Economics

Does Our Generation Not “Stand a Chance”?

/ Matthew Clemente / 2 Comments

That was the question being debated on the most recent episode on the Intelligence Squared podcast.

Moderated by ABC News’ John Donvan, the debate featured Binta Niambi Brown (lawyer, startup advisor & human rights advocate) and W. Keith Campbell (University of Georgia Professor of Psychology & co-author of The Narcissism Epidemic Psychology) who argued for the motion; and David D. Burstein (author of Fast Future: How the Millennial Generation is Shaping Our World & founder of Generation18) and Jessica Grose (journalist & author of Sad Desk Salad), who argued against the motion.

Here is description of the debate:

Millennials-growing up with revolutionary technology and entering adulthood in a time of recession-have recently been much maligned. Are their critics right? Is this generation uniquely coddled, narcissistic, and lazy? Or have we let conventional wisdom blind us to their openness to change and innovation, and optimism in the face of uncertainty, which, in any generation, are qualities to be admired?

Freakonomics on Bitcoin

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Freakonomics on Bitcoin

Earlier this year, the Freakonomics Radio Podcast provided its take on the virtual currency bitcoin, in a episode titled “Why Everybody Who Doesn’t Hate Bitcoin Loves It.”

Here is a description of the show from the Freakonomics website: 

After being bombarded by email requests for months, Freakonomics Radio has finally caved and made an episode about Bitcoin. . . . The gist: thinking of Bitcoin as just a digital currency is like thinking about the Internet as just e-mail. Its potential is much more exciting than that.

Bitcoin is often described as “virtual gold” — as well as everything from a “bubble” to a “Ponzi scheme” to “a haven for individuals to buy black market items.” But what excites some people, like Silicon Valley veteran Marc Andreessen, is Bitcoin’s potential as a new technology that could underlie any number of transactions, well beyond the simple swapping of currency.

Andreessen, a Web pioneer, is now on the board of companies like Facebook and eBay. He is not a disinterested observer in the Bitcoin debate: his venture-capital firm Andreessen Horowitzhas invested around $50 million in two Bitcoin-related companies, including Coinbase, and Andreessen says they plan to invest much more to enable Bitcoin to go mainstream.

Why such confidence? The reason, Andreessen tells Stephen Dubner, is that Bitcoin is “the solution to a fundamental problem in computer science”:

ANDREESSEN: One of the things … that’s been missing on the Internet for 20 years is kind of a native concept of money…The ability to very easily pay somebody online, the ability to very easily charge for a piece of content, the ability to very easily exchange a digital title, or a digital key, or a digital contract has just been missing because you have no mechanism for establishing trust. And so Bitcoin basically holds the promise of being the first solution to establishing trust over an untrusted network.

Susan Athey, an award-winning economist at Stanford with a background in computer science, is also a big believer in the technology behind Bitcoin; for what it’s worth, Athey advises the company behind Ripple, which is Bitcoin’s top competitor (by market cap):

ATHEY: The beauty of a new currency, which is part of a virtual currency protocol, is that what I’m moving from me to you is just an entry on a secure, public ledger. And that public ledger is maintained by a set of computers all talking to each other using a protocol. So I don’t have to worry about some bank giving me an IOU and then giving that IOU and handing it to another bank. Instead, if I make a transaction over the virtual currency, it’s just an entry in the ledger. So I don’t need a middleman.

New York Superintendent of Financial Services Benjamin Lawsky, who is leading the charge toregulate Bitcoin in the U.S., tells Dubner that he is concerned about the freedom Bitcoin affords to criminals:

LAWSKY: It’s very hard to transport $1 million in hard currency overseas. You can’t just put it in a backpack and get it on a plane very easily. But it is very easy to do that now digitally using Bitcoin.

That said, Lawsky is also excited about the possibilities of a technology like Bitcoin, which could bring down all sorts of transaction fees. This may be bad news for traditional banks, credit-card companies, and other fee-seeking middlemen. But, as Lawsky points out, a lot of other people stand to benefit:

LAWSKY: Right now, there are thousands and thousands of New Yorkers who work hard every day to send money back home to their families in whatever country they’re from…And right now they’re paying fees for those wire transactions each week at the end of the week, 7, 8, 9 percent. And that’s a lot of money for people who often can’t afford it.

A crowd of leading economists, including two Nobel laureates and former Fed chairman Alan Greenspan, have bashed Bitcoin. They’ve expressed alarm about the astronomical rise in the digital currency’s value. Marc Andreessen argues that they are missing the larger point:

ANDREESSEN: It’s a little bit like dogs watching TV. It’s like, it’s all very interesting, but like whatever until another dog shows up on screen and then the dog freaks out. Economists, like this stuff is all like, whatever, technology, geek, nerds whateverand then “currency” is the flag. And so the minute the word “currency” shows up, all the economists perk up because if there’s one thing economists are all experts on it’s currency… And they look at it and they say, “Oh my god, people are paying $600 for this thing, it’s just a piece of fake digital currency, people have just lost their minds.” I don’t think that they are looking at the underlying substance.

The episode also addresses a question many of you asked when Freakonomics Radio ran a fund-raising campaign: why don’t you guys accept Bitcoin?

Dead Giraffes v. Dead Syrians: Which Is More Outrageous?

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Dead Giraffes v. Dead Syrians: Which Is More Outrageous?

Clearly, the answer is Syrians.  However, if one were to use media coverage as a barometer, one would think that the death a Marius the giraffe, a Copenhagen giraffe killed and butchered in front of a crowd, is more important than the Syrian genocide.  The video of Marius’s murder went viral and created widespread outrage.  The Syrian genocide is a horrible abstraction, the stuff below the fold in the New York Times. Recently, the Freakonomics Radio podcast investigated the phenomenon of selective outrage.  Although not explicitly about public policy, it is not hard to see how selective outrage has ramifications in political and public policy debates.  

Here is a description of the podcast from the Freakonomics blog: 

This week’s podcast is about selective outrage — why we get so upset over some things, and then not over others. It’s called “Which Came First, the Chicken or the Avocado?” . . . 

We start with Marius the giraffe. Marius lived at a zoo in Copenhagen. Zoo officials said he was a “surplus” animal: too genetically similar to other giraffes, and therefore he couldn’t breed. It was kinder, they said, to kill him. So they fed him some rye bread (“his favorite food”), shot him in the head, and dissected him in front of a crowd of onlookers, including kids. Next they fed his corpse to the lions. Perhaps not surprisingly, the world reacted with outrage.

 

How did this compare to the outrage expressed over the killing of more than 146,000 people during the ongoing civil war in Syria? Not quite commensurate. Ammiel Hirsch, senior rabbi at the Stephen Wise Free Synagogue in New York, noticed this disparity, and he talks about it withStephen Dubner:

 

HIRSCH: If you recall there was saturation coverage of a Danish zoo that killed a giraffe in front of dozens of schoolchildren and fed it to the lions. And it struck me that that received so much attention and so much publicity — not that I’m in favor of killing giraffes, in general, or killing any animals, let alone in front of children — but it was at the time when there was such savagery around the word, and in particular, hundreds of people in that week were butchered in Syria, and there was such little coverage about that event, and so much coverage about the killing of one giraffe that it simply struck me that that probably says something about how we think and about the nature of our society.

 

Steve Levitt says that outrage over Marius’s death, and the increased level of compassion people have for animals, is overall a positive sign for society:

 

LEVITT: I think being nice to animals is a luxury good. I remember when I first went to China 14 years ago to adopt my daughter and we went to an open-air market. And the animals they had to eat and the circumstances of these animals were just, to a Westerner, outrageous… And then when I went back about five years later, to the same open-air market, what just amazed me is that suddenly they had a big section of the open-air market that was devoted to fish tanks. In just five years, China had boomed in wealth. [They went] from literally eating anything they could find, to deciding it was fun to have animals for pets.

 

You will also hear from Wall Street Journal reporter Jose de Cordoba, whose article about the Mexican avocado trade perhaps should have outraged people but didn’t. De Cordoba explains how most avocados eaten in the U.S. are “blood avocados,” made to pass through a criminal cartel that extorts, kidnaps, and kills.

 

And finally, big thanks to listener Rebecca Pearce. She wrote to us with a question that gets Levitt and Dubner wondering what’s more valuable: the life of a polar bear or the life of an economist.

Innovative Tax Collection Techniques

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Innovative Tax Collection Techniques

In “celebration” of Tax Day last week, NPR‘s Planet Money podcast did a story about innovative tax collection techniques that are employed internationally.  

Here is a description of the story, titled “The Tough, The Sweet And The Nosy,” from the NPR website: 

Millions of tax cheats never get caught. And the IRS seems powerless to stop them.

This isn’t just a problem in the U.S. American taxpayers are Dudley Do-Rights compared to people in some other countries. On today’s show, we head to some of the cheating-est places on earth to bring you tales from some of the roughest, toughest tax collectors around. These guys have tricks, tax collector mind-games, that they play to get people to do the right thing.

Barilla Pasta and the Italian Economy

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Barilla Pasta and the Italian Economy

Bar none, one of the best podcasts around is NPR’s Planet Money podcast.  If nothing else, it provides good small talk/networking fodder as it provides intersects interesting stories with economic concepts.  This story (from 2012),  which I mentioned to a friend this weekend, is a prime example. It discusses the story of two Barilla pasta factories and the productivity of the Italian workforce.  

Here is a description from the NPR website: 

A decade ago, the Barilla pasta factory in Foggia, Italy, had a big problem with people skipping work. The absentee rate was around 10 percent.

People called in sick all the time, typically on Mondays, or on days when there was a big soccer game.

Foggia is in southern Italy. Barilla’s big factory in northern Italy had a much lower absentee rate. This is not surprising; there’s a huge economic gap between southern and northern Italy. It’s like two different countries.

Barilla execs told Nicola Calandrea, the manager of the Foggia plant, that they would close the factory unless he brought the absenteeism rate down.

Calandrea decided that to save the factory, he had to change the culture. On today’s show, we visit the factory and hear how Calandrea made it work.

For More: How A Pasta Factory Got People To Show Up For Work.