Monthly Archive for August, 2013

Rational Riddles

Many years ago, when soft pretzels were available on every street corner in downtown Philadelphia at the going price of

Ten Cents Apiece/Three for a Quarter
there was one vendor who occupied a prime location in the City Hall courtyard, and was therefore able to command a premium price. His sign read
Ten Cents Apiece/Two for a Quarter

I always thought we could explain that one away as a case of poor math skills. But now our frequent (and frequently brilliant!) commenter Thomas Bayes sends along this photo of a sign that he recently spotted at a gas station convenience store, and which I’m finding a little harder to get my head around:

Thomas reports:

I asked the person behind the counter if she could sell me one pack for $1. She said no. I asked if she would throw one of the packs away for me if I bought two. She seemed genuinely puzzled. I drive an SUV, so I wish they’d apply this scheme to the gas they sell.

Here’s your chance to get creative. Give me an explanation consistent with rational behavior and orthodox economic theory.

Click here to comment or read others’ comments.


Power Transmission

Robert CaroAs I work my way through Robert Caro’s monumental four-volume biography of Lyndon Johnson, I’m repeatedly astonished by Caro’s gargantuan appetite for detail on the one hand, and his near total incuriosity about the big picture on the other.

Case in point: We get almost 40 densely packed pages on the appropriations (eventually totaling $25 million) for the Marshall Ford Dam and another 30 or so on what a dramatic change the dam (and the electricity it brought) made in the lives of Texas Hill Country farm families. But unless I overlooked it, we’re never told how many of those farm families were affected — and are thus left with absolutely no basis for thinking about whether this dam was a good investment.

At another point, we’re told of a $1.8 million expenditure to bring electric lines to 2892 Hill Country farms. (This is, of course, over and above the cost of the dam, which presumably benefited many more than just these 2892.) This time, thankfully, we are at least told how many families are affected. But since the expenditure comes to $622 per family in a time and place when one dollar a day was a good wage, where there was no running water and very little communication with the outside world, and where the soil was bad and getting worse, this raises the question of whether that $622 could have been better spent relocating that family to a better place. (All the moreso if we top off that $622 with the family’s pro rata share of the dam cost.) Caro never even acknowledges the question, pausing simply to celebrate the benefits of electricity, which, he seems to imply, were great and therefore (!) justified the expenditures.

Well, there are two ways you can get the benefits of electricity. The electricity can come to you, or you can go to it. Sometimes one way is better; sometimes the other. When conditions are as Caro describes them — with the land essentially worn out, starvation rampant, and everyone too poor to get a fresh start in, say, Austin — there’s a pretty good likelihood that the guy who could have helped you move, but instead spends a bundle to bring you an electric line, has something other than your best interests at heart.

I’m not far enough along to be sure of this, but after a little peeking ahead, it’s beginning to look like this is how Caro’s going to treat the Great Society also — hundreds of pages on the details of the legislation, hundreds more on the good it (allegedly) did, and not a single inquiry into how much more good somebody could have done with expenditures of that magnitude.

And then there’s this passage, which I feel compelled to assure you I am not making up:

Continue reading ‘Power Transmission’

Turtles All the Way Up

If you’re the sort of person who reads this blog, there’s a good chance you’re already familiar with John Conway‘s Game of Life. In case you’re not, here’s the executive summary:

Start with an infinite checkerboard. Color some squares black and others white. From here on, the game plays itself. Any white square with exactly two or three white neighbors stays white. All other white squares turn black. Any black square with exactly three white neighbors turns white. All other black cells stay black. Repeat.

The goal is to choose an initial coloring that yields interesting behavior, like a snail that crawls across the page.

But here’s the coolest one ever — the Game of Life plays the Game of Life:

Continue reading ‘Turtles All the Way Up’

Sun Burned

This is a picture of Jeffrey Punton, from my hometown of Rochester, New York, standing in front of the solar panels that he installed at a cost of about $42,500. He figures that over the long term, they’ll save him maybe $8000 to $10,000 in power bills. But he’ll only lose a few thousand dollars on the deal, thanks to about $30,000 in government subsidies — in other words, thanks to those of you who pay taxes. He keeps the panels up as a conversation-starter so he can educate people about how little sense these subsidies make.

The story is here.

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In yesterday’s post, I claimed to have refuted Richard Dawkins’s claim that everything complex must have emerged from something simple by citing the natural numbers, which are provably highly complex (in a very precise sense) yet did not emerge from something simple. Numerous commenters suggested that I’d been unfair to Dawkins, because he’d surely meant his claim to apply only to biological processes.

Here is a quote from Dawkins’s book “The God Delusion”:

Time and again, my theologian friends returned to the point that there had to be a reason why there is something rather than nothing. There must have been a first cause of everything, and we might as well give it the name God. Yes, I siaid, but it must have been simple and therefore, whatever else we call it, God is not an appropriate name….The first cause that we seek must have been the simple basis for a self-bootstrapping crane which eventually raised the world as we know it into its present existence.

I could provide additional quotes, but this one should suffice. Dawkins believes, unless I have misunderstood him completely, that he has a quite general argument, not tied in any way to biology (because the above quote, for example, has nothing to do with biology) to establish that complex structures must have simple causes. That argument, whatever it might be, cannot be correct because the natural numbers stand as a counterexample.

If Dawkins, or any of his defenders, wants to respond that his argument is not intended to apply to the natural numbers, it becomes incumbent on them to point to a hypothesis which is actually used in the argument which would rule out such an application. Absent such a hypothesis, the argument must be erroneous.

I claim to have explained in The Big Questions exactly how the first cause of our Universe could be a mathematical structure that is far more complex than the Universe itself; of course others, like Max Tegmark, have demonstrated this possibility in far more detail than I have. Whether or not Tegmark and I are correct in our beliefs, I claim we’ve at least demonstrated that (as far as we can tell) those beliefs could be true, which, once again, refutes Dawkins’s position.

An argument that leads to flat-out wrong conclusions cannot be a correct argument, even if some of its implications turn out to be true. So I stand by what I said both yesterday and in The Big Questions : Dawkins’s position fails for exactly the same reason that Michael Behe’s does — we have an explicit example that shows that complexity requires neither a simpler antecedent nor a designer.

False ID

Bob Murphy, always my favorite theist, posts a defense of Intelligent Design theory, or at least an attack on its attackers, who, he claims, have largely failed to grasp what the ID theorists, such as Michael Behe, are claiming:

Behe is fine with the proposition that if we had a camera and a time machine, we could go observe the first cell on earth as it reproduced and yielded offspring. There would be nothing magical in these operations; they would obey the laws of physics, chemistry, and biology. The cells would further divide and so on, and then over billions of years there would be mutations and the environment would favor some of the mutants over their kin, such that natural selection over time would yield the bacterial flagellum and the human nervous system.

Yet Behe’s point is that when you look at what this process spits out at the end, you can’t deny that a guiding intelligence must be involved somehow.

(Emphasis added.)

Perhaps Bob has forgotten that I disposed of this argument in Chapter 4 of The Big Questions , with a single counterexample that refutes both Behe and his polar opposite Richard Dawkins in one fell swoop. Let’s recall their positions, stated as simply as possible:

Behe: Irreducible complexity requires an intelligent designer.

Dawkins: Irreducible complexity requires evolution. (This is Dawkins’s stated position in his book The God Delusion.)

Landsburg: The natural numbers are irreducibly complex, moreso (by any reasonable definition) than anything in biology. But the natural numbers were not designed and did not evolve, so Behe and Dawkins are both wrong.

Continue reading ‘False ID’

Destruction Paper

It’s well understood that if you see the world through sufficiently Keynesian eyes, you might welcome a destructive hurricane or the threat of an alien invasion (together with the frantic spending it would stimulate) as just the ticket to lift the economy out of a recession.

What seems to have been largely overlooked is that even in a thoroughly non-Keynesian world where markets work perfectly (or as perfectly as they can in the presence of a distortionary income tax), and recessions cure themselves, we might still want that hurricane.

Or, because we can’t always call forth hurricanes when we need them, we might want our government to simulate their effects by diverting funds from useful to destructive spending projects — or just occasionally showing up at people’s houses and trashing their furniture.

Here’s why: Hurricanes make us collectively poorer. When we’re poorer, we work more. When we work more, the government collects additional income tax revenue. But — taking total government spending as given — the government can’t continue to collect additional revenue forever; sooner or later it must lower tax rates. (This assumes we’re on the good side of the Laffer curve, where the way to collect less revenue is to lower rates, not raise them.) When tax rates fall, labor markets work more efficiently. So much so, in fact, that the efficiency gains can more than compensate for the initial destruction.

I only realized this recently, and it surprised me (along with several others I showed it to) enough that I wrote it up as a short paper. (Update: A more recent version of the paper is here.) I also looked back through my blog archives to see how badly I’d gotten this wrong in the past.

Continue reading ‘Destruction Paper’

Double Standards

Remember last January, when the President said he wouldn’t negotiate with hostage-takers—like the Republican representatives who demanded spending cuts in exchange for raising the debt ceiling? His argument, as I understood it, was that:

  1. A failure to raise the debt ceiling would be unambiguously bad policy.
  2. It is irresponsible to threaten to implement a bad policy just to gain concessions on the spending front.

It’s an argument I expect we’ll hear again, next time the debt ceiling comes up.

And what’s the President up to in the meantime? He’s demanding a new round of spending increases in exchange for corporate tax reform. Now, since pretty much every sentient being in the Universe agrees that we’re long overdue for corporate tax reform (and in particular for lower rates), I think it’s fair to characterize the President’s position as a threat to retain a bad corporate tax policy just to gain concessions on the spending front.

Continue reading ‘Double Standards’