Tuesday, July 25, 2006

Sally Forth, 07/24

You may think the summer heat's getting to Ted, but he's actually on to something. Economists have recently debated whether increases in the labor supply, specifically of uneducated workers, will lower wages. Most historical examples along with modern data suggest there's not a problem. Why? Not only does the supply of labor increase, but the demand for goods and services does as well. We can handle thousands of Mexican fast-food workers because thousands of the same Mexicans will also be eating fast food, and consuming lots of other things. It's a Say's Law kinda thing, I guess--supply creates its own (effective) demand.

But the case is quite different with zombies.

Of course, it depends on what kind of zombies we're talking. Ted seems to assume they are not the brain-devouring kind, so we'll go with that. What about human capital investment? If they're Romero zombies, they've lost all of their human capital upon death but because zombiism revives or sustains cells they still have some learning capacity. They'll never become rocket scientists, but they can probably take an order at McDonald's or write pop music. If they're Return of the Living Dead style zombies, they're still fully functional and intelligent, so they may not all be working low-wage jobs. Their lust for brains impeded their facilities, but we're ignoring that. To be fair we should probably assume that they're obsessed with something else to make the pain of rotting subside--perhaps morphine or another drug. However, if the zombies in question are like most brands of zombie, they're mindless and not very mobile so they'll have trouble even netting the fast-food gig. Imagine if your arm fell into the fry machine.

Which brings us to the sanitation problems. Flesh decay could of course lead to all sorts of issues, not only in food jobs. A clean work environment is necessary to keep employees and patrons from contracting disease, and what can you say about zombies? They're walking death; you can expect your employees or patrons to get sick regularly, if they can even stomach the smell and the new fly visitors long enough to do business. On the plus side, if all your coworkers die they'll just come back as zombies and you can lower their wages.

But the real issue is whether the science of economics would apply to a zombified world at all. Would the same assumptions hold? Are zombies rational, self-interested decision-makers? Going back to the original immigration example: we can safely say the zombies won't consume normal human food. (What'll happen if they don't eat? They'll die?) So the demand curve for fast food won't shift out like it would with human immigrants. Would they consume any other goods? Expect a worldwide depression if the dead rise from their graves, even if they don't want to eat you alive. Not only would they put fast-food workers out of a job, but economists too.

I have lots of other ideas, of course, but I'll leave it there for now. There's probably a good 25 pages or so of material in the question. Feel free to add your own thoughts.

Update: I'm told that zombies are actually quite bad at filling fast-food orders. (See here.) Read more.

Monday, July 24, 2006

New interview with Milton and Rose Friedman


Parts I like:
And how does it feel to have gone from being a person reviled in certain quarters as Evil, to one revered across the world?

Milton (suppressing a laugh): "I don't think I was ever regarded as 'evil.'"

I take it he's not been on the internet recently. Milton Friedman is Satan incarnate in a lot of circles. Maybe he just meant in the academic world. But I'm pretty sure they've only been hiding the crosses they carry with them to Friedman debates.
It cannot be said of too many economists that they "altered the shape of economics." Would Mr. Friedman say -- modesty aside -- that he was one of them? A long silence ensued -- modesty, clearly, was hard to put aside -- before he mumbled, as if squeezing words out of himself, "Er . . . very hard to say . . ."
. . .
If they were to throw a small dinner party ... for Mr. Friedman's favorite economists (dead or alive), who'd be invited? Gone was his tonguetied-ness of a moment ago, as he reeled off this answer: "Dead or alive, it's clear that Adam Smith would be No. 1. Alfred Marshall would be No. 2. John Maynard Keynes would be No. 3. And George Stigler would be No. 4. George was one of our closest friends."

That's a pretty good list. I'd add Carl Menger, either replacing Friedman's Marshall or as an additional number 5. Principles of Economics solved Adam Smith's biggest theoretical flaw and established the Austrian School. You could argue that his contribution was diluted by Walras and Jevons making the same discovery, but they were mathies who would be distinctly boring at a small dinner party, so he's in. I'd give him a copy of Human Action and ask him if he liked what he unwittingly started. Read more.

Wednesday, July 19, 2006

I dream about economics. Read more.

Monday, July 10, 2006

Corporate Whore

"Something else that amazes me is how often libertarians get labeled pro-business. If I say, 'I do not care if businesses fail in the process of competition,' and you say, 'I do not want small businesses to fail,' I am not the one who is pro-business."

(But the truth is, I really, really need to quit commenting on economics blogs.) Read more.