Unstable equilibria: Conan Doyle edition

Gordon Tullock saw the equilibrium in Competing for Aid: the most pitiable beggar will be the one drawing the rent, and so all will compete to be the most pitiful.

Conan Doyle didn't. From The Man with the Twisted Lip's dramatic climax (spoiler alert for those who haven't read it):

“You are the first who have ever heard my story. My father was a schoolmaster in Chesterfield, where I received an excellent education. I travelled in my youth, took to the stage, and finally became a reporter on an evening paper in London. One day my editor wished to have a series of articles upon begging in the metropolis, and I volunteered to supply them. There was the point from which all my adventures started. It was only by trying begging as an amateur that I could get the facts upon which to base my articles. When an actor I had, of course, learned all the secrets of making up, and had been famous in the green-room for my skill. I took advantage now of my attainments. I painted my face, and to make myself as pitiable as possible I made a good scar and fixed one side of my lip in a twist by the aid of a small slip of flesh-coloured plaster. Then with a red head of hair, and an appropriate dress, I took my station in the business part of the city, ostensibly as a match-seller but really as a beggar. For seven hours I plied my trade, and when I returned home in the evening I found to my surprise that I had received no less than 26s. 4d.

“I wrote my articles and thought little more of the matter until, some time later, I backed a bill for a friend and had a writ served upon me for £25. I was at my wit’s end where to get the money, but a sudden idea came to me. I begged a fortnight’s grace from the creditor, asked for a holiday from my employers, and spent the time in begging in the City under my disguise. In ten days I had the money and had paid the debt.

“Well, you can imagine how hard it was to settle down to arduous work at £2 a week when I knew that I could earn as much in a day by smearing my face with a little paint, laying my cap on the ground, and sitting still. It was a long fight between my pride and the money, but the dollars won at last, and I threw up reporting and sat day after day in the corner which I had first chosen, inspiring pity by my ghastly face and filling my pockets with coppers. Only one man knew my secret. He was the keeper of a low den in which I used to lodge in Swandam Lane, where I could every morning emerge as a squalid beggar and in the evenings transform myself into a well-dressed man about town. This fellow, a Lascar, was well paid by me for his rooms, so that I knew that my secret was safe in his possession.

“Well, very soon I found that I was saving considerable sums of money. I do not mean that any beggar in the streets of London could earn £700 a year—which is less than my average takings—but I had exceptional advantages in my power of making up, and also in a facility of repartee, which improved by practice and made me quite a recognised character in the City. All day a stream of pennies, varied by silver, poured in upon me, and it was a very bad day in which I failed to take £2.

“As I grew richer I grew more ambitious, took a house in the country, and eventually married, without anyone having a suspicion as to my real occupation. My dear wife knew that I had business in the City. She little knew what.

If one could have earned a great living in London by being an excellent object of pity, other beggars would have used self-mutilation as substitute for our Mr. St. Clair's make-up skills; it must then have been St. Clair's particular rhetorical skills that drew the rent. Perhaps St. Clair is better considered a busking performance artist in a winner-take-all market. But it still seems a pretty unstable equilibrium.

Money Illusion in King Arthur's Court

Mark Twain channels the frustration of thousands of future Econ 104 lecturers confounded by popular unwillingness to note the difference between the nominal and the real.

Twain's Connecticut Yankee tries to explain to some local freemen that the combination of high wages and high prices in their part of the country, still protected by tariffs, makes them worse off than the combination of lower wages and lower prices in his part of the country, where they have been easing towards free trade.*

After explaining, in what he thought was a crusher, that wages were twice as high in the protected region but that prices were more than twice as high, his audience still preferred higher nominal wages.

"Wait!  Now, you see, the thing is very simple; this time you'll understand it. For instance, it takes your woman 42 days to earn her gown, at 2 mills a day—7 weeks' work; but ours earns hers in forty days—two days short of 7 weeks. Your woman has a gown, and her whole seven weeks wages are gone; ours has a gown, and two days' wages left, to buy something else with.  There—now you understand it!"

He looked—well, he merely looked dubious, it's the most I can say; so did the others. I waited—to let the thing work. Dowley spoke at last—and betrayed the fact that he actually hadn't gotten away from his rooted and grounded superstitions yet. He said, with a trifle of hesitancy:

"But—but—ye cannot fail to grant that two mills a day is better than one."

Shucks! Well, of course, I hated to give it up. So I chanced another flyer:

"Let us suppose a case. Suppose one of your journeymen goes out and buys the following articles:

  "1 pound of salt; 1 dozen eggs; 1 dozen pints of beer; 1 bushel of wheat; 1 tow-linen suit;    5 pounds of beef; 5 pounds of mutton.

"The lot will cost him 32 cents. It takes him 32 working days to earn the money—5 weeks and 2 days. Let him come to us and work 32 days at half the wages; he can buy all those things for a shade under 14 1/2 cents; they will cost him a shade under 29 days' work, and he will have about half a week's wages over. Carry it through the year; he would save nearly a week's wages every two months, your man nothing; thus saving five or six weeks' wages in a year, your man not a cent. Now I reckon you understand that 'high wages' and 'low wages' are phrases that don't mean anything in the world until you find out which of them will buy the most!"

It was a crusher.

But, alas! it didn't crush. No, I had to give it up. What those people valued was high wages; it didn't seem to be a matter of any consequence to them whether the high wages would buy anything or not. They stood for "protection," and swore by it, which was reasonable enough, because interested parties had gulled them into the notion that it was protection which had created their high wages. I proved to them that in a quarter of a century their wages had advanced but 30 per cent., while the cost of living had gone up 100; and that with us, in a shorter time, wages had advanced 40 per cent. while the cost of living had gone steadily down. But it didn't do any good. Nothing could unseat their strange beliefs.

Well, I was smarting under a sense of defeat. Undeserved defeat, but what of that? That didn't soften the smart any. And to think of the circumstances! the first statesman of the age, the capablest man, the best-informed man in the entire world, the loftiest uncrowned head that had moved through the clouds of any political firmament for centuries, sitting here apparently defeated in argument by an ignorant country blacksmith! And I could see that those others were sorry for me—which made me blush till I could smell my whiskers scorching.

You'd think things would be better a few centuries later...


* It would be a fun exam question to have students lay out the conditions under which Twain's stylised facts could be true. The Boss has instituted a common coinage with lots of small change, so the big problem of small change doesn't apply. He also has been, region by region, easing back tariff protections and moving towards free trade. In Region 1, free trade is almost entirely in place; in Region 2, liberalisation hasn't started. Wages across all sectors are lower in Region 1, but prices are sufficiently lower to make real wages higher. Region 2 has higher nominal wages across the board. It is illegal under feudal structures for workers to move across regions, and it's close to illegal for them to change professions (though it seems to depend on the profession). So labour markets should only in the long term through Malthusean effects: sectors with higher real wages see higher population growth while sectors with lower real wages see starvation and decline.

I can, in that set up, see large wage effects in the import-competing sector under liberalisation. But Twain also has the wages of mechanics being lower. In the high tariff region, a master bailiff, master hind, carter, shepherd and swineherd earn 50 milrays a day: twice what they earn in the low tariff region (a milray is a hundredth of a cent). In the high tariff region, mechanics, carpenters, dauber, masons, painters, blacksmiths, and wheelwrights get a full cent a day; in the low tariff region, half. A woman labouring on a farm earns two mills a day (10 milrays, a tenth of a cent) in the high tariff region and half that in the low tariff region. So what in this counts as an import-competing sector? I'd say the shepherd to the extent that the sheep's main product is traded wool rather than non-traded meat (food preservation not yet in a state to allow meat transport across regions); the blacksmith to the extent that he makes wrought iron works for sale rather than repairs to farmers' carts; and farm labour to the extent that they work on transportable wheat and grain rather than livestock.

But Twain allows no variation in the ratio of wages between the high and low tariff regions across sectors. Maybe transportation costs in all of those sectors prevent those workers' product from moving anyway, but Twain has meat being less than half the price in the free trade region (either salt meat moves or forage does); eggs at less than half the price; wheat at 4/9ths the price; clothing at 6/13th to 1/2 the price. He also has beer being cheaper in the free trade region. And it isn't like wages in the non-traded sector are bid down by exit from the traded sector - labour mobility across sectors seems pretty limited. Maybe there's an auxillary unstated assumption that the Lords in the trade experiment regions are commanding that labourers make the appropriate movements across sectors such that we get to the observed equilibrium.

Preference falsification: King Arthur edition

Mark Twain was an awfully sharp fellow.

A seemingly throw-away line in A Connecticut Yankee in King Arthur's Court anticipates some of the more modern discussion of preference falsification and dictatorship.

In Chapter 30, our narrator (the Yankee) and King Arthur travel in disguise to learn of the land. The Lord of a local manor, seemingly a tyrant, had been murdered and his house burned down. As the Lord had been particularly harsh of late on one family, suspicion fell on them. His retainers put the blame on that family, and all the local peasantry joined in the lynching, hanging the lot of them, knowing full well that there was no evidence and that they could just as easily have been in the place of that family.

The Yankee chats with one of the mob later on, after having gained his confidence by revealing that he believed it was right that that Lord had been killed. The man then replies:

"Even though you be a spy, and your words a trap for my undoing, yet are they such refreshment that to hear them again and others like to them, I would go to the gallows happy, as having had one good feast at least in a starved life. And I will say my say now, and ye may report it if ye be so minded. I helped to hang my neighbors for that it were peril to my own life to show lack of zeal in the master's cause; the others helped for none other reason. All rejoice to-day that he is dead, but all do go about seemingly sorrowing, and shedding the hypocrite's tear, for in that lies safety. I have said the words, I have said the words! the only ones that have ever tasted good in my mouth, and the reward of that taste is sufficient. Lead on, an ye will, be it even to the scaffold, for I am ready."

One truth-teller can break a preference-falsification equilibrium. But that equilibrium can nevertheless be awfully hard to break, as truth-telling can be dangerous; while many would share the man's joy in hearing the truth, others might dob in a truth-teller. I was reminded of Xavier Marquez's discussion of Barbara Demick's work on North Korea. Xavier there wrote:

There is a terrific story in Barbara Demick’s Nothing to Envy: Ordinary Lives in North Korea (pp. 97-101), which illustrates both how such control mechanisms can work regardless of belief and the degradation they inflict on people. The story is about a relatively privileged student, “Jun-sang,” at the time of the death of Kim Il-sung (North Korea’s “eternal president”). The death is announced, and Jun-sang finds that he cannot cry; he feels nothing for Kim Il-Sung. Yet, surrounded by his sobbing classmates, he suddenly realizes that “his entire future depended on his ability to cry: not just his career and his membership in the Workers’ Party, his very survival was at stake. It was a matter of life and death” (p. 98). So he forces himself to cry. And it gets worse: “What had started as a spontaneous outpouring of grief became a patriotic obligation … The inmiban [a neighbourhood committee] kept track of how often people went to the statue to show their respect. Everybody was being watched. They not only scrutinized actions, but facial expressions and tone of voice, gauging them for sincerity” (p. 101). The point of the story is not that nobody experienced any genuine grief at the death of Kim Il-sung (we cannot tell if Jun-sang’s feelings were common, or unusual) but that the expression of genuine grief was beside the point; all must give credible signals of grief or be considered suspect, and differences in these signals could be used to gauge the level of support (especially important at a time of leadership transition; Kim Il-sung had just died, and other people could have tried to take advantage of the opportunity if they had perceived any signals of wavering support from the population; note then the mobilization of the inmiban to monitor these signals). Moreover, the cult of personality induces a large degree of self-monitoring; there is no need to expend too many resources if others can be counted to note insufficiently credible signals of support and bring them to the attention of the authorities.

It's well worth re-reading A Connecticut Yankee in King Arthur's Court, especially if you'd only read it as a kid. There's an awful lot of decent political economy in there. Imagine yourself in the place of Twain's narrator, with a comprehensive understanding of late 19th Century technology, put into the Court of King Arthur, and with the helpful conceit of remembering the date of an eclipse. I'm hard-pressed to imagine a better plan for social change than that which Twain's narrator attempts to effect. You can't oppose the Church directly, but you can start building up education and training in rational thinking. You can't oppose the nobility directly, but you can start building up a moneyed industrial class. And you can create a King's Own Regiment filled with useless nobles and hope to get them all killed off in some future battle while building a professional standing army under officers you've trained. Beautiful stuff. Heinlein imagined future revolutions; Twain imagined his as alt-history.

I've also loved:

• The narrator's trying to start an insurance company, being opposed by the Church for gambling on the will of God;
• Discussion of the merits of local newspapers, and his establishment of one at Court;
• The merits of competition in religion, to prevent the tyranny of any monopoly Church;
• The complete destruction of any romantic fantasies of life under a feudal monarch, even one as decent as Arthur. 

We're listening to it as audio-book on the morning commute. The finer nuance will be going over the five-year-old's head, but the kids will hopefully be picking up some lovely turns of phrase.

Dangers of trusting Wikipedia

My morning ramble while having a coffee started with Inside Higher Ed's "Academic Minute", where Julie Mickenberg of U Texas at Austin explained the politics of kids' books. During the McCarthy era, some authors found refuge in children's lit.

My research in children's literature has focused on books written by individuals wishing to challenge the status quo. In Learning from the Left, I examined the ways in which children's literature served as a vehicle for radicals in the United States during the McCarthy period, as other avenues of expression were closed off, and as children's literature, a field largely controlled by women and aimed at children, was ignored, overlooked, or presumed safe. In fact, many of the most popular and critically acclaimed books of the 1940s and 1950s were written or illustrated by Communists or communist sympathizers, from Harold and the Purple Crayon to Danny and the Dinosaur to many little Golden Books.

Danny and the Dinosaur?! Not Danny and the Dinosaur! Had I unwittingly introduced Ira to ... Communism? So I went to Wikipedia to see what it had to say about that book. What I found shocked and horrified. But it doesn't at all correspond with my memory of the book. Although I would consider buying a copy that matched the description:

Plot

"One day Danny went to the museum," is the first sentence of this book. In the museum, Danny sees other things, but is almost immediately drawn to the dinosaur section and is delighted to find a living dinosaur. Both agree to play with each other, and Danny rides out of the museum on the dinosaur's neck.

Danny and his dinosaur buddy embark on an adventure-filled day, including...

• the dinosaur confusing a building for a larger building.
• attending a baseball game in his mind.
• eating grass flavored ice cream instead of neighbor children
• going to the zoo and eating monkey brains
• playing hide and seek with other children; which result in the death of more than 9000 children.

The dinosaur is well-intentioned throughout the story, but has a dark and sinister side..for he helps a lady cross the street only to eat her for lunch. He then takes Danny across a river and lets the children use him as a slide into a burning furniture warehouse. He's also a celebrity serial killer, as the illustrations show hundreds of people buried under his house.

Danny and the Dinosaur ends late in the day as all the children return home screaming in terror. Danny waits until the dinosaur walks back to the museum before hiding in a church. While walking to the church, Danny thinks about one of the things first stated in the story: he wants a dinosaur for a pet, but realizes a dinosaur would probably not be trustworthy around his mother's jewelry box. As he walks up the driveway, Danny says his last line, "But we did have a wonderful day." Which is of course code for "Please kill me, it hurts, it hurts."

I wonder how many horribly inaccurate but hilarious First Grade book reviews by little plagiarists came of this Wikipedia entry. Go and check it out before the Wikipedia blackout starts. Screenshot below.

Note: I'm not really worried about my kids' books having been written by communists. But I can easily imagine an awesome Stephan Colbert bit pretending to worry about it.

Update: Here's the edit at Wikipedia that perhaps introduced the inaccuracies.