Friday, March 21, 2014

Good things & bad things: competition and privatization

When I talk to students about anti-competitive behavior, I like to start with a stark illustration. There are lots of things firms might do in order to earn profit, and these things might be good or bad, broadly speaking. Profiting by producing a higher-quality product, or by producing at a lower cost than competitors: good things. Sending Fat Tony to threaten your competitors with violent death if they do not bow out of the industry: bad thing. The good things are profitable to firms because of the benefit to consumers that is generated, whereas the bad things benefit firms at the expense of everyone else. The purpose of competition policy is to preserve firms' incentives to do the good things and preclude them from doing the bad things. There are lots of complications, of course, making it difficult to sort out whether a particular strategy (e.g. a merger between two firms) is actually a good or a bad thing. But the basic idea is that when firms are doing their best to earn profit within the constraints of well-designed laws, their activities enhance consumer welfare.

The same question arises in the context of privatization. If some government-run entity, like a prison, is put into private hands, there is then someone who stands to profit if he does a good job of running the now-private entity. The hope is that a firm running a prison for profit will do good things for the sake of profits, like reducing costs, insofar as this can be done while still fulfilling the purpose of having a prison. I would guess that prisons are a target for privatization for two reasons: in addition to the general phenomenon of government agencies doing things less efficiently than private firms, incarcerating convicts is probably a relatively costly activity. Thus there would be a lot of benefit to be had by creating strong incentives for running prisons better.

Saturday, March 15, 2014

Four-way yields

There are a few four-way yields in my neighborhood, and I would guess that it is more often than not that they don't function as planned when two drivers approach the intersection at about the same time. Drivers generally seem aware of and willing to abide by a yield that occurs at an on- or off-ramp or some other place where two roads merge. At the four-way yield, however, I think that the typical driver's attitude is: "It's a yield, not a stop sign. Therefore, I don't have to stop." While technically correct, this ignores the whole point of the sign. One intersection in my neighborhood controlled by a four-way yield is the crossing of a somewhat busier street with a somewhat less busy street, and I have often seen drivers on the busier street cruise through the intersection totally unaware of drivers approaching the intersection from the cross street. That these intersections are mini-roundabouts with a big, round planting in the middle exacerbates the problem: even if the driver on the somewhat busier street notices the driver entering the intersection from the less busy street, the former driver tends to proceed into the intersection if he can do so before the other driver gets to his position, when the standard should actually be to yield the right of way to the driver that enters the intersection first. If the planting were not in the middle of the intersection, there would be no ambiguity about which car entered the intersection first and thus has the right of way.

Much better if these intersections had either two-way stops or four-way stops (or nothing). Whatever is this intermediate case that the four-way yield is supposed to cover, it isn't doing a good job of it.

Saturday, March 8, 2014

Antihero for president

I'm tempted to dub Francis Underwood the greatest antihero of all time, but I'll play it safe and say the greatest antihero in recent memory. What is so striking to me about him is that he is really a terrible person--over the course of two seasons of House of Cards, we see ever increasing levels of self-centered ruthlessness--and yet the viewer is on his side. I am, anyway; maybe not everyone sees him that way. I would particularly contrast him with Walter White, who in my view evolved from a hero to a villain over the course of Breaking Bad. His character is interesting in a very different way: we see a good man become bad, squandering virtually all of the viewer's sympathy by the end of the series (again, to me, but perhaps not universally). I can't put my finger on the difference in the characters' ability to evoke sympathy, since their misdeeds are fairly comparable. Is it Frank's statesmanlike bearing that does it? Is it his South Carolina accent?

Surely there has been much written about the antihero, from classical literature to modern popular culture, and I'm not sure how fairly Wikipedia represents all that; but I didn't much like the definition I saw there, and I had lots of disagreements with the list of antiheroes. Some of them (Satan) are really just villains; lots are heroes, with some complication of character or history not severe enough to warrant the "anti" (Shrek, Angel from BtVS, Oh Dae-su from Oldboy, Veronica Mars); and some are no kind of hero at all, just characters with some mix of sympathetic and objectionable characteristics (George Costanza, David Brent from The Office). There were lots of good ones there, though, like Jack Reacher, Tony Soprano, and Greg House: these are at least the same species as Frank Underwood, though not writ so large.

Friday, March 7, 2014

Ask a libertarian

Next time I encounter a libertarian who opposes some specific policy, like a gun-control measure or a financial regulation, I want to ask: do you oppose requiring cars to have license plates?

Monday, March 3, 2014

Homeline college

An article in the Chronicle of Higher Ed supports the idea of "Home College," essentially home-schooling for higher education: