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Urged to eat less meat, Americans are actually eating more

posted by Jason Kottke   Nov 17, 2016

For most of the past decade, consumption of meat in the United States remained flat or declined.

For environmental, health, and animal welfare advocates, this was great news. Surely it meant that efforts to raise awareness about the disturbing impacts of meat production were inspiring people to cut back on hamburgers and bacon. As Paul Shapiro, vice president of Farm Animal Protection for the Humane Society of the United States, wrote in 2012, “The pressure is being felt all over, and for the first time in decades, our overconsumption of meat is beginning to get reined in.”

But according to research by a Dutch bank, US meat consumption jumped in 2015.

Not only was last year noteworthy for the near 5% increase in per capita consumption, but also due to the fact that the growth was achieved without the help of beef, consumption of which was flat. We expect US protein production growth of 2.5% per annum through 2018 — down from 3% in 2015 — with beef being the largest contributor relative to pork and poultry.

What drove the decline in the first place? Price. It always comes back to supply and demand.

Ranchers and farmers trimmed their herds because of the recession, historically high feed costs, and drought in the Great Plains. Meanwhile, domestic disease outbreaks like porcine epidemic diarrhea virus, or PEDv, meant that tens of thousands of hogs never made it to market. So Americans cut back on meat.

But by 2015, many of these issues driving higher prices were resolved. The retail price of beef has dropped by 22 percent, pork by 7 percent, and chicken by 5 percent. So Americans are eating more meat again.

“Consumers are responding to falling prices. That’s a big part of the story,” says Sawyer. The chicken industry, in particular, has also gotten more efficient and more capable of raising chickens fast.

I was at the grocery store last night and was shocked by the prices in the meat aisle. Lots of cuts on sale for just a few dollars a pound. (via the latest and particularly excellent issue of Susan MacMillan’s newsletter)

We Work Remotely

Obama’s letter to his successor about the economy

posted by Jason Kottke   Oct 07, 2016

In the latest issue of The Economist, President Obama wrote a letter about the “four crucial areas of unfinished business in economic policy” that his successor will have to deal with.

Wherever I go these days, at home or abroad, people ask me the same question: what is happening in the American political system? How has a country that has benefited-perhaps more than any other-from immigration, trade and technological innovation suddenly developed a strain of anti-immigrant, anti-innovation protectionism? Why have some on the far left and even more on the far right embraced a crude populism that promises a return to a past that is not possible to restore — and that, for most Americans, never existed at all?

It’s true that a certain anxiety over the forces of globalisation, immigration, technology, even change itself, has taken hold in America. It’s not new, nor is it dissimilar to a discontent spreading throughout the world, often manifested in scepticism towards international institutions, trade agreements and immigration. It can be seen in Britain’s recent vote to leave the European Union and the rise of populist parties around the world.

Much of this discontent is driven by fears that are not fundamentally economic. The anti-immigrant, anti-Mexican, anti-Muslim and anti-refugee sentiment expressed by some Americans today echoes nativist lurches of the past — the Alien and Sedition Acts of 1798, the Know-Nothings of the mid-1800s, the anti-Asian sentiment in the late 19th and early 20th centuries, and any number of eras in which Americans were told they could restore past glory if they just got some group or idea that was threatening America under control. We overcame those fears and we will again.

Look at Obama, busting out the Know-Nothings like it ain’t nothing.

Optimizing the dining experience for couples

posted by Jason Kottke   Oct 03, 2016

This is entertaining: Megan McArdle considers four possible economic approaches to how couples should order food in restaurants.

3. Individual property rights, with option trading. Now we’re moving toward a more centrally planned economy. The menu is individually consulted, and then the two parties state their preferences. If these preferences are strong, then matters proceed much as in the above strategy. However, if indecision is expressed, the trading is opened: “If you get the clam chowder, I’ll get the mushroom crostini, and we can split.” Option trading is usually, but not always, confined to the appetizer course. Any offer can be refused, and a substitute offered — “What if I got the clam chowder, and you got the ham timbales?” — or both parties may reluctantly conclude that no trade is possible, and revert to their original choices.

Well done, Team Restaurant! You are now beginning to realize the magnificent benefits of trade. Coordination and cooperation have permitted you to agree on choices that jointly improve utility.

However, I must tell you that you are still probably not at the highest valued use of your food dollar. You are almost certainly investing most of your effort in appetizers or shared desserts, which are the minority of your spending, time and consumption. If you want not merely to improve your utility, but to maximize it, then you are going to have to invest more effort in coordination.

Her conclusion is spot on; it’s the best way to dine out.

On the shifting role of racism in American slavery

posted by Jason Kottke   Sep 20, 2016

In a recent episode of his EconTalk podcast, host Russ Roberts talks with Michael Munger about a paper Munger co-authored about how white Southern attitudes toward slavery shifted from around 1815 to 1835. The episode is interesting throughout,1 but I want to highlight this attitude shift Munger writes about in the paper, something I was previously unaware of.

Sifting through documents from the era between the American Revolution and the Civil War, Munger and his co-author Jeffrey Grynaviski found that Southern whites believed, in the first decade or two of the 19th century, that owning slaves was evil but necessary. There was this system in place and it was bad but we’re gonna go with it because, whaddya gonna do? But in a period of about 20 years, due to a variety of factors, mostly economic, the justification for slavery shifted primarily to a racist one: that black people were inferior and needed to be cared for by whites. Southern whites came to believe, like really believe, that they were doing their slaves a favor by enslaving them and that the slaves were better off than they would be in Africa.

The way we defined it in this paper was that racism became a substitute justification for slavery. And the reason was, the original justification for slavery, which was the Roman one of wasn’t good enough. And so Southerners cast about and found basically an alternative, which was the Greek justification for slavery. And let me just say very briefly what those two are. The one justification for slavery, and it was pretty common in Rome, was that if you lost a battle and were captured, then you might either be killed or kept as a slave. And there is a mutually beneficial exchange, if you will, in the sense that you’ve already lost. So, me saying, ‘I tell you what: I won’t kill you if you will agree to act as my slave for the rest of your life. And I may free you; I may not; but that’s up to me.’ And you say, ‘Killed/be a slave: I’m going to go with the slave thing.’ But, it meant that some slaves were very excellent. And in Roman society some slaves occupied very high positions, positions of respect. It’s just that they made this promise. It was an economic institution. And that was the way that slavery had existed in Africa: if you lost a battle, then you would be captured by the other side. It was almost like indentured servitude: you could work it off.

Well, that didn’t work in the American South because they wanted to maintain slaves, to be able to identify slaves and to have a justification that would allow them to enslave the children — which the old Roman justification would never have allowed. You are not going to be a slave if you are born to a slave, because you didn’t lose in battle: you would have been free.

So, the Southerners needed a different way, so they were looking for the Aristotelian notion of slavery, which is that slaves are people who are either morally inferior or lack the judgment to make independent choices. They are like children or like horses. That means that you actually have a positive-good justification for enslaving them: if I have a thoroughbred horse or a fancy dog, it would be cruel of me to set it loose to let it run around, because it’s not capable of taking care of itself. I have obligations to take care of it. My ownership actually gives me obligations. And what’s interesting and what this paper is about is how Southerners worked that out between about 1815 and 1835, and started to understand the implications for how they had to change the economic institutions of slavery to match this new ideology that they were creating.

Yet another example of how powerful economic self-interest is in shifting moral beliefs.

  1. Although it was uncomfortable at times listening to two privileged pro-market white guys talking about slavery, particularly in the moments where they discuss matters from the slaves’ perspectives. But in fairness, they do a good job in admitting their privilege and the awareness that their economic beliefs may not square with things like human rights and justice forms the basis of a fascinating conversation.

Tracking Homer Simpson’s jobs and salary

posted by Jason Kottke   Sep 19, 2016

Vox recently took a look at every single job that Homer has ever had on The Simpsons in an attempt to see where his average salary falls on the economic spectrum in America.

Over the show’s 596-episode run, Homer has had at least 191 jobs. They’ve ranged from executive positions to service jobs, and have dotted the entire economic spectrum, from ultra-rich to the poverty line.

In the list below, we’ve compiled the real-life salaries for 100 of these jobs. Seasonal jobs (like “mall Santa”), and jobs that were virtually impossible to find salary data for (“beer smuggler”) were excluded, as were any repeats (he was an Army private twice, for instance). His full-time gig as a safety inspector is highlighted in yellow, for reference.

He gets a lot of flack, but Homer is actually the most interesting person in America by a wide margin, even though he’s not well compensated for it.

See also Homer Economicus: The Simpsons and Economics.

Intermediaries and the financial crisis of 2008

posted by Jason Kottke   Aug 11, 2016

In the most recent video from Marginal Revolution University, Tyler Cowen explains how the role of financial intermediaries contributed to the financial crisis of 2008. He highlights homeowners and banks taking on too much leverage, poorly planned incentive systems, securitization of mortgages, and banks making loans that are over-reliant on investor confidence.

By 2008, the economy was in a very fragile state, with both homeowners and banks taking on greater leverage, many ending up “underwater.” Why did managers at financial institutions take on greater and greater risk? We’ll discuss a couple of key reasons, including the role of excess confidence and incentives.

In addition to homeowners’ leverage and bank leverage, a third factor played a major role in tipping the scale toward crisis: securitization. Mortgage securities during this time were very hard to value, riskier than advertised, and filled to the brim with high risk loans. Cowen discusses several reasons this happened, including downright fraud, failure of credit rating agencies, and overconfidence in the American housing market.

Finally, a fourth factor joins homeowners’ leverage, bank leverage, and securitization to inch the economy closer to the edge: the shadow banking system. On the whole, the shadow banking system is made up of investment banks and various other complex financial intermediaries, highly dependent on short term loans.

When housing prices started to fall in 2007, it was the final nudge that pushed the economy over the cliff. There was a run on the shadow banking system. Financial intermediaries came crashing down. We faced a credit crunch, and many businesses stopped growing. Layoffs ensued, increasing unemployment.

The Complacent Class

posted by Jason Kottke   Jul 25, 2016

Complacent Class

The Complacent Class is a forthcoming book by Tyler Cowen.

Since Alexis de Tocqueville, restlessness has been accepted as a signature American trait. Our willingness to move, take risks, and adapt to change have produced a dynamic economy and a tradition of innovation from Ben Franklin to Steve Jobs.

The problem, according to legendary blogger, economist and bestselling author Tyler Cowen, is that Americans today have broken from this tradition — we’re working harder than ever to avoid change. We’re moving residences less, marrying people more like ourselves and choosing our music and our mates based on algorithms that wall us off from anything that might be too new or too different. Match.com matches us in love. Spotify and Pandora match us in music. Facebook matches us to just about everything else.

Of course, this “matching culture” brings tremendous positives: music we like, partners who make us happy, neighbors who want the same things. We’re more comfortable. But, according to Cowen, there are significant collateral downsides attending this comfort, among them heightened inequality and segregation and decreased incentives to innovate and create.

Cowen is also releasing another book called Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals.

In that work, I outline a true and objectively valid case for a free and prosperous society, and consider the importance of economic growth for political philosophy, how and why the political spectrum should be reconfigured, how we should think about existential risk, what is right and wrong in Parfit and Nozick and Singer and effective altruism, how to get around the Arrow Impossibility Theorem, to what extent individual rights can be absolute, how much to discount the future, when redistribution is justified, whether we must be agnostic about the distant future, and most of all why we need to “think big.”

It is only available by emailing him that you’ve pre-ordered The Complacent Class. Oh, and a reminder about how I (try to) read books.

The behavioral psychology behind freemium mobile games

posted by Jason Kottke   Jul 22, 2016

In a short video, Joss Fong and Dion Lee of Vox explore how free mobile games are engineered to make money using behavioral psychology.

By collecting troves of data on how users play their games, developers have mastered the science of applied addiction. And with the rise of “freemium” games that rely on micro-transactions, they have good reason to deploy the tools of behavioral psychology to inspire purchases.

Back in 2013, Ramin Shokrizade explained The Top F2P Monetization Tricks:

To maximize the efficacy of a coercive monetization model, you must use a premium currency, ideally with the ability to purchase said currency in-app. Making the consumer exit the game to make a purchase gives the target’s brain more time to figure out what you are up to, lowering your chances of a sale. If you can set up your game to allow “one button conversion”, such as in many iOS games, then obviously this is ideal. The same effect is seen in real world retail stores where people buying goods with cash tend to spend less than those buying with credit cards, due to the layering effect.

Purchasing in-app premium currency also allows the use of discounting, such that premium currency can be sold for less per unit if it is purchased in bulk. Thus a user that is capable of doing basic math (handled in a different part of the brain that develops earlier) can feel the urge to “save money” by buying more. The younger the consumer, the more effective this technique is, assuming they are able to do the math. Thus you want to make the numbers on the purchase options very simple, and you can also put banners on bigger purchases telling the user how much more they will “save” on big purchases to assist very young or otherwise math-impaired customers.

Having the user see their amount of premium currency in the interface is also much less anxiety generating, compared to seeing a real money balance. If real money was used (no successful game developer does this) then the consumer would see their money going down as they play and become apprehensive. This gives the consumer more opportunities to think and will reduce revenues.

Mike Rose also discussed the psychological aspect of freemium games in Chasing the Whale: Examining the ethics of free-to-play games:

On the topic of in-app purchases, Griffiths says, “The introduction of in-game virtual goods and accessories (that people pay real money for) was a psychological masterstroke.”

“It becomes more akin to gambling, as social gamers know that they are spending money as they play with little or no financial return,” he continues. “The one question I am constantly asked is why people pay real money for virtual items in games like FarmVille. As someone who has studied slot machine players for over 25 years, the similarities are striking.”

Griffiths argues that the real difference between pure gambling games and some free-to-play games is the fact that gambling games allow you to win your money back, adding an extra dimension that can potentially drive revenues even further.

Update: In 2009, Chris Anderson wrote a book called Free: The Future of a Radical Price in which he argued that freemium was going to be an important business model.

The online economy offers challenges to traditional businesses as well as incredible opportunities. Chris Anderson makes the compelling case that in many instances businesses can succeed best by giving away more than they charge for. Known as “Freemium,” this combination of free and paid is emerging as one of the most powerful digital business models. In Free, Chris Anderson explores this radical idea for the new global economy and demonstrates how it can be harnessed for the benefit of consumers and businesses alike. In the twenty-first century, Free is more than just a promotional gimmick: It’s a business strategy that is essential to a company’s successful future.

Michael Lewis on irrationality in human decision-making

posted by Jason Kottke   Jun 06, 2016

Michael Lewis Undoing

Michael Lewis (c’mon, you know, Moneyball, The Big Short) is coming out with a new book in December called The Undoing Project: A Friendship that Changed Our Minds about the flaws that crop up in human decision-making.

Forty years ago, Israeli psychologists Daniel Kahneman and Amos Tversky wrote a series of breathtakingly original studies undoing our assumptions about the decision-making process. Their papers showed the ways in which the human mind erred, systematically, when forced to make judgments about uncertain situations. Their work created the field of behavioral economics, revolutionized Big Data studies, advanced evidence-based medicine, led to a new approach to government regulation, and made much of Michael Lewis’s own work possible. Kahneman and Tversky are more responsible than anybody for the powerful trend to mistrust human intuition and defer to algorithms.

Kahneman won the Nobel Prize in economics in 2002 and is the author of the well-regarded Thinking, Fast and Slow. (via nytimes)

Rival Chinese construction firms battle with bulldozers

posted by Jason Kottke   Apr 19, 2016

Worries over the slowing Chinese economy spilled out into the streets of Hebei province last weekend as two construction firms battled with bulldozers while competing for the same business. That is some end-times shit right there.

The link between health and wealth

posted by Jason Kottke   Apr 12, 2016

If you’re poor, you might want to consider moving to a place where your life expectancy will be reasonably high. In many parts of America, there is only a minor gap between the life expectancies of the wealthy and the poor.

But in some other parts of the country, adults with the lowest incomes die on average as young as people in much poorer nations like Rwanda, and their life spans are getting shorter.

If you’re rich, you’re probably OK right where you are (regardless of where that happens to be). Here are some remarkable numbers from the NYT Upshot: The rich live longer everywhere. For the poor, geography matters.

How to win at Monopoly and piss off your friends

posted by Jason Kottke   Feb 08, 2016

Monopoly Win

If you’re forced into playing Monopoly by friends, you can employ this simple strategy to ensure they will never ever ask you to play again.

With a second monopoly completed, your next task is to improve those properties to three houses each, then all of your properties to four houses each. Six properties with three houses will give you more than half of the houses in the game, and four houses each will give you 75% of the total supply. This will make it nearly impossible for your opponents to improve their own property in a meaningful way. Keep the rulebook nearby once the supply gets low, as you will undoubtedly be questioned on it. At this point, you will be asked repeatedly to build some friggin’ hotels already so that other people can build houses. Don’t.

At this point, you more or less have the game sewn up. If losing a normal game of monopoly is frustrating, losing to this strategy is excruciating, as a losing opponent essentially has no path to victory, even with lucky rolls. Your goal is to play conservatively, lock up more resources, and let the other players lose by attrition. If you want to see these people again, I recommend not gloating, but simply state that you’re playing to win, and that it wasn’t your idea to play Monopoly in the first place.

It is difficult to read this without thinking about income inequality in the real world.

A History of the Slave-Breeding Industry in the United States

posted by Jason Kottke   Feb 02, 2016

American Slave Coast

The American Slave Coast: A History of the Slave-Breeding Industry by Ned & Constance Sublette is a book which offers an alternate view of slavery in the United States. Instead of treating slavery as a source of unpaid labor, as it is typically understood, they focus on the ownership aspect: people as property, merchandise, collateral, and capital. From a review of the book at Pacific Standard:

In fact, most American slaves were not kidnapped on another continent. Though over 12.7 million Africans were forced onto ships to the Western hemisphere, estimates only have 400,000-500,000 landing in present-day America. How then to account for the four million black slaves who were tilling fields in 1860? “The South,” the Sublettes write, “did not only produce tobacco, rice, sugar, and cotton as commodities for sale; it produced people.” Slavers called slave-breeding “natural increase,” but there was nothing natural about producing slaves; it took scientific management. Thomas Jefferson bragged to George Washington that the birth of black children was increasing Virginia’s capital stock by four percent annually.

Here is how the American slave-breeding industry worked, according to the Sublettes: Some states (most importantly Virginia) produced slaves as their main domestic crop. The price of slaves was anchored by industry in other states that consumed slaves in the production of rice and sugar, and constant territorial expansion. As long as the slave power continued to grow, breeders could literally bank on future demand and increasing prices. That made slaves not just a commodity, but the closest thing to money that white breeders had. It’s hard to quantify just how valuable people were as commodities, but the Sublettes try to convey it: By a conservative estimate, in 1860 the total value of American slaves was $4 billion, far more than the gold and silver then circulating nationally ($228.3 million, “most of it in the North,” the authors add), total currency ($435.4 million), and even the value of the South’s total farmland ($1.92 billion). Slaves were, to slavers, worth more than everything else they could imagine combined.

Just reading that turns my stomach. The Sublettes also recast the 1808 abolition of the transatlantic slave trade as trade protectionism.

Virginia slaveowners won a major victory when Thomas Jefferson’s 1808 prohibition of the African slave trade protected the domestic slave markets for slave-breeding.

I haven’t read the book, but I imagine they touched on the fact that by growing slave populations, southern states were literally manufacturing more political representation due to the Three-Fifths clause in the US Constitution. They bred more slaves to help politically safeguard the practice of slavery.

Update: Because slaves were property, Southern slave owners could mortgage them to banks and then the banks could package the mortgages into bonds and sell the bonds to anyone anywhere in the world, even where slavery was illegal.

In the 1830s, powerful Southern slaveowners wanted to import capital into their states so they could buy more slaves. They came up with a new, two-part idea: mortgaging slaves; and then turning the mortgages into bonds that could be marketed all over the world.

First, American planters organized new banks, usually in new states like Mississippi and Louisiana. Drawing up lists of slaves for collateral, the planters then mortgaged them to the banks they had created, enabling themselves to buy additional slaves to expand cotton production. To provide capital for those loans, the banks sold bonds to investors from around the globe — London, New York, Amsterdam, Paris. The bond buyers, many of whom lived in countries where slavery was illegal, didn’t own individual slaves — just bonds backed by their value. Planters’ mortgage payments paid the interest and the principle on these bond payments. Enslaved human beings had been, in modern financial lingo, “securitized.”

Slave-backed securities. My stomach is turning again. (via @daveg)

Update: Tyler Cowen read The American Slave Coast and listed a few things he learned from it.

2. President James Polk speculated in slaves, based on inside information he obtained from being President and shaping policy toward slaves and slave importation.

3. In the South there were slave “breeding farms,” where the number of women and children far outnumbered the number of men.

Update: In his book The Half Has Never Been Told: Slavery and the Making of American Capitalism, Edward Baptist details how slavery played a central role in the making of the US economy.

As historian Edward Baptist reveals in The Half Has Never Been Told, slavery and its expansion were central to the evolution and modernization of our nation in the 18th and 19th centuries, catapulting the US into a modern, industrial and capitalist economy. In the span of a single lifetime, the South grew from a narrow coastal strip of worn-out tobacco plantations to a sub-continental cotton empire. By 1861 it had five times as many slaves as it had during the Revolution, and was producing two billion pounds of cotton a year. It was through slavery and slavery alone that the United States achieved a virtual monopoly on the production of cotton, the key raw material of the Industrial Revolution, and was transformed into a global power rivaled only by England.

(via @alexismadrigal)

A spectre is haunting Europe, the spectre of standing on the escalator

posted by Jason Kottke   Jan 19, 2016

The London Underground recently conducted an experiment on one of the escalators leading out of the busy Holborn station. Instead of letting people walk up the left side of the escalator, they asked them to stand on both sides.

The theory, if counterintuitive, is also pretty compelling. Think about it. It’s all very well keeping one side of the escalator clear for people in a rush, but in stations with long, steep walkways, only a small proportion are likely to be willing to climb. In lots of places, with short escalators or minimal congestion, this doesn’t much matter. But a 2002 study of escalator capacity on the Underground found that on machines such as those at Holborn, with a vertical height of 24 metres, only 40% would even contemplate it. By encouraging their preference, TfL effectively halves the capacity of the escalator in question, and creates significantly more crowding below, slowing everyone down. When you allow for the typical demands for a halo of personal space that persist in even the most disinhibited of commuters — a phenomenon described by crowd control guru Dr John J Fruin as “the human ellipse”, which means that they are largely unwilling to stand with someone directly adjacent to them or on the first step in front or behind — the theoretical capacity of the escalator halves again. Surely it was worth trying to haul back a bit of that wasted space.

Leaving aside “the human ellipse” for now,1 how did the theory work in the real life trial? The stand-only escalator moved more than 25% more people than usual:

But the preliminary evidence is clear: however much some people were annoyed, Lau’s hunch was right. It worked. Through their own observations and the data they gathered, Harrison and her team found strong evidence to back their case. An escalator that carried 12,745 customers between 8.30 and 9.30am in a normal week, for example, carried 16,220 when it was designated standing only. That didn’t match Stoneman’s theoretical numbers: it exceeded them.

But not everyone liked being asked to stand for the common good:

“This is a charter for the lame and lazy!” said one. “I know how to use a bloody escalator!” said another. The pilot was “terrible”, “loopy,” “crap”, “ridiculous”, and a “very bad idea”; in a one-hour session, 18 people called it “stupid”. A customer who was asked to stand still replied by giving the member of staff in question the finger. One man, determined to stride to the top come what may, pushed a child to one side. “Can’t you let us walk if we want to?” asked another. “This isn’t Russia!”

There’s a lesson in income inequality here somewhere…1

  1. What a phrase! Check out Fruin’s chapter on Designing for Pedestrians for more.

  2. Ok, explicitly: the people standing are poor, the people walking are rich, and speed is income. When the walkers redistribute some of their speed to the whole group, on average everyone gets to where they’re going faster. But the walkers are unwilling to give up walking because they believe their own individual speed will prevail. “This isn’t Russia!” indeed.

How climate change will affect world economies

posted by Jason Kottke   Oct 22, 2015

Climate change economics map

A new study from scientists and economists at Stanford and Berkeley has taken a stab at determining how climate change will affect the world’s economic activity. As part of their study, they look at which countries might benefit from climate change and which might lose out. As you might expect, countries in the Northern Hemisphere with cooler climates stand to benefit while the rest of the world will not. Here are some of the projected big winners (the Nordic countries) and losers (the Middle East):

Mongolia +1413%
Finland +516%
Iceland +513%
Russia +419%
Estonia +259%

Saudi Arabia -96%
Kuwait -96%
Oman -94%
United Arab Emirates -94%
Iraq -93%

Canada (+247%) is another one of the potential big winners while the US (-36%) stands to lose out…along with all of Africa, South America, India, and China. This quote by one of the study’s lead authors, really grabbed me by the throat:

What climate change is doing is basically devaluing all the real estate south of the United States and making the whole planet less productive. Climate change is essentially a massive transfer of value from the hot parts of the world to the cooler parts of the world. This is like taking from the poor and giving to the rich.

Among other many things, anthropogenic climate change is an issue of discrimination.1 Rich, predominantly white countries caused the problem and can do the most to limit the damage, but climate change will disproportionately affect poor countries, poor people (even in rich countries), women, and people of color. The rich need to do something about it so that the poor will not suffer. The problem is, the world’s wealthy have a long history of not being incentivized to help anyone but themselves. I hope this will turn out differently…or, as sometimes happens, the desires of the wealthy and the needs of the poor dovetail into action of joint benefit.

  1. In fact, with no offense to those who rightly rail against causes of discrimination around the world, I would go so far to say that this is by far the largest and most important discriminatory issue the world faces today. Climate change will permanently remake the entire world and its economy, and the poor, women, and people of color stand to lose huge.

Danny Meyer: no more tipping at my restaurants

posted by Jason Kottke   Oct 14, 2015

Eater has the scoop: Danny Meyer’s Union Square Hospitality Group is eliminating tipping at all of their full-service restaurants.

Big news out of Manhattan: Dining out is about to get turned on its head. Union Square Hospitality Group, the force behind some of New York’s most important restaurants, will announce today that starting in November, it will roll out an across-the-board elimination of tips at every one of its thirteen full-service venues, hand in hand with an across-the-board increase in prices.

Why are they doing this? In part because cooks get the shaft at restaurants:

Under the current gratuity system, not everyone at a restaurant is getting a fair shake. Waiters at full-service New York restaurants can expect a full 20 percent tip on most checks, for a yearly income of $40,000 or more on average — some of the city’s top servers easily clear $100,000 annually. But the problem isn’t what waiters make, it’s what cooks make. A mid-level line cook, even in a high-end kitchen, doesn’t have generous patrons padding her paycheck, and as such is, on average, unlikely to make much more than $35,000 a year.

I hope this catches on.

Mo’ money, mo’ happiness

posted by Jason Kottke   Oct 13, 2015

Four years into a twenty-year study of the mental conditions of kids living in rural North Carolina, a quarter of the participants experienced a dramatic increase in annual income. The researchers used this opportunity to find out how that increase in wealth affected the wellbeing of the kids. What they learned is that even a little money goes a long way.

Not only did the extra income appear to lower the instance of behavioral and emotional disorders among the children, but, perhaps even more important, it also boosted two key personality traits that tend to go hand in hand with long-term positive life outcomes.

The first is conscientiousness. People who lack it tend to lie, break rules and have trouble paying attention. The second is agreeableness, which leads to a comfort around people and aptness for teamwork. And both are strongly correlated with various forms of later life success and happiness.

How to make a $1500 sandwich

posted by Jason Kottke   Sep 22, 2015

Making a sandwich completely from scratch took this guy six months and cost $1500. He grew his own vegetables, made his own butter & cheese, made sea salt from salt water, and harvested wheat for bread flour. And that’s with a few shortcuts…he didn’t raise the cow & chicken from a calf & chick or the bees from a starter hive.

See also I, Pencil, how a can of Coca-Cola is made, and How to Cook Soup.

The economic history of one NYC block

posted by Jason Kottke   Aug 14, 2015

Economist William Easterly and some of his colleagues built a site that focuses on the economic development of a single block in NYC, Greene Street between Houston and Prince. In the past 175 years, use of the block has gone from wealthy residential to sex work to garment manufacturing to artist galleries to luxury retail.

133 Greene Street, for example, has been part of the large Bayard farm, a grand residential home, a brothel, a garment factory, part of a slum, an art gallery, and is today the home of luxury co-op residences and a Dior Homme store.

Many of these shifts took only a decade and could have been very difficult to anticipate.

The site was built to accompany an academic paper on economic development.

By 1870, the Greene Street Block contained 14 brothels, the highest concentration of any block in the City. Just as surprising was the sudden end of prostitution on the block. Brothels still abounded in 1880, but during the next decade entrepreneurs demolished and rebuilt almost the entire block as castiron factories and warehouses, and what was left of the red-light district moved up town.

The site is a little confusing to navigate, but is worth checking out in detail. For instance, check out how quickly the garment manufacturing industry shifted from downtown to the present-day Garment District.

Greene Street

Greene Street

(via wired)

Procrastination vs. impatience

posted by Jason Kottke   Aug 07, 2015

From the abstract of a paper on the relationship between impatience and procrastination, this caught my eye:

We find substantial evidence of time inconsistency. Namely, more that half of the participants who receive their check straight away instead of waiting two weeks for a reasonably larger amount, subsequently take more than two weeks to cash it.

This reminded me of a passage I read recently in Oliver Burkeman’s The Antidote1 about the pitfalls of positive visualization.

Yet there are problems with this outlook, aside from just feeling disappointed when things don’t turn out well. These are particularly acute in the case of positive visualisation. Over the last few years, the German-born psychologist Gabriele Oettingen and her colleagues have constructed a series of experiments designed to unearth the truth about ‘positive fantasies about the future’. The results are striking: spending time and energy thinking about how well things could go, it has emerged, actually reduces most people’s motivation to achieve them. Experimental subjects who were encouraged to think about how they were going to have a particularly high-achieving week at work, for example, ended up achieving less than those who were invited to reflect on the coming week, but given no further guidelines on how to do so.

In one ingenious experiment, Oettingen had some of the participants rendered mildly dehydrated. They were then taken through an exercise that involved visualising drinking a refreshing, icy glass of water, while others took part in a different exercise. The dehydrated water-visualisers — contrary to the self-help doctrine of motivation through visualisation — experienced a significant reduction in their energy levels, as measured by blood pressure. Far from becoming more motivated to hydrate themselves, their bodies relaxed, as if their thirst were already quenched. In experiment after experiment, people responded to positive visualisation by relaxing. They seemed, subconsciously, to have confused visualising success with having already achieved it.

In a similar way, it may be that the people who received their checks right away but didn’t cash them “relaxed” as though they had actually spent the money, not just gotten the check. (via mr)

  1. This book was endlessly fascinating to me, like reading the user’s manual on how my brain works for the first time. Like, wait, I don’t have to be anxious about not setting goals? And it can actually make me happier? Sign me up!

The Waffle House Index

posted by Jason Kottke   Jul 23, 2015

The Waffle House Index is an informal metric used by FEMA administrator Craig Fugate to evaluate how bad a storm is. Basically, whether the Waffle House in town is open or serving a limited menu can tell you something about how bad the storm was and how much recovery assistance is necessary.

If you get there and the Waffle House is closed? That’s really bad. That’s where you go to work.

See also The Economist’s Big Mac Index and other odd economic indicators. (via @naveen)

What’s going on in Greece?

posted by Jason Kottke   Jun 29, 2015

Socrates once wrote, “He is richest who is content with the least.” Even the great Greek philosopher would be feeling a little too rich today in Greece where citizens, greeted by news that the nation’s banks would be closed for the week, lined up at ATMs and employed the Socratic method with the repetition of the question: “Where the hell’s my money?” And if you’ve taken a look at your stock portfolio, there’s a decent chance you’ve asked your broker the same question. Here’s an overview of the Greek economic crisis from NYT Upshot, and the latest updates from BBC.

This global economy stuff is all Greek to me. If you’re feeling the same, you might appreciate Quartz’s guide to everything you need to know about this unfolding Greek tragedy, Mashable’s list of the five things you need to know about the meltdown, and Felix Salmon’s helpful explainer.

Michael Lewis explains the Greek financial crisis by comparing it to a Berkeley pedestrian.

He simply wants to stress to you, and perhaps even himself, that he occupies the high ground. In doing so, he happens to increase the likelihood that he will wind up in the back of an ambulance.

How New Orleans drastically reduced their inmate population

posted by Jason Kottke   Jun 25, 2015

About the time Katrina struck, New Orleans was the jail capital of America, incarcerating people at four times the national average. Since that time, the city has reduced its local inmate population by 67%. What was the trick? First, they stopped treating jailing like a business. And second, they built a smaller jail. No really. That was a key factor. And get this; during the period New Orleans stopped jailing so many people, there has been an overall reduction in crime. Smaller jails. Less crime. Jazz hands.

[This item is syndicated from Nextdraft, but I had to add a little something about induced demand. Like building bigger roads resulting in more traffic (not less), building bigger jails means you want to fill them with criminals. Kudos to New Orleans for building a smaller jail and finding ways to adjust to the reduced supply of jail cells. -jkottke]

What is the best charitable cause in the world?

posted by Jason Kottke   Jun 16, 2015

The Atlantic’s Derek Thompson examines the act of giving and goes in search of the best charitable cause in the world.

Perhaps the most piercing lesson from effective altruism is that one can make an astonishing difference in the world with a pinch of logic and dash of math.

See also Doing Good Better.

Time travel for financial gain

posted by Jason Kottke   Jun 03, 2015

Tyler Cowen was recently asked how he’d best use a time machine for financial gain. Here was the specific query:

Suppose you had a time machine you that you solely wanted to use for financial gain. You can bring one item from the present back to any point in the past to exchange for another item that people of that time would consider of equal value, then bring that new item back to the present. To what time period would you go, and what items would you choose to maximize your time-travel arbitrage?

Cowen notes some difficulty with an obvious approach:

The obvious answer encounters some difficulties upon reflection. Let’s say I brought gold back in time and walked into the studio of Velazquez, or some other famous painter, and tried to buy a picture for later resale in the present. At least some painters would recognize and accept the gold, and gold is highly valuable and easy enough to carry around. Some painters might want the gold weighed and assayed, but even there the deal would go fine.

The problem is establishing clear title to the painting, once you got back home. It wouldn’t turn up on any register as stolen, but still you would spend a lot of time talking to the FBI and Interpol. The IRS would want to know whether this was a long-term or short-term capital gain, and you couldn’t just cite Einstein back to them. They also would think you must have had a lot of unreported back income.

So establishing present ownership of a past item is an issue…as is authentication via carbon dating. I don’t have a specific scheme in mind, but I would think any general approach would also need to minimize the butterfly effect of your trade so that, for example, your existence in the present is not disrupted. So you can’t trade Leonardo an iPhone 6 for the Mona Lisa. But maybe you could trade $1 for a winning ticket for last week’s $300 million lottery jackpot…or would the numbers change somehow because of your visit? What if you bought 100,000 shares of Apple stock in 2003? How would that action effect the present? What is a large enough action to make you rich but with a small enough effect to keep the present otherwise unchanged? Since I didn’t see any super-compelling solutions in the comments at MR, I’m gonna open the comments here…I know someone has been thinking about this extensively or has a link to a good discussion elsewhere. Please stay on topic, mmm’kay?

“Where are the solar powered cars?” and other questions about Mad Max: Fury Road

posted by Jason Kottke   May 29, 2015

I saw Mad Max: Fury Road yesterday (enjoyed it) but have a few questions.

1. With gasoline in such short supply, I’m surprised the various groups in the movie didn’t take more advantage of solar power to generate energy for electric vehicles and such. Sunshine is obviously abundant in post-apocalyptic Australia and from the looks of what was scavenged from before the nuclear war and the ingenuity on display in getting what they found to function, they should have been able to find even rudimentary solar cells and get them to work.

2. Speaking of energy scarcity, I wonder if the troop-pumping-up and opponent-intimidating function of the flamethrowing guitar player was worth all of the fuel spewed out of the end of his instrument and energy consumed by the incredible number of speakers on his rig.

3. The roads in the movie were in remarkable shape, aside from the swampland. Who was responsible for their upkeep? Even dirt roads need maintenance or they develop potholes and washboarding. And for what reason were they kept in such good condition outside of the Citadel/Gas Town/Bullet Farm area? Aside from Furiosa’s Rig, the chase party, and two smallish motorcycle gangs, I saw no other vehicular traffic on the roads…and who would have been semi-regularly traveling out past the canyon anyway? To where? For what?

4. What was the political and economic arrangement between the Citadel, Gas Town, and the Bullet Farm? Did the Citadel trade their water and crops for gas and bullets? Or was Immortan Joe, as the defender of the lone source of abundant fresh water in the region, the defacto leader of all three groups? The People Eater and Bullet Farmer certainly came a’running when Joe needed help retrieving his wives. There were obviously other sources of water in the region — how else did the biker gangs survive? — so you’d think that Gas Town and the Bullet Farm could have teamed up to squeeze Joe into giving them a better deal or even overthrowing him. Point is, there seemed to be a surprising lack of political friction between the three groups, which seems odd in an environment of scarcity.

5. Surely land was plentiful enough that large solar stills could have generated enough fresh water for people to live on without having to rely on the Citadel for it.

Update: Reddit has a go at answering some of these questions. (via @pavel_lishin)

High-rent blight in the West Village

posted by Jason Kottke   May 27, 2015

Shuttered storefronts. Abandoned retail locations. Small businesses that fall like the House of Cards & Curiosities on Eighth Avenue. These are the signs of urban blight we usually associate with economic downturns or poor, forgotten neighborhoods. But these shuttered storefronts are in one of America’s wealthiest neighborhoods; NYC’s West Village. As The New Yorker’s Tim Wu explains, some urban blight emerges when economic times are too good and rents get too high. And we’re not just talking about mom and pop here. Even Starbucks is closing some Manhattan locations due to rent hikes.

Expensive wine is for suckers

posted by Jason Kottke   May 21, 2015

Wine ratings are all over the place, particularly when price enters the picture. This video explains that the most expensive wine is not always the best tasting wine, but you might prefer it anyway.

(via @riondotnu)

Asking “who’s the customer?”

posted by Jason Kottke   May 07, 2015

If you’ve bought a ticket to an event in the past, oh, 15-20 years, chances are you got it from Ticketmaster. Chances are also pretty good that you think Ticketmaster completely sucks, mostly because of the unavoidable and exorbitant convenience fee they charge. And that probably has you wondering: if everyone who uses the service hates Ticketmaster so much, how are they still in business? Because ticket buyers are not Ticketmaster’s customers. Artists and venues are Ticketmaster’s real customers and they provide plenty of value to them.

Ticketmaster sells more tickets than anybody else and they’re the biggest company in the ticket selling game. That gives them certain financial resources that smaller companies don’t have. TM has used this to their advantage by moving the industry toward very aggressive ticketing deals between ticketing companies and their venue clients. This comes in the form of giving more of the service charge per ticket back to the venue (rebates), and in cash to the venue in the form of a signing bonus or advance against future rebates. Venues are businesses too and, thus, they like “free” money in general (signing bonuses), as well as money now (advances) versus the same money later (rebates).

Read that whole Quora answer again…there’s nothing in there about TM being helpful for ticket buyers. It turns out asking “who’s the customer?” is a great way of thinking about when certain companies or industries do things that aren’t aligned with good customer service or user experience.1

Take Apple and Google for instance. Apple sells software and hardware directly to people; that’s where the majority of their revenue comes from. Apple’s customers are the people who use Apple products. Google gets most of their revenue from putting advertising into the products & services they provide. The people who use Google’s products and services are not Google’s customers, the advertisers are Google’s customers. Google does a better job than Ticketmaster at providing a good user experience, but the dissonance that results between who’s paying and who’s using gets the company in trouble sometimes. See also Facebook and Twitter, among many others.

Newspapers, magazines, and television networks have dealt with this same issue for decades now.2 They derive large portions of their revenue from advertisers and, in the case of the TV networks, from the cable companies who pay to carry their channels. That results in all sorts of user hostile behavior, from hiding a magazine’s table of contents in 20 pages of ads to shrieking online advertising to commercials that are louder than the shows to clunky product placement to trimming scenes from syndicated shows to cram in more commercials. From ABC to Vogue to the New York Times, you’re not the customer and it shows.

This might be off-topic (or else the best example of all), but “who’s the customer?” got me thinking about who the customers of large public corporations really are: shareholders and potential shareholders. The accepted wisdom of maximizing shareholder value has become an almost moral imperative for large corporations. The needs of their customers, employees, the environment, and the communities in which they’re located often take a backseat to keeping happy the big investment banks, mutual funds, and hedge funds who buy their stock. When providing good customer service and experience is viewed by companies as opposite to maximizing shareholder value, that’s a big problem for consumers.

Update: I somehow neglected to include the pithy business saying “if you’re not paying for the product, you are the product”, which originated in a slightly different phrasing on MetaFilter.

Update: One example of how maximizing shareholder value can work against good customer service comes from a paper by a trio of economists. In it, they argue that co-ownership of two or more airlines by the same investor results in higher prices.

In a new paper, Azar and co-authors Martin C. Schmalz and Isabel Tecu have uncovered a smoking gun. To test the hypothesis that institutional investors gain market power that results in higher prices, they examine airline routes. Although we think of airlines as independent companies, they are actually mostly owned by a small group of institutional investors. For example, United’s top five shareholders — all institutional investors — own 49.5 percent of the firm. Most of United’s largest shareholders also are the largest shareholders of Southwest, Delta, and other airlines. The authors show that airline prices are 3 percent to 11 percent higher than they would be if common ownership did not exist. That is money that goes from the pockets of consumers to the pockets of investors.

How exactly might this work? It may be that managers of institutional investors put pressure on the managers of the companies that they own, demanding that they don’t try to undercut the prices of their competitors. If a mutual fund owns shares of United and Delta, and United and Delta are the only competitors on certain routes, then the mutual fund benefits if United and Delta refrain from price competition. The managers of United and Delta have no reason to resist such demands, as they, too, as shareholders of their own companies, benefit from the higher profits from price-squeezed passengers. Indeed, it is possible that managers of corporations don’t need to be told explicitly to overcharge passengers because they already know that it’s in their bosses’ interest, and hence their own. Institutional investors can also get the outcomes they want by structuring the compensation of managers in subtle ways. For example, they can reward managers based on the stock price of their own firms — rather than benchmarking pay against how well they perform compared with industry rivals — which discourages managers from competing with the rivals.

(via @krylon)

  1. BTW, asking who the customer is doesn’t help in every situation where bad service and contempt for the customer rears its ugly head. See cable companies, mobile carriers, and airlines. Companies also have other conflicts of interest that interfere with good customer experience. Apple, for instance, does all kinds of things that aren’t necessarily in the best interest of the people buying their products. And as the Ticketmaster example shows, determining a company’s true customer isn’t just a matter of where the revenue comes from. It’s never simple.

  2. This is a potential problem with kottke.org as well. Almost all of my revenue comes from advertising. My high regard for the reader keeps me pretty honest (I hope!), but it’s difficult sometimes.

The Hidden Effects of Cheap Oil

posted by Jason Kottke   Mar 31, 2015

Today’s drop in crude-oil prices, which began in the summer of 2014, may be as disruptive as the quadrupling of oil prices that created the oil shock of 1974.

For most of us, lower oil prices simply translate as better prices at the gas pump. But the value of oil has big consequences around the world. From Moisés Naím in The Atlantic: The Hidden Effects of Cheap Oil.