Stories need scarcity, and unrelated bits

Bill Kaye-Blake has migrated over to a new blog, Groping Towards Bethlehem. I'll comment on a few of his recent posts here; I'm sure his blog will be worth following in future for those watching Kiwi econ policy.

• Bill's bored by a SciFi story which effectively finds the end of scarcity - the protagonists do away with constraints on space, energy, time and mortality.
  
  I've not read The Number of the Beast, but Bill didn't mention whether knowledge remained limited - if the multiverse already has a thorough and completely accurate Encyclopaedia Gallacticus. Presumably the protagonists could find challenges in expanding the domain of knowledge. Or, finding ever more creative forms of hedonism. 



• Does welfare reform posit $20 bills lying around?
  
  My quick read of National's proposal was that it didn't seem to do a whole lot; the biggest change was that additional children had while on the DPB won't extend the duration of the benefit by as much as it would have ex ante [see also Lindsay Mitchell]. I'll agree with Bill about the multiple barriers to work issues, and he's very likely right on National's overselling the benefits.
  
  But most outrage about the proposals thus far seems centred on the immorality of forcing women back to work before their kids are 14. This falls entirely on deaf ears for me - both our kids have been in daycare since they were 3 months old, in part to keep our family net income sufficient for raising the two kids adequately; were we not paying to keep a few single mothers home with their 12 year olds, maybe we could afford to choose otherwise. I suspect that more than a few double income families with kids in daycare get just a bit angry when called on to solve the injustice of that folks might not be able to choose to stay at home with kids at others' expense. If I had a button to push, it would be for 1) more daycare funding; 2) making childcare benefits of limited duration; 3) requiring Norplant (or other equally-effective equivalents) as condition for receiving the childcare benefit. I can accept that there are cases where it's more efficient that the mother stay home with the kids rather than pay for daycare given the woman's earning potential; I'm happier eating the losses from subsidizing daycare than the losses from screwing up the incentives. 



• Externalities and risky buildings. Bill's thinking about things in the right way: buildings with unreinforced masonry impose a risk on passers-by in case of earthquake - a negative externality - while providing uncompensated amenity value - a positive externality.
  
  Optimal response, I think, will have to involve Councils' putting some budget [hopefully supplemented by private donation] into paying building owners for heritage amenities. Rather than listing thousands of buildings on heritage registers and making it hard to fix them up, list the couple hundred most important and pay their owners for the heritage amenity provided. Then either add into a building's property tax assessment a fee for risks imposed by unreinforced masonry or require holding adequate liability insurance for damage potentially done to passers by in an earthquake. Some older masonry buildings will be torn down, but if their heritage value isn't sufficient to make them worth the risk, that's optimal. But we won't know it until we start putting some real prices on heritage value and paying owners for it, and charging owners for risk imposed.

I'm pleased to see Bill striking out on his own! We now have a decent selection of economics blogs by NZ-based academic economists: Offsetting, Anti-Dismal, and Sam Richardson; we've also another economics blog by non-academics that capably tackles academic issues: the Visible Hand. If we're not careful, we'll soon have enough folks around for reasonable conversations.