Friday, April 3, 2009

Assorted updates

I warned that crises are fuel for both poles. Richard Metzger at BoingBoing cries Marx was right!.

I see this as a test between Naiomi Klein and Bob Higgs. Klein says economic crisis is exactly what the elites need to help push us to further deregulation, weakening the state in favour of markets. Higgs warns rather that crisis is the health of the state. He provides a wealth of historical evidence making his case. The only real world case that might fit a Klein story is New Zealand in 1984; of course, she has the sign wrong on the normative aspect. Higgs is right today. Why a banking insolvency crisis turns into crackdowns on tax havens makes sense in a Higgs story. Think the G-20 Cartel is worried about the productive squirreling off their resources onces the bill comes round to pay for the the cartel's profligacy? For more on international tax competition, read Veronique de Rugy's work on the topic (at Cato and Mercatus).

If we're in an Atlas moment, Wesley Mooch and Fred Kinnan are winning. And there is no John Galt. If Sergei Brin and Larry Page disappear and later emerge on some Seastead built by Patri Friedman and protected by some Google-developed missile-defense system, I'll re-evaluate.

In other news, I'd recently discussed the economics of ticket scalping. James Swofford points me to a recent article in which he discusses how the scalping equilibrium may be optimal from the artist's perspective when a dynamic revenue function is considered. That argument corresponds to some of the arguments in the comments section about bands being able to maintain fan base by pricing concerts below market clearing.

A reply to Swofford by Spindler notes that scalpers may make artists better off by facilitating closer to perfect price discrimination where the artist is constrained against doing so, even where there aren't side-payments from scalper to artist (which Reznor discusses). Swofford's rejoinder argues that the artists still suffer a reputational loss from the existence of scalpers, which then hits their dynamic revenue function, and consequently the artists and ticket agencies lobby for anti-scalping rules.

This remains inconsistent with that scalping could be eliminated at relatively low cost by requiring photo ID and named tickets. It seems more likely to me that the artists and ticket agents lobby for anti-scalping laws to maintain the veneer of being against scalping while ensuring that they can profit from this side-market and its side-payments without suffering a hit to the dynamic revenue function.

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