I’ve been critical of the UAW grad student union at UC Berkeley for some time. While I’m generally skeptical of the (direct)¹ benefits of unions I think there is a plausible argument for graduate student unions as well as unions in potentially hazardous working environments, professions with particularly low liquidity or those employing illegal workers². In potentially hazardous professions unions serve an important social good by mitigating the harm of many people’s irrational tendency to underestimate risks in familiar situations. Left up only to the free market I suspect that people’s desire for the immediate reward of high pay would often encourage them to accept jobs where the risk of serious injury outweighed the reward of increased pay. This is obviously not the case for grad students but there is a similar problem of hidden risk. In particular graduate study is only a worthwhile payoff if one truly receives a diploma meaning that every year spent in graduate school is effectively a deposit of resources into the university that goes uncompensated should you not graduate. Just as people’s irrational failure to take into account future risk of death can justify the otherwise inefficient mechanism of union bargaining so too can their irrational failure to take into account the risk of either not graduating or receiving poor recommendations if they don’t do excessive lab work for their mentor justify grad student unions. Somewhat counter-intuitively I take the primary benefit of unions at this stage in US history to be their role in restricting employee choice. That is by preventing employees from agreeing to certain arrangements (yes I’ll work this dangerous job for more cash or I’ll do 80 hours a week in lab for a good recommendation) they prevent employers from providing incentives that prey on human irrationality.

I recognize the benefit the UC grad student union provides for many grad students in this fashion (thankfully not truly necessary in math) and since I think TA’s here aren’t paid nearly enough I remained in the union despite a certain skepticism of it’s political policies and role in restricting differential grad student pay for different departments. However today I finally sent in an email asking to be removed from the rolls when I saw the most recent bargaining update they released. I provide the full text after the break but the section that really drove me to ask to be taken off the roles was the following:

CHILDCARE: the administration rejected our proposal to subsidize employee childcare costs though they recognized the need for a childcare program. One university spokesperson accurately characterized our proposal as “a subsidy program to enhance an [employee’s] ability to matriculate, be gainfully employed and contribute to the mission of the university.” The next day, another university representative, in rejecting our proposal, said, “The University believes that there are sufficient child care resources provided to most of the individuals that you represent, and those programs are both effective and cost effective . They provide services at a reasonable cost, recognizing the financial needs of the students.” This remark displayed an arrogant disregard for the realities of life for teaching assistants, readers, and tutors with children, who more often than not face lengthy waitlists and programs that absorb at least half of their monthly wages.

I have every reason to believe that grad student pay is a zero sum game. Every dollar the UC spends to increase child care resources is one less dollar that can be used for other sorts of graduate student support. Thus by taking the position they have the union is basically advocating for a transfer of money from my pocket to the pockets of people with families.

Now I don’t have anything against grad students who choose to raise families and I sympathize with the fact that it is very difficult to raise a child on a graduate student’s salary. However, it’s also fucking difficult to try and afford frequent plane flights across the country to maintain a long distance relationship. I’m sure it’s equally difficult to try and visit sick relatives, help with the family business or any other major life choice that requires money. Now I could see an argument that certain sorts of life choices tend to produce more utility so we should subsidize those at the expense of people who would use their money to go skiing in Vale. Yet on such a theory it should be relationships, which have a much stronger correlation with happiness than children, that should be supported and I have no doubt the number of grad students at Berkeley in long distance relationships is of the same order of magnitude as those who have children.

Now someone is undoubtedly going to say something about women running out of time to have children but I would argue that relationships, not reproduction, is the truly time sensitive concern. Very few women in grad school are anywhere near menopause and upon graduation they can still choose to reproduce but once out of grad school your ability to meet worthwhile new people plummets. Sure you could argue that once out of grad school it is very difficult for a woman to have a child without taking damage to her career but it is misleading³ to suggest this is a gender equity issue and uncompelling compared with the unconditional increased difficulty of meeting a significant other outside of school. Now I certainly agree that academia unnecessarily penalizes people with competing interests such as child care while they are young but if anything academia needlessly penalizes relationships with other academics more than it does reproduction. In other words every valid concern about fairness or individual utility that favors subsidizing childcare also favors subsidizing my plane flights to Boston as well as many other life choices.

What then about the argument that affordable childcare is needed for the child’s wellbeing? This might be a compelling argument if we were talking about a group besides grad students but while expensive child care might burden the grad student it is unlikely to cause the child to be neglected or otherwise suffer. Given the various studies suggesting that the difference merely adequate and excellent parenting makes in quantitative measures of a child’s future success is quite small this argument just doesn’t hold water for grad students. Grad students are the one group we can count on to delay having a child or rearrange their lives to make sure the kid isn’t neglected.

What then about the final argument that we need to encourage more grad student types to reproduce. I think this is the only plausible case to be made but I no longer think it is compelling. The idea that we need to encourage smart people to reproduce as some kind of selective breeding program seems to make a subtle mistake about the way natural selection works. In the long run evolution will either manage to put together the little tweaks that make grad students smart with a strong desire to reproduce or it will find a better unrelated path toward intelligence. As far as the near future I don’t see subsidies for grad student families making huge differences in the electorate but I do see social benefits accruing from discouraging academic women to reproduce. Certainly anyone who believes in the role model theory for affirmative action should think that the more we can do to discourage women from opting out of academia for children the better. In fact anyone who believes that women are somehow triked or brainwashed into taking more than their fair share of childrearing should oppose this sort of reproductive support on the grounds that it reduces the unfairness and works to eliminate the stereotypes that caused the problem.

Ultimately I was uncertain about my support for the UAW grad student union in the first place and this message finally convinced me that my membership was doing more harm than good. The university doesn’t even want to go back to the days where biology grad students could be made to work 80 hours a week but my support for the union signals my acceptance of fucked up feel good policies like prioritizing families over the childless and silly demands for equality between the summer session and the school year⁴. Since the union isn’t going to disappear all my continued membership does is help convince the union and the university these stupid policies are what the grad students want. Besides I just feel dirty being affiliated with a organization that not only makes such unjustified policy demands but also alleges “bad faith” on the part of the university for simply believing that the union’s positions aren’t correct.blah⁵

(more…)

Recently I’ve been thinking about the Americans with Disabilities Act (ADA) after running across a couple stories about ADA lawsuits.. The first example was a decision by the ninth circuit to classify a disability rights advocate, Jarek Molski, as a vexatious litigant. Mr. Molski, is a very very controversial and polarizing figurewho has made a vocation of searching out businesses to sue for ADA violations (but clearly went to far when he badly faked injuries). The other case I read about is someone suing the apple store for having counters and product displays that are too high and passageways that are too narrow for wheelchair based customers.

I’m well aware that these are surely unrepresentative examples of ADA litigation but Mr. Molski’s pattern of lawsuits makes one wonder about the wisdom of making every business be equally accessible to the disable. Presumably we would all be better off if we could concentrate the same amount of resources in the places they were most needed. On the other hand the lawsuit against the apple store make me think about all the businesses or aesthetic visions that ADA liability might render totally uneconomical or impossible, often with absolutely no benefit to the disabled at all.

It seems that the ADA is a model for wasted cost and effort. Like price controls it creates waste by mandating a one size fits all solution and creates compliance costs (see this post) not to mention the wasted hours filling lawsuits. So I propose instead we uniformly tax retail businesses at a rate of about what complying with the ADA would cost them (or maybe less) and then give that money directly to the disabled. Obviously this would require some bureaucracy to determine who was disabled (and to what degree) but that would be offset by savings in the legal system and other avoided inefficiencies.

Disabled people could decide whether it was worth more to them to use this money to pay a premium for products sold at accessible stores or if they would rather hire an assistant or tough it out and take trips to Hawaii. Since people with disabilities would receive extra cash on the order of the cost of complying with the ADA and concentrate that money on those features that mattered most to them they should be able (if they wish) to buy even more accessibility then they have now.

Now I realize that politically this is probably infeasible. For some reason people don’t seem to mind the government wasting money by causing many individuals inefficiency through regulation the way they do through taxation. It’s the same reason no one likes the idea of letting the EPA buy/contract to protect wetlands and other habitats instead of regulating to protect endangered species¹. Also I’m not totally convinced it would be better if implemented. Perhaps the irrational way people tend to relate to money would mean this actually lowered efficiency.

Instead maybe it might be better to try a cap and trade version of the ADA. Define what it is to be a violation and let businesses purchase exceptions on some sort of market (maybe even give disabled people a way to vote and influence it). But it just seems so crazy to solve the problem the way the ADA does, especially when it doesn’t seem to actually guarantee that the disabled can count on everywhere being accessible. At the very least we should be considering these alternatives.

I recently ran across an article on slashdot discussing the payments that hotmail accepts from businesses to have their email whitelisted and (indirectly) links to editorials praising and denouncing the 2006 deal AOL and Yahoo struck with goodmail that allows businesses to pay a 1/4 cent fee per email to guarantee their email makes it past spam and volume filters. Now I’ve been vaguely aware of calls to combat spam with micropayments for some time but this prompted me to actually take a look at some of the more carefully designed proposals for email micropayments. These schemes actually manage to answer many of the common worries about email micropayments (if really implemented). However, while I’m generally a big fan of clever economic/incentive based solutions to social problems, it seems to me that micropayments for email are a fundamentally flawed non-solution to the problem of email spam. In fact it’s far from clear if they would reduce the total amount of junk mail at all and even if they did the trouble they cause and risks they pose outweigh any benefits.

(more…)

I can’t believe this gas temperature thing is still an issue but apparently it’s even being investigated by congress. Either congress needs a lesson in economics or the media is misrepresenting their findings since apparently they found that the lack of compensation will cost the American consumer 1.5 billion dollars this summer. In my last post on the subject I argued that the hot gas issue shouldn’t make any difference because the extra profit the gas stations make just gives them extra room to lower the prices. You can look there for that argument here I want to address what appears to be the other side’s compelling argument: the gas industry must be swindling us because they install compensators in Canada and compensate on the wholesale market.

Let’s first deal with the wholesale market. Unlike the consumer market wholesalers set standard prices for a gallon of gas which apply throughout the country (or at least large regions). This means if they did not compensate for the temperature change gas stations in warm climes (and ultimately consumers) would end up shortchanged. The situation is different for gas retail where the price is set by your local gas station. If the gas stations in warm climates are giving less gas to the consumer per gallon that just means gas stations in those areas can price their gas more cheaply. In other words the local nature of the retail market lets them compensate for location based differences while the wholesale market does not. Also one needs to take into account the fact that the wholesale market needs fewer compensators and likely experiences greater variation in temperature (above ground trucks versus underground tanks) than the retail market.

Well then what about Canada? Now it could be that gas stations there follow a different model but for argument’s sake let’s assume they work like they do in the states. What could explain the fuel industry’s desire for temperature compensators in Canada? Well simple irrationality is always an option. The gas industry in Canada might very well have been tricked by the same kind of invalid arguments at work here. Another possible explanation is that the fuel is being sold at a temperature significantly above the average temperature in Canada. Thus by mandating temperature compensation the Canadian fuel industry probably reaped extra profits during the period of time it took consumers and the market to adjust to the decreased value in a gallon. Perhaps we could jigger up a one time transfer from gas stations to individuals in the US by setting the temperature standard to a lower than average temperature but likely gas stations would simply react faster when they need to change their prices to avoid losses rather than to minimize profits.

The ultimate proof that this is a false concern is that no one thinks the gas companies are being screwed over in the cold states like Minnesota or Maine. Should we compensate the gas companies in northern states out of tax dollars? If not why should gas companies compensate motorists in warm states?

I feel my last post needs a bit of clarification.

I was not and never have been arguing that the landowner has a just cause while the gardeners demands are unjust. I don’t think those distinctions are particularly meaningful or helpful. There are only better and worse choices nothing else.

Admittedly I do get pretty frustrated by the hypocrisy of the people demanding to use other people’s land to garden. As if they wouldn’t cry bloody murder if someone broke into their house and took their shit to give to people in the third world. Even if it was only their old LPs that they never ever play anymore. Short of bums and monks everyone in this country buys into the notion of private property and should at least understand why people feel upset when others take their shit without asking. If these people are willing to take the same attitude about what it’s fair for people in the third world to demand of (relatively) rich people like them as they do of even richer people I will eat my laptop. Even in berkeley and SF everyone I meet seems to believe that American’s come first.

The real point of my post was twofold:

First to point out that if your goal is more community gardens then the approach the people in both of these incidents have taken is extremely irrational. Whatever you thought of Horowitz’s behavior down in LA the best way to make sure other property owners would be likely to allow people to plant gardens on their property would have been to leave with the minimum of fuss and bother. This would make future property owners think they too could let people use their vacant land without fear that it will cost them.

In fact what would be best is for the community garden movement to create a set of standards about always trying to ask for permission first, always leaving without a fuss and so forth to reassure landowners. Just like the standards that govern camping (leave the place cleaner than you found it) and other groups who want to use other people’s land it is in your interest to reassure them that you won’t become a pest.

Secondly to argue once again that demanding particular things other people have that you want and using political or PR pressure to get them is not a good way to achieve public good in the long term. The reason so much of the modern world respects private property is because it leads to efficient economic development. Knowing that you own a particular piece of land and that shifts in public opinion won’t take it from you encourages you to develop that property. Allowing communities to just gain control of pieces of property arbitrarily and capriciously because they decide they want it (especially if it ends up costing the owner money) ultimately harms everyone in the long run.

Ultimately we do take from people to serve the public good. It’s called taxes. However, by being predictable and fairly distributed taxes allow us to take people’s money without as large a harmful effect to economic development or as much resentment. I think we ought to be doing a lot more for the public good so we ought to raise taxes. If you think more public gardens are worth the cost (whether to temporarily rent empty lots or to buy lots) then you should be lobbying for higher taxes and city programs to do just that.

If you aren’t willing (in general) to lobby and fight for higher taxes so we can buy these gardens with public money it seems you are tacitly admitting that the benefit from these gardens is not generally worth what they would cost. In other words they are only worth it when you make someone else pay the cost.

So whether or not the property owners were acting as perfect saints I am criticizing the behavior of many of the gardeners and their supporters for acting against their supposed long term interest. I am also rejecting the underlying idea that it’s reasonable to demand specific people or companies give charity for the public good. Instead we should ask what general policies are good and take from people in a fair uniform manner in order to support those policies.

So a couple days ago the SF bay guardian ran a story about a vacant lot in the city that people in the neighborhood had turned into a garden. The newspaper expresses bafflement that the property owner, upon visiting from out of town, demanded that the garden be removed and refused to discuss leasing the land. Though the article wasn’t clear on whether there was any offer to lease the land at fair market value.

It is easy to see why someone might be offended to find people using their land without even asking permission, especially if they demanded you let them continue instead of apologizing. However, what reason, other than pure indignation, might the property owner have to reject the lease? After all she isn’t using the land so even a below-market lease would benefit her and the gardeners would benefit as well?

Well perhaps the incident at the South Central Farm in LA provides an explanation. Now whatever you feel about the ultimate decisions of the landowner in that case and the ill-will that built up between the protesters and the landowner it is clear that having community gardens on his property cost him a great deal of money. While UC Berkeley’s status as a semi-public entity makes the situation a bit different you can see the same effect at people’s park. The longer a community, at least in places like SF and Berkeley, uses your land the more expensive it is to use your own property.

If the problem is vacant lots get a law passed about upkeeping them. If community gardens and other public spaces are really that important raise taxes and have the city buy the land. Also the more one demands that property owners let you garden their land the more incentive you give them to turn you down. The very fact that a petition was signed to continue this garden shows the landowner that in ten years when people have grown attached to that garden it will be very expensive to kick them out.

It never ceases to blow my mind how simplistically most people think of economics. From free trade, to sweatshops to corporate taxation I’m constantly amazed at how most of the support for one (and usually both) sides doesn’t go past a simplistic reaction to the emotionally salient parts of the situation. However, I think this lawsuit really takes the cake. It is a bunch of truckers and other consumers suing a bunch of gas retailers because they don’t compensate for temperature when calculating the gallons pumped (gas volumes are defined to be at 60F).

The allegation from the article is:

A database compiled by the National Institute for Standards and Technology found that the average temperature of retail fuel nationwide and year-round averages almost 65 degrees. As a result, consumers and truckers end up spending billions of dollars per year on fuel that they wouldn’t have had to pay for if gallons had been adjusted to the 60-degree standard.

Did it really not occur to anyone that gas is a commodity sold on the free market? Each gas station can sell the gas for whatever price they feel like and the consumer gets to decide where to fill up. Since the article acknowledges that NONE of the stations compensate for temperature the price comparisons between stations are perfectly valid. The only people who have reason to complain are those who are more likely than average to buy their gas in the afternoon when it is warmer.

Hopefully this lawsuit is just an attempt to extort money from the gas industry because it is demanding that gas stations add technology to compensate for the temperature. The net effect of which would just be to force gas stations to raise their prices to compensate not to mention passing on the cost of the pump upgrade.

What really annoys me about this whole thing is that despite hearing this from both NPR, and the link up top (and probably CBS as well) not one person even called attention to the obvious flaw in this argument. Screw calculus we should make undergrads all take an economics course.

When it was time to use my most recent audible.com book credit I decided to get Jared Diamond’s “Collapse” on audiobook. Not because I think it is a worthwhile read — I think it’s a simplistic prophecy of doom meant to sell books — but because a lot of people are talking about it and I wanted to be able to knowledgeably argue against them. Once I finish listening to the book I will post my thoughts about it, though having listened to three quarters of the book I doubt Diamond is suddenly going to abandon simplistic emotionally moving analogies and descriptions for the messy complicated details which would be accurate predictors of future events. However, even if I think it is misleading to suggest we can draw conclusions from vague conclusions about radically different societies (not in culture but in absolute level of technological prowess) their are lots of interesting facts and stories in the book. Information that can provide some insight into policy questions even if it is insufficient to make informed predictions about broad future trends .

One thing which “Collapse” really made clear to me is the ease and size of trade in pollution. In particular the movement of polluting industries and processes from first world countries which ban them to places like China which are happy to take the pollution in return for economic development. While this is exactly what one would expect from economic theory it is interesting to see that in the real world neither activism nor public relations concerns prevent it from happening. This effect has significant consequences for world wide environmental policies and raises the troubling specter that treaties and protections which don’t mandate third world compliance may actually make problems worse.

In particular hearing real examples of polluting technologies being moved to countries like China makes me think the problems with Kyoto are more than just pro-industry excuses. Since compliance with Kyoto is entirely voluntary for the third world (it is just a suggestion) it seems there is every reason to believe industries emitting lots of greenhouse gases will simply relocate to places like China. If these countries are willing to accept industries whose pollution will be locally concentrated why would they balk at those who emit greenhouse gases? Disturbingly the overall effect of moving emissions to places like China could be more pollution not less since industries relocating to the third world wouldn’t have to comply with even the relatively week pre-Kyoto environmental requirements, i.e., they could avoid implementing even relatively cheap anti-pollution technologies.

At the very least I think this gives strong reason to be skeptical Kyoto or similar first world only treaties will be effective in combating worldwide environmental concerns. Such treaties may still be valuable as a stealth form of developmental aid to the third world but the environmental harm wrecked by industries moving to the third world to avoid environmental restrictions must be balanced against this benefit. Unfortunately the political will to craft environmental treaties that both prevent industries from escaping to non-signatory nations which will be fair to the third world just doesn’t seem to exist. Developing countries like China justly demand the same chance to become developed that the first world had and accepting stringent emissions requirements without significant compensation would substantially inhibit their development. The only palatable solution would seem to be massive compensation from the first world in return for environmental compliance but just getting voter support for measures to combat global warming is hard enough much less getting people to support paying massive sums to encourage third world compliance.

Even if curtailing emissions is the most effective way to deal with global warming it seems entirely possible that political reality might make this impossible. Therefore prudence suggests we need to continue researching engineering solutions which could avert global warming even if emissions continue. I very much doubt people will be willing to pay the costs necessary to fairly curtail emissions until they start experiencing significant hardship from global warming and at that point it will be too late to stop emissions.

So while wasting my Vegas winnings at the slot machines here in Reno I did some introspection about how I value money and why I enjoy gambling. Of course part of the attraction of gambling is just the fun involved in playing. This is the standard defense of gambling or playing the lotto against the frequent faux intelligent derision of the practice as irrational. However, I don’t think this response can stand on its own.

It seems that a key element in the fun of gambling is the fantasy of winning it big. Many people who won’t engage in even favorable bets with their friends quite enjoy playing the lotto or gambling in Vegas. If in fact it was just the thrill of betting at play we should expect people to find casual bets as appealing as the lottery. On the other hand if is the anticipation of future results shouldn’t a rational anticipation involve more dread than hope?

A sophisticated version of the standard explanation can explain this peculiar state of affairs. The line here would explain that gambling is a rational response to an essentially irrational human nature. Knowing that you are likely to overestimate the likelihood of very unlikely outcomes one might leverage this response to enjoy the fantasy of winning. No doubt this is part of the explanation but I think a fully rational agent might still enjoy gambling.

An explanation of this position follows and it rests on some subtle issues in our definition of utility. Basically there is a mismatch between our intuitive conception of the utility of some amount of money and the notion of utility the economists use. When we think about how much we would enjoy a certain amount of money we are imagining how much we would enjoy stuff with that price tag. The economic concept also asks us to consider how we might invest or even gamble with that money. Below I will spell out this point in greater detail and explain its relationship to the rationality of gambling. (more…)