Sunday, October 15, 2017

Embedded Economics: Help Needed from Conrad Readers

As I have mentioned here before, one of my current writing projects is a collection of short works of literature that have interesting economic insights. In a conversation yesterday at an SSC meetup, someone mentioned a Conrad story that sounded as though it would fit in very nicely. Unfortunately he didn't remember the title. I am not sure if he was misremembering something in "Typhoon," which has a scene similar but less interesting, or if there is another story I have not been able to find.

The story as he remembered it involved a ship in a storm, as does "Typhoon." In his version, the money belonging to the crew was in a strong box that got so shaken that there was no way of distinguishing what belonged to whom. The solution was for the captain to instruct the crew members to each write down how much of their money was in the box. He would then add up the amounts and, if they came to more than was actually in the box, dump the box overboard. It's an ingenious solution, although I can see some practical problems, and would fit neatly into my discussion of mechanisms for making it in the interest of individuals to reveal information. The only thing I now have for that is the story of Solomon and the baby which is much weaker, since it depends on the woman who is pretending the baby is hers not guessing what Solomon is up to. 

In "Typhoon," the money that gets mixed up belongs to the Chinese passengers and the much less interesting solution is an even division.

Does anyone here know of the story in question? Does anyone have another work of literature that illustrates another solution to the general problem? Another example of a short work of literature with an interesting economic insight?

My discussion of the Solomon story and the general issue it illustrates

The current draft of the book, webbed for comments

Monday, October 09, 2017

Gun Control and Homicide Rates

Some recent comment threads on Slate Star Codex, my favorite blog, have dealt with the always lively issue of gun control. One standard argument is "we know gun control laws work because the U.S., which has relatively few restrictions, has a much higher homicide rate than countries such as Canada or the U.K., which have much more restrictions."

One response sometimes offered is that there are other countries, such as Mexico and Brazil, with both restrictive laws and homicide rates much higher than in the U.S. That then gets into the question of what comparisons are more relevant, in what respects the U.K. is more like the U.S. than Brazil is.

An alternative approach, which I think more useful, is to ask whether the difference in homicide rates existed prior to the difference in regulation. The web makes that question much easier to answer than it would have been twenty years ago. 

In the case of the U.K., the answer is pretty clear. According to the Wiki page on Firearms Policy in the U.K., the first restrictive legislation was the pistol act of 1903, but it had little effect:
The Act was more or less ineffective, as anyone wishing to buy a pistol commercially merely had to purchase a licence on demand over the counter from a Post Office before doing so. In addition, it did not regulate private sales of such firearms.
The first  significant restriction was the Firearms Act of 1920. There were additional acts in 1937, 1968, 1988, 1997 and 2006.

The data on Homicide rates per 100,000:


Year U.S.  England&Wales Ratio
1900 1.2 0.96 1.3
1910 4.6 0.81 5.7
1920 6.8 0.83 8.2
1930 8.8 0.75 11.7
*1946 6.4 0.81 7.9
1950 4.6 0.79 5.8
1960 5.1 0.62 8.2
1970 7.9 0.69 11.4
1980 10.2 1.11 9.2
1990 9.4 1.09 8.6
2000 5.5 **1.71 3.2
2010 4.8 1.14 4.2


*No data for the U.K. 1940-1945
**The figure is for the U.K. rather than England and Wales

Looking at those data, it is hard to believe that the reason the U.K. has a lower homicide rate than the U.S. is restrictive legislation.

My point here is not that gun control doesn't (or does) work. I wouldn't be surprised if some restrictions on firearm ownership reduced the homicide rate, but if so, the effect on the U.S./U.K. ratio is lost in the noise. My point is rather that the sort of factoids that show up in this sort of argument, even when they are true, are rarely as solid evidence as those who offer them claim.

This would be a better post if I had a good example on the other side of the same debate. I don't, but perhaps someone reading this can offer one.


European Speaking Trip in April

I have made tentative arrangements for another European trip. At the moment it looks like four or five talks in two weeks, so I could squeeze in a few more, hence this post. Current schedule:

April 14th, Belgrade

April 21st, Sofia

April 28th, Norway

Sometime between those dates possibly Poland, possibly Milan. For additional talks I prefer places reasonably close to places already on my schedule, so as not to spend too much time traveling.

My usual terms are expenses plus whatever honorarium the host thinks appropriate. Defining expenses gets complicated for a multi-talk trip. If one host has offered to fly me to Europe and back, I expect others to provide accommodations and any additional travel expenses, otherwise it's accommodations plus an even division of travel expenses among the hosts.