Tyler Cowen's Blog, page 580
December 19, 2011
Assorted links
1. Deborah Weiss used to ask me about this.
2. http://supervillainornewt.com
4. The Austro-Chinese business cycle, from Krugman, and from Bloomberg.
5. What has changed in the climate change debate, and Ireland yes but not only.
Anti Chain Store Policies in India and America
When we think of growth and innovation we often think first of high-tech sectors but in the United States during the roaring 1990s it was retail productivity growth, led by Walmart, that drove the country. Retail productivity is important because the retail sector is huge and because retail productivity extends backwards to manufacturing and service productivity. Today, growth in India is slowing in part because the Indian government is no longer pushing reform, and the most notable failure is the failure to modernize India's retail sector.
The Guardian: The beleaguered Indian government has been forced to suspend its decision to allow international supermarkets to invest in India's £300bn retail market in the face of political opposition.
…Allies of the increasingly vulnerable administration of Manmohan Singh, now in its second term, had refused to back the measure. Critics said the move, which theoretically does not need parliamentary approval, would put millions of shopkeepers across India out of business and threaten the livelihood of farmers.
Supporters argued that it would mean improvements of infrastructure and lower prices for consumers.
Analysts said the delay to the move was due to "political not ideological factors. There are local elections coming up and no one wants to risk the commercial traders' votes…. The failure to implement what would have been the first major economic reform since Singh's second term began in 2009 will reinforce the sense of drift surrounding the Indian government, compounding anxiety at a time when growth has slowed, inflation remains high and the value of the Indian rupee is dropping fast.
Stock prices of Indian retailers plunged in response to the news.
The political constraints here are enormous. Here is Marc Levinson author of The Box and more recently The Great A&P and the Struggle for Small Business in America, on some of the crazy anti-chain story policies in the United States:
President Franklin D. Roosevelt, who portrayed himself as the consumer's friend, turned restrictions on chains into national policy. Under the National Industrial Recovery Act of 1933, one of Roosevelt's programs to revive the economy, federally mandated codes were instituted that limited store hours, and regulated wages and prices — but the restrictions applied only to chains and large stores, not to mom-and-pop merchants. When those codes were invalidated by the Supreme Court, Congress enacted another law, the Robinson-Patman Act of 1936, intended to make most volume discounts illegal so that small shopkeepers could buy their goods for the same prices as giant chains.
In 1946, the government won criminal convictions against executives of the largest chain of all, the Great Atlantic & Pacific Tea Company (A&P), on the bizarre charge that they were violating antitrust law by selling groceries too cheaply. As late as 1953, the government was trying to break A&P apart by claiming that baking its own bread and canning its own vegetables gave the company an unfair advantage.
The Culture that is Fairfax
WP: The Fairfax County School Board decided Thursday to permit indoor video surveillance cameras for the first time, capping a months-long debate over whether such monitoring technology is appropriate and effective for public schools.
It's good to know that the schools are training our children for their role as future citizens.
*Why Nations Fail*
The authors are Daron Acemoglu and James Robinson and the subtitle is The Origins of Power, Prosperity, and Poverty. Could there be a better and more up to date book on the importance of economic institutions? Self-recommending! Excerpt:
[In Russia] Opposition to railways accompanied opposition to industry, exactly as in Austria-Hungary. Before 1842 there was only one railway in Russia. This was the Tsarskoe Selo railway, which ran seventeen miles from St. Petersburg to the imperial residencies of Tsarskoe Selo and Pavlovsk. Just as Kankrin opposed industry, he saw no reason to promote railways, which he argued would bring a socially dangerous mobility, noting that "Railways do not always result from natural necessity, but are more an object of artificial need or luxury. They encourage unnecessary travel from place to place, which is entirely typical of our time."
This book has literally hundreds of good examples of how to apply institutional economics and property rights theory to economic history.
If I have a worry about the book, it is this. I do not disagree with the claims about institutions. But I am less sure that Acemoglu and Robinson dispose of the more "fundamentalist" theories, which might invoke say geography or other pre-institutional factors behind economic growth, political change, or for that matter levels of interpersonal trust. Where exactly do the institutional changes come from? They seem to come from other institutional changes (see p.209 for one example of many), elephants all the way down. I would have chosen the alternative subtitle: "Power, Prosperity, and Poverty, Everything but the Origins." That's still a lot.
The book is due out March 20.
December 18, 2011
Victorian street food
Victorian street food was a huge industry. In the north you would find tripe sellers; I remember the one in Dewsbury market that sold nine different varieties of tripe, including penis and udder (which is remarkably like pease pudding). Another popular street food was pea soup with, according to where you lived, either pig's trotters or bits of ham chopped up into it. Peas boiled in the pod and served with butter were similarly popular. Stalls known in my youth as whelk stalls also sprang up, selling jellied eels, whelks, winkles and prawns, all by the pint or the half-pint. You could splash a bit of vinegar on them and eat them at the stall or take them home with you.
That is from the new and excellent A History of English Food, by Clarissa Dickson Wright. This book also offers up a good deal of confirming evidence for Paul Krugman's prior hypotheses about English food.
Markets in everything but is there a core?
Ireland would need to get a significant reduction in its debt burden in order to get any referendum on new European budgetary rules passed, Minister of State for Finance Brian Hayes has said.
"The idea that we could have a referendum without that agreement, on a substantial re-arranging of our debt, wouldn't fly," Mr Hayes said in an interview with the Sunday Business Post .
"We would have to have that in place before we put the question (to the people) and that's beginning to be understood at an EU level, which puts us in a stronger position," he said.
Story here, via Economistmeg.
*First Principles*
That is the new book by John Taylor (not Herbert Spencer) and the subtitle is Five Keys to Restoring America's Prosperity. I predict Taylor will play a leading role in a new Republican administration, should there be one. He advocates, among other things, the use of the Taylor rule.
Assorted links
1. John Gray and many others try to redesign the banknotes, slide through the show. Some are quite good. Here is the one from Audrey Niffenegger.
2. More on the euro carry trade, note I am not an optimist on this, I simply note it is a plan of sorts. Via Interfluidity, here is lots on financial repression, important read.
3. Zizek on Coriolanus, and my 2006 blog post on the individual mandate.
4. "There are even allegations that the Ukrainian justice minister's official car was illegally appropriated in Germany…A number of years ago, the Ukrainian government decreed that the state could sell confiscated cars that were stolen in other countries or add them to its motor pool. This even applies when the vehicles are on an Interpol list. In other words, Justice Minister Lavrynovych wouldn't even be violating Ukrainian laws by driving a car that was stolen in Germany." Story here.
Google ghost books
If you Google "Peter Temin economics of antiquity," the book seems to exist (Princeton University Press 2011?), but none of the clickthroughs seem to yield anything. I call them Google ghost books. If PUP clears this up, I am happy to pass along the answer. The mere fact that I would Google this at random suggests there is a strong demand for the book, from me at least.
In the meantime, here is Peter on financial intermediation in the early Roman empire (pdf).
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