Buy Soccer Players Now

One of the most fascinating things for sports fans is how the main the managers and coaches make decisions for recruitment of players. related to this is how fans and enthusiastic team owners judge the performance of players. Recently, I read this book by Simon Kuper and Stefan Szymanski and confirmed a number of things about the management and economics of soccer. The authors use as data analysis approach to answer a number of questions that many soccer fans and club managers consider as obvious.

Among the nuggets of wisdom is that the choice of players is not as objective as should be because clubs overpay for blond players and those who have performed well in a major international tournaments.  with this in mind, I have been setting my eyes to see whether managers will again be fooled by performances during the World Cup tournament in South Africa in June. Arsene Wenger, the manager of the Arsenal Football Club has just confirmed that he has commenced negotiations for players and expects to conclude discussion before commencement of that tournament. Indeed, he states publicly that his intention is to avoid the inflated prices that would result from performances during the tournament. the authors mention that this is one of the mangers who trusts data and his economics reasoning above the conventional wisdom. What surprises me is that there will be the inevitable scramble for a few players who perform well after that tournament while the information shows that that is a poor predictor of longer-term performance.

Full of PowerPoint

One thing for which I give credit for professionals in the military is that they understand the need for clear communication. I am not surprised therefore to read here that the US military uses PowerPoint presentations a lot in explaining strategy and for information across ranks. And yet the story emphasizes that a number of officers are frustrated with the uses of PowerPoint as a tool because it fails to capture detailed connections between separate ideas.

As I see it, one is bound to suffer frustration with a tool such as PowerPoint for a number of reasons. the first one is that many people who use the facility forget that it does not dispense with the need to communicate clearly. And so choice of flashy slides is good but that still requires that the presenter should understand the substance. So I cannot be as sure as some people are that Power point is the problem though I have seen enough people forget that it is a tool for communication that should be used with a lot of forethought.  I favour power point in situations where there is limited time as it may help one to construct the presentation by thinking in a sequence. It may just be that the tool is inappropriate for certain levels of communication.

My Forgotten Mathematician

In the last blog post here, I referred to an article in the Guardian that classified the author's mathematicians of all time. In addition, I commented on the fact that there were a number of mathematicians that i would include in the list in addition to mentioning the paucity of female mathematicians and higher order thinkers on that list. Having reviewed that hurriedly-written blog post, I note immediately that I mentioned two mathematicians that would fit in that list. This was an incomplete list because John Nash Jr. and John Von Neumann are contemporary scholars of the subject and whose works are largely related.

So I would like to add the mathematician known as the "Father of Algebra" whose contributions to the study and documentation of mathematics are enormous. Besides contributions to algebra, cartography and astronomy, this individual is credited with the introduction of Indian numerals and the decimal number system to mathematics. The significance of the decimal system and algebra makes him worthy of as much recognition as many on the list on which my last post was based. To my mind though, I am most pleased that one of my favourite words, "Algorithm" is derived from the name Al-Kwarizmi, the scholar from the House of Wisdom in old Baghdad. His contributions were recognized by the Soviet Union in the issuance of the commemorative stamp for Al-Kwarizmi's estimated 1200^th birthday.

Guardian's List of Best Mathematicians

A couple of weeks ago, Alex Bellos put together this interesting list of mathematicians whose works he considered revolutionary. I notice that the list is merely placed in a chronological order but its contents are still interesting for a number of reasons. First is the fact that Pythagoras is recognized as one of the earliest mathematicians whose discoveries are still relevant and recognizable for students in formative school years in spite of the fact that most of his papers were lost and none is available for study today.

Secondly, it is noteworthy that the list has included a woman who would be recognized perhaps by only students of history of science or pure mathematicians. Political correctness aside, it is essential that the role that women have played in development of higher order thought be acknowledged purely as a matter of historical record. Hypatia is worthy of being on the list.

Thirdly, I recognize a good number of contemporary mathematicians starting with Paul Erdos and Georg Cantor whose works would be readily available today even if a very small number would be able to plough through them. Unsurprisingly, Grisha Perelman is on the list and I am sure that his recent contributions and reaction to certain awards ensure that he will be in many lists for a long time.

Asking myself who I would add to the list makes a number of names run through my mind. Among them is Teano, who was Pythagoras' wife and co-thinker in the academy. More recently, I would highly consider John Nash Jr. and his colleague John Von Neumann who made the subject of game theory an important part of modern thinking and scholarship.  

Confronting African Involvement in The Slave Trade

Many people who read dispassionate accounts of slavery are invariably appalled and shocked by the cruelty that accompanied the commoditization and sale of human beings by others. The phenomenon of slavery is one that makes me take a step back to ask where ethics and markets intersect. And any knowledgeable person also knows that the US paid a huge price in the Civil War before the issue was resolved in part. Many people in the US accept the moral error that led to the enslavement of Africans shipped onto the continent and were owned by a number of families and individuals.  An enduring though impractical argument has been that some reparations are due to the descendants of the slaves on account of this moral crime.

In this article, Henry Louis Gates Jr. has confronted the less acknowledged side to the story of the huge market of slavery before abolition in Europe and the American continents. That truth is that a large number of African kingdoms willingly conducted raids and built fortunes through running huge slave markets. As the article reiterates, most of the slave merchants simply appeared on the ports and few ever entered into the interior in large numbers. Understandably, this complicates the demand for reparations because all of Africa has cast itself as a victim of the great injustice based entirely on racial prejudice. Still, I find that while Henry Louis Gates Jr. has exposed the ability of Africans to stand eyeball to eyeball with the contradiction with the main powers from Europe bearing most of the shame. The missing story is that of Arab collaboration in the slavery movement especially in the North and eastern coasts of Africa. To my mind, too often the equally brutal role of the Arabs in Africa is easily forgotten or subsumed in the story about the transatlantic slavery. Unlike the professor, I am less confident that President Obama's involvement will end the blame game and so I only wager that the history be taught with high fidelity to facts.

Rent or Purchase

Granted that the discipline of economics assumes rationality on the part of most individuals most of the time, there are still a large number of myths and legends that inform people's action in markets. Reading through David Leonhardt's piece in the NYT reminds me of one that is most pervasive. Several months after the economic crises that engulfed most of the economies whose citizens earn high incomes, it is still taken as an article of faith that home ownership is much preferable to renting at any time.  I find that it is just so difficult to convince people that rental and ownership are alternatives that are dependent on the circumstances both of the individual and the overall market conditions.

In the piece, the author states that rental versus outright ownership requires a rough calculation of the ratio of rental to that of purchase. While it is not an iron law, it easily demonstrates that by dividing the purchase prices to the annual cost of rental is a good guide about the better decision to make. An index beyond 20 shows that the rental may be a better decision on the margin than ownership. So the instinct to purchase and be a home owner is strong but that should not make one opt to own a house by all means. And this is not advise that only favours the individual who is considering purchase because the same index suggests that an owner may sell to an unwise buyer when the ratio would call for renting instead.  

Bring No iPad Here

If someone asked a question about which state would try to impede the use of the iPad by its citizens, I would not think that Israel would be it. And yet this story in the Washington Post reports that the Middle East's most astute government in economic policy has just done that. I do not fully accept Israel's policies in the political field but its economics and approach to technology is something that I have lauded here before. And that is why I find the reason given for refusing to allow entry of the iPad into the country completely puzzling for its wrongheadedness. What's really happening?  

A Study on African Land Deals

A while ago, I wrote to blog posts here and here on the trend for corporations to approach governments in Africa to allow investments in agriculture through long-term leases. As I called, it then, this land rush was a new area and one in which the investment model was particularly susceptible to local politics and related political risks. I may not have stressed sufficiently but it was clear that this was one area of international public affairs that had not been more incisively examined.

I have just encountered a most professional attempt to by the IIED here to create an understanding of the phenomenon of huge investments in farming through land leases in Africa. The study confirms my thinking that the political risks are real and will ultimately determine the returns to the investments in addition to the fact that the credibility of the governments is questionable because the contracts are highly secretive. This lack of transparency undermines the good faith that citizens of these nations may have for a new investor.

Less convincing is the suggestion that governments should ask hard questions of investors in addition to determining whether land acquisition is meant for speculative purposes. My view is that most governments will have an incentive to record any new investment and that added to the lack of disclosure on the agreements raises the likelihood that the agreements will be skewed and the lease terms will be very low. Overall, the dearth of information on the subject makes the report immensely informative even if its prescriptions are not wholly palatable to me.

Absurdity of Gene Patenting Demonstrated

Following my blog post here on the judgement that gave a much appreciated push-back against broad patenting of genes, I have come across a number of other comments on the implications. Ben Goldacre's article in the Guardian makes me revisit the question because he cites a data-based study that demonstrated the absurdity of allowing such broad ownership over pre-existing genetic matter in humans. In short, the paper that he cites suggests that the patenting of this single genetic sequence makes it impossible to conduct research not only on breast cancer but on a wide number of other genes in every human being. In short, the genetic sequence and its components occur so regularly that it extends to virtually every gene in every single human being.  If one needed evidence from data and basic science that this form of patenting is absurd, then there it is.

Hidden Subsidy and Corporate Perks

One of the most interesting things about any tax allowances is that it does not necessarily eliminate that tax but most likely would transfer it to a separate payer. This fact has been aptly demonstrated in this NYT article by Richard Schmalbek and Jay Soled. The essence of their correct argument is that the decision to allow corporations to deduct the purchase price of baseball tickets from their taxes has not only altered the nature of the crowds attending sports events in the US, but has also driven the inexorable upward trend in ticket prices.

The complete argument goes that these firms are less sensitive to the prices of tickets because they can make total deductions of the prices from their overall tax liability. The unintended consequence is that best seats for sports events are purchased by these competing corporations, with the higher prices of seats conditioning sports franchises to create profits while reducing the sizes of the sports arenas. In spite of the soundness of the economic reasoning in the piece, I am less convinced that the reform of this distortion is necessary primarily to alter the composition of the individuals attending games. The best argument is that government ought not to redistribute taxes through firms that are trying to entertain their clients.

This case of applied economics shows how difficult it is to design tax breaks and how the resulting distortions  can have indefensible consequences.  

Gary Becker on Interest Groups

"The idea that interest groups can derive specific, concentrated benefits from the political system—yes, that's a very important insight," he says. "But you can have competing interest groups. Look at the automobile industry. The domestic manufacturers in Detroit want protectionist policies. But the auto importers want free trade. So they fight it out. Now sometimes in these fights the dark forces prevail, and sometimes the forces of light prevail. But if you have competing interest groups you don't end up with a systematic bias toward bad policy."- Gary Becker