I’ve been in Melbourne for the last few days, giving seminars at university departments and talking to people at the Productivity Commission and a roundtable the ACCC. The ACCC event had some very interesting discussion of behavioral economics and its implications. When I get time I’ll do a post on it.

Meanwhile, the Internet has given me nothing but problems. I was trying to deal with comment spam and anti-spam overkill on flaky dialup connections, which was no fun at all. GMail was horribly slow and unresponsive. Then when I got home I got the news that Crooked Timber has been shut down by our hosting service for overloading the database.

All back to normal soon I hope.

Education and central planning

The argument about Voluntary Student Unionism is interestingly summed up by a letter in today’s Age, supporting the government. The writer, an employer, asks us to imagine the outrage that would arise if he told his employees that they had to pay $500 in return for a range of the kinds of services typically provided by student unions.
Read More »

False positives

Apologies yet again to everyone having trouble posting comments. My anti-spam software is too aggressive, but as soon as I relax it I’m flooded with spam. I’ll have another go at resolving this as soon as I can get some free time. One suggestion that seems to work for some is to use a different email address. If you can’t get through you can email me directly and I’ll post your comment when I get time.

On the internet, nobody knows you’re an LWLB

Not surprisingly, a lot of bloggers are concerned about this report suggesting anyonymous blogging on political topics may be illegal. I had a few thoughts on this.

Closest to home, while I’m not anonymous[1], I welcome comments with or without anonymity. I don’t think there’s a problem here – any comments on this site are “authorised” by me, although I may not agree with them. As I’ve mentioned a few times, I reserve my right to delete or expurgate offensive comments, though there may be a delay for one reason or another.

Second, I don’t think it’s sensible to assume that the Internet is some kind of special free-fire zone where ordinary law does not apply. If a rule is right for print on paper, it’s probably right for text on a screen. If it’s wrong for the Internet, it’s probably wrong as applied to pamphlets.

Third, if a natural reading of the existing law is that it’s illegal to publish your political opinions under a pseudonym, the obvious question is: Why? I can’t see any possible justification for such a rule. It seems reasonable to prohibit dirty tricks like publishing something purporting to represent the views of your opponents, but the general tradition of writing as “Cicero” or “A modest member” is a well-established and honorable one. The idea that special rules are needed during election campaigns is an outdated relic, the kind of thing that used to give us a three-day blackout of electronic media.

Finally, where does Misha Schubert get off putting bloggers and spammers in the same headline? Maybe I should write something saying “state governments are considering uniform defamation laws, which would apply to journalists and spammers”.

fn1. That is, unless you believe the rumours that I’m really Imre Salusinszky posting under a false name and picture.

Negative income taxes

Reader Hans van Leeuwen wrote to ask about the Negative Income Tax which is one of those concepts that always seems to be discussed in favorable terms but never makes it on to the policy agenda. The basic idea, due to (or at least put forward by) Milton Friedman is that the tax system should consist of a flat grant and tax levied at a proportional rate on all incomes. The ‘negative’ part comes from the fact that people on low incomes would get money from the government and would therefore pay negative tax.

I’m sympathetic to the general concept, but I think it’s necessary to take the whole tax-welfare system into account. The implied objective then is to make positive transfers to low-income individuals and families while giving everyone roughly the same effective marginal rate of taxation. From this perspective, as the OECD noted the other week, the big problem is high effective marginal rates of taxation for low-income and middle-income families.

This is a difficult problem because, in general, I would like to make the grant component large for families with children (a view shared by government). It’s difficult to do this, apply a common marginal rate and hold the cost to revenue of the initial grant down to an affordable level.

The national comparisons game

Tim Blair points to this exercise asserting that the EU is twenty years behind the USA. As Tim subtly points out, it’s absurd to suggest that the EU today (home of Nokia and Airbus, and birthplace of Linux and the World Wide Web) is comparable to the US when Atari boxes were the state of the art. Unfortunately, Tim’s irony is lost on his commenters, who assume the report deserves to be taken seriously.

To ram the point home to his slower readers, Tim might do well to point to the fact that, in terms of output per hour, several European countries are ahead of the US. Of course, when hours worked are taken into account, the US regains the lead, but on that criterion, Britain during the Industrial Revolution was ahead of any modern country.

The real point is that productivity differences between modern economies are so small that, by selecting the right criterion, any developed country can be made to look better, or worse, than any other. The report is explicitly described by its promoters as a “wake-up call” designed to scare Europeans into adopting the policies favored by its promoters. Having seen this kind of thing going on since the 80s, when Australians were terrified with the prospect of becoming the “poor white trash of Asia”, I find such reports more soporific than alarming.

There’s something about royal visits …

… that reduces presumably rational people to babbling incoherence. In today’s Age, Christopher Scanlon of RMIT writes

Australians want monarchs who maintain the fantasy of monarchism, who embody the impossible ideal of monarchy …The problem with the Windsors is that they’re just too much like us. Their lives are as complex and contradictory as our own. And because of that they’ve soiled the fantasy of monarchism as some kind of divine state.

and two paras later

The Danish royals appear enough like us to be comfortable; they’re not aloof like those stuffy dysfunctional Windsors.

BTW, I found the same problem myself. I was going to write on this topic and suggest that we pass our own Act of Succession, offering the Australian throne to the highest-ranking European Royal willing to marry an Australian[1]. I thought this would go over well with both monarchists, republicans who care only about having an Australian head of state, and aspiring princesses/princes, between them enough to make up a majority. Then I realised that, unless the legislation was drawn up carefully, we might end up with Prince and Princess Michael.

fn1. I see Mark McKenna has much the same idea.