching an education campaign to help Realtors® identify the risks to their businesses and use best practices to protect themselves against liability.
MN Realtor
More dollars chasing real estate means higher prices. Since a pricing system is dynamic and interdependent throughout an entire network, it means higher prices across the market, not just in apartment buildings or the venue of choice for foreign or domestic racketeers. So we could say that money launders are externalizing unaffordability to lower income homeowners, while internalizing the benefits of our property rights institution–including the work done by NAR and its members.
Wouldn’t it be interesting to know the tranche of the value that illegal activity adds to the price of a home, apartment or investment property? Even if it were only an estimate. Across a metropolitan area this maybe a small amount say half a percent, or around $1500 on the Twin Cities’ median priced home. Barely perceptible with all the other costs and expenses involved in a home.
But if the criminals did their business primarily in one neighborhood, (a neighborhood where people don’t have time to wonder why a property is left vacant, nor know where to file a complaint for snow covered sidewalks) their stake could have an outsized impact. It is in these locations that a large number of REIT’s and creatively named groups tend to appear, especially since the recession of 2009. If a large sell-off of their position swung pricing, say ten percent, it would have a destabilizing effect, especially if that neighborhood was already experiencing a variety of negative externalities.
Note the groups. There is the overall housing group of buyers and sellers (personal or investors) who are buying real estate to be used as places to live. The pricing system is a reflection of the value property commands as places of residence. The criminals are not participating in that market. They bring money into the market because it is reliable environment to launder their funds. While the criminals internalize this as profits, first time buyers in the large group can no longer afford to buy a home.
The presence of washermen (and women) in the marketplace also necessitates an increase in the stream of funding used to subsidize those of the larger group who are unable to provide for their own housing. It would be useful to know some of these numbers. Knowing the financial drain of the money launderers on our real estate market tells us how much the Justice Department can spend to pursue and capture these ne’re-do-wells. This is the housing justice we need to see happen.
In a recent paper, Balancing Purse and Peace:Tax Collection, Public Goods and Protests, Benjamin Krause from UC Berkley evaluates state capacity in Haiti. From the abstract:
Strengthening state capacity in low income countries requires raising tax revenue
while maintaining political stability. The risk of inciting political unrest when attempting to increase taxes may trap governments in a low-tax equilibrium, but public goods
provision may improve both tax compliance and political stability.
The author predictions are very intuitive: 1. decreasing pubic goods (in this case garbage collection) and fines decreases tax collection. 2. increasing public goods increases tax collection. What is interesting to me are the variables he chooses as benchmarks. The research measures the public willingness to pay taxes while tracking their voice as expressed in graffiti and the amount of time some members may spend on barricade building.
… I introduce two novel metrics for independently measuring political
unrest. First, to measure political speech, I conduct a census of and geo-tag the graffiti
across the city. I then use the presence, prevalence, and tone of political graffiti specifically
as outcomes of interest. Second, to measure the most violent or destructive political unrest,
I track the construction of barricades in neighborhoods which are built, and often lit on fire,
as a form of protest in this setting. Tracking both where these are constructed and which
areas are affected provide additional outcomes of interest. As a result, I am able to provide
novel experimental evidence of the effects of both tax collection and public goods on political
unrest – and on violent or destructive unrest in particular.
In my model I propose that in the public sphere, goods are provided when the voice of the group expresses a need and people are willing to do work on behalf of the objective.
In this paper the author measures voice by tracking graffiti. Lack of graffiti speaks to an endorsement of the state or a sign of favorable response to provision of garbage collection. And he measures work as the number of hours spent building barricades to protest against the state. Where lack of work is an endorsement of the state.
Exciting to see something similar appearing in an academic paper.
Externalities can be difficult to calculate. What is the cost per person to a community exposed to smog, or the damages from water laced with lead in Flint? Often times these figures are settled in court. But management consulting companies can also be in on the game. Take this story about Purdue Pharma as reported in the New York Times.
When Purdue Pharma agreed last month to plead guilty to criminal charges involving OxyContin, the Justice Department noted the role an unidentified consulting company had played in driving sales of the addictive painkiller even as public outrage grew over widespread overdoses.
Documents released last week in a federal bankruptcy court in New York show that the adviser was McKinsey & Company, the world’s most prestigious consulting firm. The 160 pages include emails and slides revealing new details about McKinsey’s advice to the Sackler family, Purdue’s billionaire owners, and the firm’s now notorious plan to “turbocharge” OxyContin sales at a time when opioid abuse had already killed hundreds of thousands of Americans.
Later in the article they tally those deaths up to 450,000 since 1999. Those, of course, are just the fatalities. There are no numbers offered for the hours that went into counseling the addicts before they OD’ed, or all the lost productivity an addict can bear on their support group. Neither of these costs were the costs concerning the McKinsey accountants. The number crunchers were concerned with the amount necessary to buy Purdue Pharma’s distributers, the local pharmacies like CVs or Walgreens, out of the discomfort of grieving mothers.
The presentation estimated how many customers of companies including CVS and Anthem might overdose. It projected that in 2019, for example, 2,484 CVS customers would either have an overdose or develop an opioid use disorder. A rebate of $14,810 per “event” meant that Purdue would pay CVS $36.8 million that year.
I’m not sure how one of the most prestigious consulting company in the world came up with $14,810. I’d truly be curious to know what went into the formula to calculate this externality. What dollar transfers were tracked between the group of heartbroken survivors and their pharmacies following an overdose that added up to $14,810? How did the rebate get summed up and presented to Pharma’s management as a viable expenditure in the form of a rebate?
Maybe the point is that an accounting of this nature is already in play. If a market price was calculated for a social cost buyout in this scenario, most probably it is a frequent calculation. So what is the McKinsey method? Inquiring minds want to know.
Politically outstate Minnesotans and Twin Cities urbanites maybe diverging, but demographically there are converging trends. Here’s #4 from MN Compass:
One theory offered to explain the tight housing market is that Covid has made it more precarious for this age group to complete a move; boomers who may have relocated to a new stage-of-life housing have stayed put. If true, then there should be a wave of availability coming up here in a few years in Roseville, Edina, Golden Valley and Mendota Heights.
My son is an engineering student, but for his liberal arts requirement he is taking a course on Imperialism. The course work tells the tale of western European economies growing so that they ventured past their countries boundaries to extract resources from Africa and Indo China and the Caribbean. The model describes a dominant group taking hold of a subservient group to help themselves to resources for commercial gains. Extraction isn’t just for the history books. Consider this fictitious story.
Let’s say there is a fairly large association for a trade group. It has a sizable staff and a fair number of members volunteers. There is also a multi-decade volunteer–let’s call him/her Jo Johnson– who through time and understanding has proven agile in eliminating dissenting voices and bullying staff. There are also dues, and committees, and boards, and political action.
The associational group has clout in a community due to its size and ability to organize. It also has some resources to pledge toward those seeking local office. Jo Johnson’s influence at the association serves to direct funds to candidates who, in turn, respond with business referrals. This action of using a group resource and trading for a private commercial gain describes a process of internalizing a public asset into a private, fungible transaction.
Now some may say–this shouldn’t be so! There are ethics to think about.
But– this judgement, this evaluation of the trades in play, is best evaluated by members of the group–not outsiders. Some members maybe thrilled that Jo Johnson is able to devote countless hours wage-free to the association, and thus, any extracting done is small compensation. The members of the group may feel the clout of the group is maximized in this very fashion, giving each member the best possible slice of the overall pie.
It is really all about transparency. If members knowingly make the decision to defer to Jo, then all is right in the world. If decisions have been made for them because Jo Johnson has become so skilled at shaking loose the opposition by throwing up all sorts of meeting delays and rescheduling (it is a volunteer activity after all), and has the power to develop allegiances by promising titles like a board position (a dusty old king of sorts selling titles), then the peasants should revolt.
The process of extracting value from a group and in doing so moving a resource from a public sphere to a private transaction occurs all the time, in many different scenarios. It is a trade. Whether a trade is in equilibrium requires, not moral judgement, but transparency and an ability to evaluate the options at hand.
Judging tin pots from afar is a risky business.
Given this is my 55th post I’d like recap the home-economics model. As explained on the About page, this site addresses the mechanics of value creation in the pursuit of pubic goods. In order to show these features, I must persuade you to shrug off a few established notions. The first is that the nature of goods is not public, nor club, common, or private (the purpose of the What is Public-What is Private posts). All goods can be employed in either the public or the private sphere. The second is that there is no such thing as market failure.
To start at the beginning, all of economic life is restricted by the resources this crusty old orb offers us along with what we can make of them with our time and talents. Limited resources applies both to goods employed in a private environment as well as those contributed toward community needs. Within these confines there are two types of activity creating a public sphere and a private sphere. One looks inward, behaving with a public (non-exclusionary) nature and the other activity looks beyond the group behaving in predatory fashion. This private sphere is well studied.
Let’s work backwards on some posts. Yesterday’s topic–Money and Safety— centered around the city’s approval process to fund more police force hours. Consider the groups. The defunders would argue that city money for police has resulted in providing safety for the racial majority (Gr 1) of the citizens (Gr 3) yet is failing to do the same for the minority groups (Gr 2). In light of this objection these city council members refuse to fund the police.
As an aside, this claim does not hold true. For the past five months the political climate in the city has severely limited the police’s capacity to maintain peace. The result has been a tragic loss of life primarily in Gr 2. This a new set of data contained in Gr 3 shows that it is group Gr2 which reaps greater (despite severe flaws) benefits than Gr 1. In addition to loss of life, Gr 2 has also disproportionately experienced a loss to businesses, where it is estimated 200 businesses burned or were damaged during the riots. The businesses suffered an externality from (lack of) services from the public sphere.
Consider the post A table set for adversaries. The outdoors women and men (Gr 1) are often at odds with urban arts people (Gr 2) over issues like gun control which increases the cost to own firearms without a clear benefit in reduction in crime, and funding for cultural events which requires subsidies to be viable, and outstate regulation of the environment which cuts jobs. Although Gr 1 and Gr 2 are often competing for resources they hold together in conjunction with all Minnesotans (Gr 3), by showing where Gr 1 and Gr 2 had a common interest, a funding stream was extracted from two very different associational groups.
Fire Station 2 speaks to the structure of firefighters (Gr 1) who devote their time and expertise at a reduced rate to protect the lives of property of their community (Gr 2). They get paid a below average hourly rate, which is a private transaction. The firefighters’ extra wage potential is community (Gr 2) work. Their services are made available to everyone (Gr 2) which makes this a public service.
Having established the need to look for groups, and identify whether the groups are engaging public or private economic activity, I’ll be posting more on externalities and internalizing. Both of these terms describe the appearance of positive or negative effects which show up in one sphere from a transaction in the other (Ex. private corporation pollutes the water causing a negative expense to a public good owned by the surrounding community). Then we can get to the fall of market failure.
Today is the last day of Minnesota’s gun deer season. My husband texted me an update from his deer stand a week or so ago. The warm weather has made the pre-dawn wake-up calls tolerable and allowed for an extended time hunkered down in camo gear. He reported seeing over fifty deer, almost all does and fawns.
Folks who never leave the urban centers and only experience gun ownership through violence and crime, view hunters as an odd breed. They are a blaze orange part-of-their-problem, an obstacle in tamping down the waywardness of youth. Hunting, however, barely contributes to MN mortality rates. The numbers show that fatalities from car collisions with deer are several times higher than death by fire arm while hunting. In 2019 there were 3 deaths on the roads, yet no deaths amongst the 841,063 individuals who bought deer hunting licenses.
The sport is safe enough to be conducted on a limited bases amongst the old growth oaks and quaking aspen in the 136,900 acres of parkland in the greater Minneapolis/St. Paul metropolitan area. Most of the deer hunts in the urban parks are for archery hunters (including crossbow if you are old enough, seniors get the priveledge of extra power). It is noted that the parks and trails remain open except during the few opportunities to rifle hunt, in which case the entire park closes.
It is the fortieth anniversary of the Minnesota Deer Hunters Association which attracts 20,000 members throughout the state. They “ensure that the culture of deer hunting in Minnesota is being upheld by improving opportunities through: Habitat, Education, Legislation/Advocacy.” Their on-line calendar is full of meetings, 7-gun raffles and holidays parties across the 400 chapters with names like Snake River, Crow River, Sturgeon River and Smokey Hills.
You wouldn’t think these gun toting outstaters would find themselves politically aligned with folks who wish to fund the MN Opera, Walker Art Center or Guthrie Theater. You wouldn’t think that they would sit at a table with earnest faced, clipboard toting environmentalists. But politically these two groups aligned on the matter of the health and welfare of our lakes and streams.
Minnesota voters approved the Clean Water, Land and Legacy Amendment to the state constitution in 2008. Beginning in 2009 and continuing through 2034, the Amendment increases the sales and use tax rate by three-eighths of one percent. Amendment dollars are dedicated to four separate funds, one of which is the Clean Water Fund.
The amendment was passed with 56% of the vote. The hunters weren’t going to let the deer herd drink from contaminated ditches, even if they think regulations on other commercial concerns are a bridge too far. And the urban activists simply had to put their resist impulses away for awhile and ignore their other objections to their fellow Minnesotans.
In the first year following the approval, the cash infusion was a little over $213 million, and to date the Minnesota Legacy has appropriated $2.9 billion. Basically there have been very few controversies with the implementation of the fund which allocates money into four pools: Arts and Cultural Heritage, Clean Water, Outdoor Heritage and Parks and Trails. All of the projects are listed for the public to see by the legislature.
So how do you find the adversaries to invite to your next dinner party? Look to where your guests spend their time and efforts. Don’t only invite the vocal ones, the emphatic chirpers. Look for the quiet ones too, doing the work of community. When the cause at hand intersects their activities, a stream of resources can be engaged, even among long standing rivals.
Alex Tabarrok recognized the passing of WV Judge Richard Neely on his blog site today. He credits the judge’s candor with getting his first paper published in 2003 in a good journal. His paper, written with Eric Helland, argued:
We argue that partisan elected judges have an incentive to redistribute wealth from out‐of‐state defendants (nonvoters) to in‐state plaintiffs (voters). We first test the hypothesis by using cross‐state data. We find a significant partisan effect after controlling for differences in injuries, state incomes, poverty levels, selection effects, and other factors. One difference that appears difficult to control for is that each state has its own tort law. In cases involving citizens of different states, federal judges decide disputes by using state law. Using these diversity‐of‐citizenship cases, we conclude that differences in awards are caused by differences in electoral systems, not by differences in state law.
But it is the judge’s very own words that confirm his economic motivation in his rulings.
As long as I am allowed to redistribute wealth from out-of-state companies to injured in-state plaintiffs, I shall continue to do so. Not only is my sleep enhanced when I give someone’s else money away, but so is my job security, because the in-state plaintiffs, their families, and their friends will reelect me. (Neely 1988, p. 4).
So what does this have to do with a post I recently wrote about Embrace, a women’s shelter in Wisconsin? The shelter’s director set up a GoFundMe page after she alienated local police by prominently advertising BLM signs around the facility. The goal was to replace $25K in funding that was pulled by the county. As of this morning the kitty is over $100K with a stated goal of $112K. I’m not sure how she picked that number, if there has been some sort of marketing strategy, to keep ratcheting up the goal as long as donors respond.
What I want people to see is the structure of the groups and the motivations for the economic activity between them. (It’s all about the group) In both cases there is a greater federal group. In both cases there is a smaller group; for judge Neely it was comprised of the citizens of WV, for the shelter it is the community which is within their service area. Both the judge and the director are extracting money from the larger group. One is unabashedly leveraging the law for the benefit of his constituents.
I question whether the other is providing full disclosure about the economic transaction that is still underway. Is there an assumption on the part of the greater public that their dollars are supporting an organization which serves a public effected by the concerns of BLM (whereas only a fifteenth of one percent of the population in this county is African American)? Or does the greater group understand they are funding a director who simply shares a similar ideology but has no power to actively contribute to the welfare of BLM?
In order to detect deceit or inefficiencies one must delineate the groups. One must also acknowledge the public nature of the motivations which drives the activity within the group–that anyone within the group receives access to the benefit. The judge, for example, rules in this way for all his constituents who found themselves in a similar conflict. That the services of the shelter are open to anyone within its service area.
Neither the judge nor the director evaluate whether the taking of resources from the greater group harm or diminishes services in some way to other members of the greater group. Their pursuit for funds is fulfilled under the nature of a private transaction, no different than how a corporation pursues funds for their services. This mode of competitive behavior happened recently when states bid against each other for PPE’s in the early days of the covid-19 crisis. Although they work as agents for a public, their obligation for such is only to the inner group.
Judge Neely was one of those confident individuals who scoffed at the traditional method of holding group norms behind a cloak of anonymity. For this we can be thankful, as his words confirm this social economic group structure and the motivation that drives its behavior.
In Shanghai a five story primary school building walked to its new location some 200 meters away.
Back in 1985 the Fairmount Hotel was moved in San Antonio. The clip is 17:47 minutes in length but contains lots of details including a two week halt to dig up artifacts from the Battle of the Alamo, maps, bridge crossing, groups involved ( and great 80’s theme music!). Take a look at the renovated Fairmont Hotel.
I remember when the Schubert Theater was relocated, lifted and rolled, in downtown Minneapolis in 1999. It took twelve days to move the 5.8 million pound structure, originally built in 1910. But it took a decade more and upwards of 38 million dollars (not all public), to transform it into the Cowles Center for Dance and the Performing Arts. How a city comes to terms with spending that kind of money involves achieving multiple objectives. The Star Tribune explains:
Meanwhile, restoration of the Shubert will create 150-plus construction and permanent jobs, bring tens of thousands of dance patrons downtown, complete the performing-arts vision for the successful Hennepin theater district and alleviate a loitering and crime problem that has moved from busy Block E to the lonely stretch of the avenue on which sit the Shubert and the Hennepin Center for the Performing Arts. At least that’s the official pitch. The cops and the new urbanists say having people on the street trumps crime. The arts crowds frequent local bistros and they don’t make trouble.
In 1995 Minneapolis was nicknamed Murderapolis after the New York Times wrote a story pointing out that the city had a higher murder rate per capita than New York. This particular spot in downtown struggled with crime. The jobs were also successfully filled by minority tradespeople.
CEO Louis King of Summit Academy OIC on the North Side, which trains dozens of young minority folks for good-paying jobs in the construction trades, is near agreement with McGough Construction and the city. Up to one-third of the workers on the Shubert project will be women, minority apprentices and skilled minority craftsmen. The jobs will pay $18.50 to $40 an hour for months. That’s a good thing.
Wouldn’t it be interesting to see some sort data estimate and geographic tie-in to how the public investment performed? What proportion of the presence of a renovated and vibrant building on that section of the block helped with crime reduction? Did the minorities and women who worked the jobs progress in their profession? Is there an index to say x- proportion of the investment was preservation, and x-amount inflated into other community value?
That’s the election news from Austin, Texas. A pretty hefty purchase for a metro of 2.2 million people. More on the deets from the local Patch:
The project came in two separate parts for voters, Proposition A and Proposition B — both of which gained support from the majority of registered voters. The former, which passed with 59 percent of the vote, calls for an 8.75-cent increase per $100 valuation to the city’s property tax rate, resulting in around a 4 percent increase to the total bill, toward a high-capacity transit system known as Project Connect. Prop B, which passed with 68 percent of the vote, provides for $460 million in debt issuance toward transportation improvements —sidewalks, bikeways, urban trails, safety projects and the like.
This wasn’t the first run at a rail transportation package in the capital of Texas. It wasn’t for lack of need. The urban’s center’s population growth for the decade ending in 2018 was 37%. Yet two prior funding attempts had failed. This time things were different.
“There were three main arguments that were made,” says Austin mayor Steve Adler. “One was congestion. One was climate change. One was mobility equity in our city.”
This time the city was all in. The focus was not only on light rail to improve commute times and to connect various parts of the city, goals which appeal to those who could better use the hour from a daily commute, and to those who prioritize emission reduction. But the plan also provides for “transportation infrastructure including sidewalks, transportation-related bikeways, urban trails, transportation safety projects (Vision Zero), safe routes to school and substandard streets.”
Let’s count the public objectives: transit, health, environment, access to jobs, recreation, safety. And lest you think they forgot about housing:
The plan, funded by an increase in property taxes, also includes $300 million to help make sure that as transportation improves in some neighborhoods and housing values rise, residents aren’t displaced from their homes due to gentrification. They’ll do this by offering rent subsidies, building more affordable housing, and giving financial assistance to home buyers.
Austin’s business success and hence population boom has put it in the enviable position of having a need for all these public projects as well as the financial ability to fund them, which they have tied directly to the assessed values of real estate.
But what about cities that just need one of those amenities, or even just a leg of light rail, or upgrades to a suite of bridges, or replacement of a water treatment facility? What are the standard pricing mechanisms and what are they tied back to in such a way that is financially acceptable to all those who support the improvement? What are the combinations that upsell a project and close the deal, such as this one in Austin?
Minnesota passed a 1.87 billion bonding at the fifth special session held in 2020. Two years of touring and evaluating worthy projects, and still the delays and posturing and addon’s. The beauty of a standardized pricing mechanism is that the crazy haggling is reduced to more amenable swings. And more importantly people don’t feel the hazy disbelief that I did when I walked away from a souk off the central square in Marrakesh after paying $20 for two sad sticks of incense.
Cute Scott in a beret shows how to make linen fabric from flax seed. Join 1.3 million viewers of this video.
Acrylic on Textile, by Novikov, $25,000.
The Weavers Guild of Minnesota is the largest of its kind in the US.
Barkcloth is a textured woven, usually printed cotton fabric that was popular in the 1930s-40s and 50s as an interiors fabric. It is great for upholstery and drapery.
The Milwaukee Journal Sentinel reports:
A popular online real estate brokerage service has engaged in racially discriminatory practices akin to modern-day redlining in Milwaukee and other cities across the country, according to a new federal lawsuit.
Redfin is a Seattle based company which entices, sellers in particular, with discounted fees.
In Milwaukee, Redfin was about eight times more likely to offer no service at all in extremely non-white ZIP codes and did not offer its “best available service” for homes in extremely non-white ZIP codes, an investigation by the local fair housing council found.
And concluding with this:
“This is a practice of racial segregation which diminishes access to wealth, access to quality of life opportunities for African Americans,” said William Tisdale, president and chief executive of the Milwaukee Fair Housing Council.
For those who follow the blog you know that I’ve been harping on the distinction between public and private, club and common goods, here, here and here. In my view goods are not sorted in this manner. A hammer is a hammer. If it is used to fix my deck it is in service to me privately, if it is used build a Habitat for Humanity house it is providing a public service to house the unsheltered.
The reason it is necessary to resort this understanding is because it is how we can see corruption. Corruption is not just up to politicians. A system can be corrupt and individuals, small groups and so on. When a set of rules are put into play, but then through cloaking and shading people (or groups of people) pursue other objectives, there is corruption.
Take the case of Embrace, a domestic violence shelter, that’s been in the news. The local police in Barron’s County Wisconsin objected to the posting of BLM posters around their building. And felt this posting calling out police violence, discredited their service. As a result public funding for the shelter was revoked. Here are the Huffington Post, Wisconsin Public Radio and the Washington Post articles.
Embrace states their core mission
To end violence, inspire hope and provide unwavering support to all people affected by domestic and sexual violence by engaging our community in safety, equality and partnership.
Now remember domestic violence persists when the normal social catches fail. When there are no close family members to pull their daughter, son or elderly parent out of an abusive situation. When there are no neighbors who notice excessive bruising and quietly offer the victim a way out. Domestic violence requires a formal force intervention because no other means of social exchange has worked or been available. And from what I understand, these types of calls are frequent and precarious for the police.
Given the necessity of the police to intervene in order to get the abused to their doorstep, you would think the shelter would consider this public agency as a core part of their workplan. As to why the shelter declined to remove their signs, Katie Bement the shelter’s executive director told the Huff Post:
“We were approaching it from an accessibility standpoint,” she told HuffPost over Zoom on Thursday. “We needed to show that we’re safe for those communities of color.”
Yet Barron county’s black population is .14% (a fifteenth of 1 percent) of all residents. I’m not sure how many of those 62 people would be drive by the shelter first before making a call for help or finding them on-line. I don’t have the statistics from police response rates or the shelter’s service records, but I suspect the demographics of those receiving aid lines up with the 97%.
As much as the shelter would like to merge the work they do in Barron County with the objectives of BLM the demographics seems to deny them this reality. The group they provide services to are overwhelmingly, if not completely unaffected by the concerns of BLM. In fact the two missions are at odds with one another as the later has diminished the abilities of police to provide security nationwide. Which is undoubtedly why the county pulled funding.
Now back to corruption.
Within a day of the Huffington post article being run, a GoFundMe page was set up for the shelter. Before dinnertime they had surpassed their $25K goal. As of this morning (screen shot included) the page is reporting a kitty of over $69K. Would the shelter have been able to raise this funding without the BLM story behind it? By accepting these donations has the shelter’s mission changed?
If you publish one set of objectives yet acquire funding for another, it seems that you are at odds with your group. It’s not that groups can’t change their rules or objectives, its just that you have to be clear about them so people know what they how their resources are being invested.
In a recent post, which challenged whether national defense is a public good, I suggested that sunlight was a public resource. Then I got to thinking about height restrictions in new construction, and in particular about a luxury high-rise development that was squashed by neighboring residents. A few years ago plans were underway for two residential towers on the west side of Southdale Center which is in an up-scale suburb of the Twin Cities. When over 200 folks filed into the city council chambers, there were more opposed than in favor.
But dozens of residents spoke against the towers, listing issues with everything from its height to the shadows it would cast.
So you see sunlight can be privatized. The owners of the 50’s built one-level homes to the west argued that the new apartments would steal their sunlight. The two towers would privately claim the warm beams, leaving them in the shadows. In economic terms, the new high rise would externalize shade.
There is a cost to shade. If you sell condos you know that southern exposures are more desirable than northern (though thankfully some feel a south view is a tad too warm). Being that there is more demand for this exposure these condo garner a higher price than those pointed north.
Here’s my original post challenging the breakdown of goods into public, private, club and common. Today I’m challenging the idea that fireworks are a public good. One would think that no-one could be excluded from seeing the fireworks. At least, once you already assume that you really mean no-one who is already close enough in the first place, can’t be excluded. An assumption which in itself, makes it a private good when you live one county over.
Realizing it has this private good, say the city lures people to move to their downtown by advertising an amazing fireworks display on the Fourth of July, shot from a bridge over the Mississippi. By fall the new residents have moved into a beautiful condo overlooking the stone arch bridge which spans the mighty river. By the following summer, however, a new condo building has been built which blocks their view.
Mr. and Mrs. NewRes show up at City Hall hotter than a hornets nest and demand compensation for being denied their access to a public good. After all it was the city that approved the permit that allowed the building to steal their view of the fireworks.
Here’s where I say be careful to identify your public, be careful to know your groups. The fireworks are public to those who show-up in a public space within sight of them. And you say I am splitting hairs. But am I?
When we tell families their children have access to a uniform public education for grades K-12, are we offering fireworks that can’t be seen by everyone? We all know that there are different levels of school performance all across the districts. At least a portion of that performance can be attributed to work done in the neighborhoods which support the learners and the educators in ways that are not supported elsewhere. So when the state says all learners will be provided ‘the same’ public good, is the state committing to make-up for the difference in the neighborhood support? Because that would tally quite a hefty tab.
Today the Nobel Prize in economics was presented to Paul Milgrom and Robert Wilson who developed auction theory and auction design. The Nobel Prize site provides an excellent background for understanding their work. Interestingly, this includes a differentiation between the common value of a good and the private value as a key feature. Where the definition of a private value is defined as one achieved when the bid decision is made independently of any other bidder in the auction.
The 1996 Laureate in Economic Sciences, William Vickrey, established auction theory in the early 1960s. He analysed a special case, in which the bidders only have private values for the good or service being auctioned off. This means that the bidders’ values are entirely independent of each other. For instance, this could be a charity auction for dinner with a celebrity (say a Nobel Laureate). How much you are willing to pay for such a dinner is subjective – your own valuation is not affected by how other bidders value the dinner. So how should you bid in this type of auction? You should not bid more than the dinner is worth to you. But should you bid lower, perhaps getting the dinner at a lower price?
The explanation goes on to describe the theory of common value.
Entirely private values are an extreme case. Most auction objects – such as securities, property and extraction rights – have a considerable common value, meaning that part of the value is equal to all potential bidders. In practice, bidders also have different amounts of private information about the object’s properties.
The portion of the bid that is devoted to the common value is based on a projection of what the bidder feels others will pay. Thus to have better knowledge is advantageous. Here the familiar diamond trader example if used.
Let’s take a concrete example. Imagine that you are a diamond dealer and that you – as well as some other dealers – are contemplating a bid on a raw diamond, so you can produce cut diamonds and sell them on. Your willingness to pay only depends on the resale value of the cut diamonds which, in turn, depends on their number and quality. Different dealers have different opinions about this common value, depending on their expertise, experience and the time they have had to examine the diamond. You could assess the value better if you had access to the estimates of all the other bidders, but each bidder prefers to keep their information secret.
Now if the diamond traders are from a tight knit community, say of the Jewish faith, than all those in the faith are included in the advantageous bidding environment. The information is public information within the group, private to those at the exterior. This type of diamond trader group is used by sociologist James S. Coleman in his famous treatise from 1988, Social Capital in the Creation of Human Capital.
Wholesale diamond markets exhibit a property that to an outsider is
remarkable. In the process of negotiating a sale, a merchant will hand
over to another merchant a bag of stones for the latter to examine in
private at his leisure, with no formal insurance that the latter will not
substitute one or more inferior stones or a paste replica. The merchandise
may be worth thousands, or hundreds of thousands, of dollars. Such free
exchange of stones for inspection is important to the functioning of this
market. In its absence, the market would operate in a much more cumbersome, much less efficient fashion.
Coleman stresses the benefits of assurances. Assurance which can be given due to the greater knowledge of the stones, their quality and source of origin. Coleman says:
Observation of the wholesale diamond market indicates that these close
ties, through family, community, and religious affiliation, provide the
insurance that is necessary to facilitate the transactions in the market. If
any member of this community defected through substituting other stones
or through stealing stones in his temporary possession, he would lose
family, religious, and community ties
Coleman concludes that there is value in this. His view is that value lies in the social ties, or the social network, which parties to the transaction are able to access.
Another more recent use of the Jewish diamond traders appears in a paper by Barack D. Richmond, How Community Institutions Create Economic Advantage: Jewish Diamond Merchants in New York. In this case the value retained by the group are derived from an ability to enforce contracts. Here’s an excerpt from the paper, bolding is mine:
The particularly interesting feature of this system is the economic role
of ultra-Orthodox Jews. The ultra-Orthodox provide critical value-added
How Community Institutions Create Economic Advantage 415
services that add significant efficiency to the system of exchange. They work
as skilled diamond cutters whose polishing increases the sale prices of stones,
and they play the essential role of middlemen brokers who match certain
stones with the buyers who most value them. Their unique credibility provides
the Jewish merchants with a comparative advantage over rival merchant groups
that lack such community foundations, and their role identifies limitations
to public contract enforcement that persist even in developed economies.
When courts fail, community institutions can arise to fill their place.
Here’s what we know from these three uses of the Jewish diamond traders example. All three feel the group has created some type of value—not to anyone individual but a blanket of value across the group. This value has something to do with how the group is connected, how the information flows through its membership. And that there is a commitment to maintain a standard of enforcement.
What is exciting about Milgrom and Wilson’s differentiation of private and common value is that there is a tie-in to price. An auction bring buyers and sellers into a marketplace. And the values that these two new Nobel Laureates observed reflect activity of a private nature and that of a common nature.
As pointed out in previous posts the categorizing of goods as either private or public (or club and common) is inadequate. My first post here introduces the idea that a haircut can have a public (common) component. And I also wrote a post about national defense as there are many examples of how this public good was used to the benefit (privately) of a sub-group. The long and the short of it is that goods are goods. It is how they are employed, by what types of groups, which determines the portion of their price derived from a private sphere and that derived from a public sphere.
National defense is the most common example cited as an economic public good. It is certainly the oldest public good, harking back to the times of kings and round tables, and even before. Allegiances were made, city walls built. But let’s see if it always meets the economists’ definition of providing a service that is non-excludable and non-rivalrous.
The name alone gives away that it is already a different something than, say, sunlight. Right off the bat the precursor ‘national’ tags the defense to a nation. So it is a service to one nation, excluding all outsiders. In this case being non-excludable really means the service cannot exclude citizens of the nation in question.
However, there also seems to be all sorts of exceptions to this rule. Take the Japanese Americans that were locked up during WWI. Around sixty-two percent of the internees were US citizens and yet a global conflict thrust them at odds with their nation. Recently Mike Pence criticised the President Obama Administration for not rescuing ISIS hostage Kayla Mueller. The claim being that this US citizen did not receive the protections of national defense that she and her family deserved.
Like any definition it only takes one counter example to throw the statement into question. Let’s consider whether the good is non-rivalrous: that the use of it by one consumer does not diminish the use of it by another. This seems right. Everyone in Philadelphia received the same protections against terrorism when Navy Seals took out Osama Bin Laden, as folks in Albuquerque. This mastermind of evil would do harm to any American which means his demise makes all Americans safer.
Yet, our history is riddle with military involvement in countries in efforts to preserve business interests abroad. In the early part of the twentieth century the US defense forces were repeatedly used in Nicaragua to protect business interests. Declarations against such activities include objecting to the use of a national resource to benefit a sub-group, the business community. (excludable) And since the military is run on a budget, the occupation of Nicaragua from 1912-1933 undoubtedly took away from expenditures on other national defense initiatives. The end goal of defending all citizens is rivalrous as there is always a menu of possible national pursuits that could drain the national purse.
It seems to me that there are no such things as goods that are solely for the public benefit. There are only goods, or rather goods and services. And those goods and services can be used by individuals or groups, for private or public objectives. Some goods, by nature, are more prone to be shared within groups. Some are more productively produced while strongly preserving private property rights. Groups with shared interests decide how to employ goods and services, where the groups can be as large as the human race all the way down to a couple.
Crime has been on the rise since May of 2020. In Minneapolis more than 400 people have been shot and 64 killed so far this year. It’s common to hear residents say they know more people that have been carjacked in broad daylight than have contracted Covid-19.
One neighborhood is organizing to do something about it. When a building in their neighborhood was slated to become a Salvation Army run women’s shelter, the moms went into high gear. Their priorities had changed and the folks in Near North weren’t going to have bureaucrats telling them what they needed.
Residents were vigorously opposed. A Mother’s Love went door-knocking in a multi-block radius of the Gordon Center and found no one knew about the proposal. The Northside Residents Redevelopment Council—the official neighborhood association—filed an injunction to halt the process.
Council member Ellison showed up. Elected in 2017 on the promise “to imagine a future for the North Side authored by North Siders,” he apologized for poor public engagement and encouraged constituents to lay out their concerns. “I don’t at all take skepticism of this project as, like, an attack on homeless women,” he assured them.
Frustrated residents pulled no punches. There were already three homeless shelters within a mile of the Gordon Center, yet the North Side had been without a sanctuary for at-risk youth since the 1980s, they said. Many community-led proposals for the Gordon Center had been rejected over the years.
The residents, who were organizing on their own time, objected to the shelter not because they weren’t sympathetic to the cause. It’s just that in the ever changing landscape of neighborhood needs, the effect of increased crime was more damaging to the youth than the needs of the women.
“I’ve lived here for 43 years,” said Willard Hay resident Esther Adams. “I’ve seen kids shot on this corner, I’ve seen kids killed on this corner. We’re just trying to help the kids here.”
In addition to the granular differentiation of need, the resources necessary for a youth center is thought to be considerably less than the homeless shelter.
The Gordon Center (homeless shelter) will cost more than $4 million to convert into a shelter, but peace activists like Clemons’ group, A Mother’s Love, believe it would cost considerably less for a youth center because of the way the building is designed. For one, it already has a playground.
In this case the system worked. The neighborhood did the work to voice a preference between services for their group. It was close though. The building permit had already been approved for the homeless shelter. If the moms had been too busy to put in the time, or their council member too distance from his constituents or the county’s ambition too strong, there could have been four shelters and no youth center.
It just seems like there should be some general tracking of these things by neighborhood. A hospital wouldn’t go into an area with three other hospitals. Even a McDonald’s wouldn’t have four franchisees within a mile of each other. Some sort of indexing of the mix of services provided to not only serve residents, but also to be sure that various age groups and household formations are being supported.
Home Economics 