Japan Trying to Halve Garbage

Reduction of waste is a worthy endeavour where the goal is to reduce the costs of its disposal. Still, the measures reported here about Japan trying to reduce garbage by 60% obviously require rethinking. As a nation of some very affluent people, I am certain that the quest to reduce waste and cut down on the levels of garbage produced should not go to the extent of asking for citizens to carry their own chop sticks.Instead the approach should try to alter the relative incentives in using disposable chop sticks against the reusable ones. As i recall too, the disposal chopsticks are often made of wood and are perfectly replaceable.

Taxing the use of plastic bags as this blog has reported here and here recently would be the most appropriate way to go about it. It may help to recognize that any waste that occurs is driven not by the fact that Japanese society is obsessed with consumption but because there are no competitive alternatives. The spokesmen for the environment ministry ought to be cognizant of the fact that the highly productive economy would also be characterized by consumption. Again, it may help to look to Ireland as imposed austerity is not useful. It is unlikely that this is the last mention of this because many countries will be grappling with the quest for cleaner environment without taking a look at the most successful example. Bureaucrats pushing that ambitious goal would benefit from looking to Ireland.

Thomas Sowell On Economic Facts and Fallacies

This blog featured a quote here of the economist Thomas Sowell from an essay which I found rather incoherent. However, that was not intended to be an overall view of his work as an economist. I accept that he is a pretty clear thinker and good reviewer of data in trying to test the conventional views about differences in income between women and men, race inequality and other normative issues such as income distribution. He gets credit for his keen eye for data to support the views that he propounds and is known to be a myth buster regarding economic fallacies in this book.

In this podcast on the Library of Economics and Liberty site, he speaks rather clearly and at length about the issues of poverty, inequality in income and educational attainment, population size and immigration. His views on all but the last are not only pretty solid but appear to find immense support in the data that he marshals for the discussion. A good economist he certainly is, but he is less lucid and candid when he tackles the subject of immigration towards the end. I am certain this is because of the reluctance towards the acceptance of immigrants today among political conservatives.

As is noticeable, when questioned on his view about immigration policy, he quickly returns to an argument about a nation needing citizens more than workers. I do not know whether this theory is even testable and consider that his interviewer lets him get away with it as he has had a very good interview on his core subject of economics and its applications. Core contradictions are discernible in the fact that immigration is substantially responsible for the fact that the US remains one of the few high income countries with a young and growing population size. The distinguished professor trips when he attempts to justify a conservative political position that is at odds with the facts of immigration.

Not Ethanol But a Carbon Tax

There is understandable and altogether justified concern for global warming in many countries today. What one sees less of is well-considered arguments for the policy responses that individual governments may take or for a degree of coordinated action to respond sensibly to this issue. As this article by Jeff Jacoby of the Boston Globe reports, many people have considered that resorting to bio-fuels in general and ethanol in particular is one of the ways. Then things began to go wrong because the assumption was that corn growers must be granted subventions.

This would not be a defensible approach from first principle for many reasons but it has now turned out that the calculations were wrong and lots of public funds have gone to waste. Many politicians who supported this approach appeared to be merely intent on distribution of public funds to their constituencies. On the other hand, there was serious objection to the support for ethanol based on the flawed thinking that the rise in prices would lead to food shortages in low-income countries whose citizens would be priced out of the food market.

Since the piece is very well written, there's not much to add save that the approach to ensuring the reduction of use of carbon fuels is clear. It has been argued on this here before, a carbon tax would be a superior instrument.

Ethiopia's Central Bank Finds Fool's Gold

I think that the cynicism that libertarians have for government is confirmed almost every day whenever revelations of unbelievable corruption and incompetence is revealed. A story reported here and here about the discovery that a proportion of the bullions of gold in the National Bank of Ethiopia were fake would be funny if it were not tragic. Gold reserves and bullion in every central bank is considered the very basis upon which fiat money is issued with confidence.

Because all the facts are not out yet, I must be circumspect but this tells any curious student two main things. First, corruption and incompetence in the public sector can be quite baffling and the third is that considering that Ethiopian currency, the Birr is one of the stronger ones in the east African region, then the currency market is all about faith and perception. The gold standard is really dead! Consider that all this happens when the price of gold is rising.

Paying For Windows Vista

My personal preference in the use of computers is without doubt the Mac but I hasten to add that in my professional work, I bow readily to the ubiquity of PCs. So i tend to use the Mac at home and the windows-based PC at my place of work. As with most people, computing life started with the PC until I came to the realization that it is highly unlikely that windows will be sufficiently safe, convenient and stable enough to meet my overwhelming approval. I realized pretty late that given the wide use of the Windows operating system means that it must trade off some safety and stability to make it conveient for use by novices.

A story appearing on the NYT states that even influential managers within the Microsoft Corporation faced serious difficulties with functionality of the Windows Vista. Randall Stross carefully dissects the material presented at a lawsuit against Microsoft regarding the weaknesses of Vista against the guarantees that were promised.

Reading through the story as stated, one may come to the sensible view that the deadlines linked to the launch of this product ensured that it was released well before it was sufficiently refined in order to meet the expectations that consumers had. Besides the confusing labels such as "Vista Ready" and "Vista Capable", I am convinced that the internal communication reveals that in spite of the disappointment, the decision to go ahead was not necessarily an easy one.

Still, the main lesson for this blogger is that the mechanism for pricing of software is completely wrong-headed. This is because the later versions that are more stable are cheaper and carry larger discounts. Early adopters, who pay most of the initial costs and whose troubles and mishaps help in accumulating knowledge for plugging the gaps and correcting the mistakes get a very bad deal. Is there no reason why the early adopters should be made to understand that the initial versions of the software are really beta versions and that they will without doubt suffer from instability and compatibility problems? In exchange for this admission, the guinea pigs ought to get a significant discount since the feedback from them would probably lead to the betterment of the product which would perhaps increase demand. Come to think of it, the upfront discounts would not be appropriate perhaps because software companies such as Microsoft have to ensure that they make the most money from the first versions before the pirates cash in.

Does This Fake Ferrari Harm Sales ?

This blog featured a post about a dispute between Ferrari and a customer who extensively modified a genuine Modena 360. The thrust of the claim by Ferrari was that the modification resulted in a non-genuine car that should be stripped of the recognized car maker's logo. This blogger argued that the demand for a genuine purchaser of a item to alter his property by accommodating the demand for removal of that logo is at odds with the right of the purchaser to utilize his property in accordance with his wishes. Having sold the vehicle and received its full value, there ought not be any further demands on the manner of its use and modification.

It appears that that that was an even simpler case because there is now a fake Ferrari P4 made in Thailand that is on display in Brussels. The interesting bit from the story is that this is an imitation of the classic model and is run on a Subaru engine. On this occasion, there may be a weak case for limiting the ability of the constructor of the fake Ferrari to pass off. the surprising fact though is the wholesale conflation of the dangers of pirated goods and the false analogies with fake medicines. That the Authentics Foundation has to use a fake Ferrari to make the case for counterfeit drugs is an exhibition of the weakness for stricter IP claims especially regarding electronics and other goods. the connection that is being suggested here is spurious because counterfeit medicine is harmful not because its manufacture are intent on undercutting excessively priced branded names.

In my reading, the broad trend here is that as technology improves, there will be individuals with the ability to create imitation products and that their number will continue to rise. what is clear is that the corporations such as Ferrari would spend their money to improve the recognition of authentic products and spend less money and time on fighting the aspirational imitators. Indeed, public resources should be used sparingly in the quest to fight product piracy. As for the aggrieved corporations, I am unconvinced that these fake Ferrari's really hurt either the sales or the image of the authentic ones. To insist on wiping them out and making analogies with dangers to health from fake drugs is the disingenuous quest to extend the reach of IP regimes. As it is, any purchaser of expensive and genuine products could affordably verify authenticity by starting with the tips at the Authentics Foundation site.

Who Owns This Modified Car?

An interesting story appearing in the Times here, illustrates the absurdities that arise form an exaggerated extension of the concept of trade marks. While Dan Cawley legitimately purchased a Ferrari 360 Modena and paid its full costs, the corporation is intent on restraining him from the uses to which he can apply his property. I am surely at a loss as to what the corporation thinks it is protecting by starting a fight with its client for modifying the vehicle, which has become almost beyond recognition as a Ferrari 360 Modena.

Granted that Ferrari may have property rights in its unique trade mark, I am almost certain that anyone who qualifies to be their client would notice that the limousine that Dan Cawley has created is not a Ferrari at all. I think that this aggressive application of IP rights ought to fail. As Dan Cawley states, he ought to be able to make any modifications to his property as he wishes because in spending the many Sterling pounds that were exchanged for the car, he acquired exclusive right to it. That modification leaves Ferrari with no loss save that Dan has probably compromised the stability and performance of his own car.

Use Chemistry to Determine Alcohol Taxes

The one area in which governments receive little resistance when applying taxes is in respect to alcohol and cigarettes. It is almost taken for granted that there is justification for hiking taxes on these two since they are not considered completely essential. In the UK in particular, one of the debates has been on applying taxes to the category of alcoholic beverages known as "alcopops". This is a category of alcoholic beverages that are sometime brightly colored and altered taste but do have a significant alcoholic content. the conventional wisdom is therefore that this leads to the consumption of a higher quantity than would be otherwise consumed.

In this news item, the Conservative Party of the UK is now proposing to raise taxes substantially on this category of alcoholic beverages because they are argued to cause binge drinking. Indeed, the major argument is that this category of beverages are problem drinks and that increased taxation on them would be used to reduce taxes on the others.

Apart from my curiosity about the tag "problem drinks", both parties seem to be unwilling to correctly define the problem. To my mind, the issue is not the consumption per se, but the quantity that are consumed. the appropriate response would be informed by the realization that "alcopops" may merely represent a concentrated form of alcohol. A better way to consider taxation of alcoholic beverages is to calibrate taxes based on the quantity of alcohol by volume irrespective of the name of the product. In that way, there would be no need for the cross-subsidy but all consumers of alcohol would pay taxes in accordance with the quantity of alcohol that they consume as opposed to brands that they chose. After all, inebriation results from the amount of alcohol ingested and not the name.

Record Crude Prices: whose benefit?

Sometime this week the real price of a barrel of petroleum reached a new record when it momentarily surpassed the highest price set in 1980. Due to the fact that the main producers of crude petroleum are a concentrated club of countries, one sees this new price as a necessary boon to the countries and by extension, to their citizens. Yet it is not always so.

High prices may be good for producers but the economies of most petroleum producers are characterized by subsidies for petroleum fuels and other basic commodities. So while food prices have risen dramatically in countries that import petroleum fuels, these price increases have began to affect the economies of petroleum producing nations. This story in the NYT illustrates clearly the fact that producers of petroleum and other commodities are not immune from these dramatic inflationary pressures. The reason is simply because given its uses in industrial manufacturing and transportation, energy costs are a major driver of inflation in a large number of countries. Added to this is the tendency for most of the petroleum producers to peg their currencies to the US dollar which has been dominant world currency but is presently getting weaker relative to alternatives.

In order to forestall further unrest, the governments are taking the option of either extending the subsidies or raising wages for public sector employees. This is surely no solution because these subsidies can only be maintained for as long as the prices of crude petroleum remain high and the accumulation of reserves continues. What one can be certain of is that the prices cannot remain this high for the long term. Granted that there's no silver bullet, the solution lies in structural reform of these economies and yet this is unlikely when crude petroleum prices remains that high.

Cash for The Girl Child

A common characteristic of underdeveloped societies is the bias that families show towards male children and adult males over their female equivalents. While few people still argue that this bias no adverse developmental effects, it has been found that the mere identification of that fact and injunction to families to treat both sexes equally hardly suffices.

A story reported here, shows that the government of India has initiated an experiment to raise the value of the girl-child to families by providing a number of incentives intended to ensure that certain desirable benchmarks are met. As it states, the state undertakes to provide direct cash incentives for families to ensure that their girl children receive vaccinations, are retained in school and eventually delay marriage until they are at least 18 years old.

While one may object that no parents ought to be "bribed" to provide equal chances for their children, I am fully in support of this idea because the children will invariably benefit from this irrespective of the biases that their parents may hold. With the commencement of the "Dhan Laxmi" pilot scheme through 11 blocks in separate states, it is possible to track the uptake and the benefits and measure the effectiveness of the programme through a randomized study. I will preempt the results by stating that this is in most probability a good investment in Indian children. The rest of the world should watch keenly.

Quoting Philip Musgrove

"Of course, what economists think they know is often a mixture of what they know and what they only think, including their more ideological positions and beliefs." Philip Musgrove, In, Health Economics in Development P.24