… Pink’s doesn’t just have a 15-20 minute wait at meal times like many local eateries. Rather, at almost any time of day, the line to get a Pink’s chili (or any other) dog snakes through a few switchbacks, up La Brea, and back into their parking lot, frequently lasting a good hour.  At peak times, the line has been said to approach 1.5 or two hours.

… I can understand waiting in line for hours, say, to obtain critical medical services, or in a bread line in Soviet Russia where the only alternative is starving.  I can even imagine waiting in line for a couple hours to get tickets for a once-in-a-lifetime chance to see your favorite performer appear live.  But for chili dogs?  No way.  Something more than simple preference satisfaction has to be going on.

So what explains the Pink’s paradox?  Why is it that demand for these chili dogs continues to grow, even as the experience costs and actual costs associated with its food increase at an even greater rate (and appear to swamp the benefits of eating even the tastiest chili dog)?  And what does this tell us about the rationality (or irrationality) of line-waiting generally?

Fagundes suggests several reasons for people’s willingness to wait so long in line: (1) the long line is a product of group think; (2) the long line signals that the food is good, helping people sift through the overwhelming number of food choices in Los Angeles; (3) the long line provides some intangible benefits; or (4) the long line indicates the food is unique. I think he’s definitely onto something here. But Fagundes’ theories don’t just explain why people wait a long time for hot dogs; they also help explain why people are willing to to bear an unreasonably high “cost” for another good: BigLaw attorneys.  In fact, every one of Fagundes’ theories could be employed to understand better why people pay extraordinarily high rates to big law firms.

First, companies’ willingness to pay high law firm rates might be simple group think. Big companies often go to big law firms that charge big rates. It feels natural. Law firms understand that there is an element of group think–that’s why they post all those lovely lists of “representative clients.” There’s also some “internal group think.” A big company may use a big firm because that’s what the company’s general counsels have always done before. It’s institutional inertia.

Second, high billable rates might act as a signal that the work is good. At least for non-lawyers, legal work is often hard to assess objectively. So by going to a big firm and paying a big price tag, they can convince themselves that they “got what they paid for.” When a client goes to a high-billable-rate firm and convinces them to offer a special, lower rate, that’s even better, as you get some part of the signalling effect without actually having to bear the cost. (Alternatively, because laypersons may find legal work hard to value, they might rely on signalling–or they might just go for the cheapest solution.)

Third, there is probably an intrinsic “good feeling” that comes with paying the big rates. If you’re paying big rates, you feel important, powerful, and in control. Like shopping in the finest department stores, you get to walk into a beautiful lobby area as a client and get schmoozed for the awesome person that you are. And as an added benefit, GCs can return to their business-side folks and say, “Look! I got the best firm money can buy! Look how fancy they are!” The rate is justified by the “BigLaw Experience.”

Fourth, the high billable rates might reflect the “uniqueness” of the services being offered. I don’t think big law firms offer exceptionally special legal services, but they might enjoy “unique” relationships with larger clients that make their services more desirable. This explanation, however, is probably the weakest.

Who knew? Hot dogs and BigLaw seem to have a lot in common.*

-Michael

*I promise no further posts about hot dog law.

Cliometrics is “is the application of economic theory and quantitative techniques to describe and explain historical events.” The name is derived not from some scientificky sounding Latin terminology, but rather from Clio, the Greek muse of history. As a non-historian and non-economist, probably the most fascinating parts of it for me is largely the random historical-economic factoids — such as that in 1700 in Maryland, for a female indentured servant, one lash was worth about 38 cents, or about two days of labor.

Sadly, despite having snagged a Nobel in 1993, cliometrics is something of a has-been among academic disciplines. Too many articles on cliometrics are of the “What Has Cliometrics Achieved?” and “Reflections on the Cliometric Revolution” variety — it’s never a good sign for an academic field when the meta-commentary plays more prominent role than the regular kind does. The idea of making some sort of falsifiable, scientific study of history does seem appealing, but as cliometrics’ critics are quick to point out, the whole point about it being “history” means there’s too often not a complete set of data to work from, leaving researchers no choice to theorize in the gaps. The mere presence of numbers does not actually turn subjective analysis into an objective one.

Still — how can you not love a discipline that results in articles like “The Suitability of Domesday Book for Cliometric Analysis” and “An Economic History of Bastardy”?

-Susan

All but one of Haiti’s textile plants – which account for 90 per cent of its exports – were in Port-au-Prince. Consequently, the earthquake has essentially knocked out the country’s entire export sector. The Port-au-Prince region also accounted for 85 per cent of government revenues.

And on Haiti’s dependence on UN food supplies:

The UN says that yesterday it managed to feed 40,000 people and that it hopes to increase that to 1 million people a day within two weeks, and 2 million in a month.

“By the end of Monday, we will have distributed more than 200,000 food rations in and around Port-au-Prince,” the UN World Food Programme announced in a statement. It said that it was establishing food kitchens to feed the hungry.

If the Food Program needs to be supplying rations to that many people a month out from the disaster, that is very foreboding news for Haiti’s long-term future. The population of the entire affected region is around 3 million — and some estimates have as many as 300,000 people there dying in the earthquake and its immediate aftermath. If so, that would mean the UN is gearing up to be responsible for the food supply of nearly three fourths of the people in the greater Port-au-Prince area. That is, to say the least, an unsustainable situation.

In a post last week, I brought up the issue of whether a state without a territory is still a state. But having a government is also one of the formal requirements of statehood, a condition which Haiti now only nominally qualifies for. I don’t think it’s too much of a stretch to say that it is only inertia and the continued communal belief that Haiti-is-a-State by the rest of the world that makes Haiti a State at all.

-Susan

Finding evidence of economic systems in scifi and fantasy books is not hard. The use of economics in speculative fiction is not always blatant, of course, and more often than not it is used for world-building rather than to promote an author’s economic view point. But when envisioning their futuristic societies or when creating fantasy worlds, the vast majority of authors do incorporate some form of economic structure.

There is one glaring exception to this rule: J.R.R. Tolkien.

Because economic systems do not exist in Middle Earth.

Tolkien was — beyond all doubt — a god among world builders. But Middle Earth’s intricate mythology was simply that. A mythology. His world was not a functioning, messy, organic society, but a symbolic realm. In many ways, his detailed accounts of the history of Middle Earth are the equivalent of the Bible: the begatting of generations and the successions of kings are all accounted for in exquisite detail, but any accounts of the day-to-day life of Middle Earth’s inhabitants are left skeletal and superficial.

If you doubt that, consider the following questions: Did Gondor tax its citizens, and if not, how did it get its massive armies? Were there lawyers and judges in Rohan? Who wrote the laws in Bree? Did any race or kingdom have schools or systems of higher learning? Was there a mercantile class? Were there trade guilds at all, or tariffs, or monopolies? Could Dwarves or Hobbits or Elves freely choose their careers — and if so, were there career options beyond “farmer,” “miner,” “innkeeper,” and “soldier”? What sovereign minted the coins that occasionally appear in the books? Did people earn wages or were they paid stipends by feudal lords? Why is there no evidence of trade in Middle Earth in situations where in a real world we should expect to see some? What political and economic motives could Sauron’s human allies possibly have? How were the Rangers of the North, such as Strider, funded? For that matter, how was Gandalf funded — surely he needed some sort access to resources to accomplish all his doings? And perhaps most perplexingly, why do women, of all the races, appear to be on the verge of extinction?

No answers. (Well, unless of course the answers happen to be in The Silmarillion, I certainly am not about to read that one to find out.)

That last question should be a particular tip off, though. How can you know a civilization in any level of detail when fully one half of its citizens are essentially unmentioned?

Tolkien’s apathy towards the economy and social infrastructure of Middle Earth was by no means the result of simple oversight. It was a deliberate attempt to construct a world that conformed to his views of the human condition. Tolkien did not believe that human societies required regulation in order to function — and so Middle Earth went unregulated. In referring to his own views, Tolkien stated that,

My political opinions lean more and more to Anarchy (philosophically understood, meaning abolition of control not whiskered men with bombs) – or to ‘unconstitutional’ Monarchy. I would arrest anyone who uses the word State (in any sense other than the inanimate realm of England and its inhabitants, a thing that has neither power, rights nor mind).

When creating Middle Earth, it is apparent that Tolkien had, shall we say, an eye for detail, and it would be an insult to suggest he simply forgot to factor in economics and politics. As Tolkien wrote in a letter describing the hobbits’ arrival in Bree at the Prancing Pony Inn:

The landlord does not ask Frodo to ‘register’! Why should he? There are no police and no government … If details are to be added to an already crowded picture, they should at least fit the world described. (Tolkien, letter #210).

And the world described in the Lord of the Rings is one where economics does not exist.

The Shire, where the Hobbits lived, is in many ways a replica of Tolkien’s notion of the ideal existence. The Shire’s inhabitants had loose forms of self-government, but no police, no trade guilds, no universities, no extrinsic power that served to shape the Hobbits’ lives. As described in the Lord of the Rings,

The Shire had hardly any ‘government’. Families for the most part managed their own affairs. Growing food and eating it occupied most of their time. In other matters they were, as a rule, generous and not greedy, but contented and moderate, so that estates, farms, workshops, and small trades tended to remain unchanged for generations.

As for how the Shire’s government and lawmaking functioned, there was no sovereign — in fact, if the Shire were an earth region, it would almost certainly not qualify for statehood today — but there were laws that were followed, of a sort. In terms of Hobbit jurisprudence, the inhabitants of the Shire “attributed to the king of old all their essential laws; and usually they kept the laws of free will, because they were ‘The Rules’ (as they said), both ancient and just”. Apparently Hobbits embraced Natural Law theory.

Some commentators have tried to use the Shire as proof of Tolkien’s secret capitalism, by arguing that the Shire represents a capitalist utopia, until Saruman/Sharkey instituted a form of communism in the Shire, with disastrous results.

This claim is unconvincing. Tolkien was well known for abhorring modern technologism, and for pinning many of the world’s ills on advances in global industry. Saruman’s evil, in Tolkien’s eyes, was in bringing industrialization to the Shire, not socialism. The Shire was an idealized rustic England, and Sharkey’s interference was the equivalent of the Industrial Revolution, not the imposition of Soviet gulags. If anything, Tolkien intended the Shire as a promotion of anarchy, not capitalism. The evils of the world were not to be blamed on economic theories, because in Middle Earth, economic theories do not exist.

Where did the evil come from, then?

“The evil in the world as portrayed by Tolkien has nothing whatever to do with social or economic causes. It is evil, pure and simple. Consequently there is no need for change of socio-economic conditions, the environmental conditions of life, relations between different classes, etc., etc. – all these things which make up the very fabric of a society, any society, are perceived by Tolkien as totally beyond any need or possibility of change.”

This quote is the best explanation I have seen of the economic and cultural life of Middle Earth, or rather the lack thereof. There are no intricate descriptions of societal structures because such things are not important in the Middle Earth world– it does not matter whether there is a democracy or a monarchy, capitalism or socialism, free trade or no trade, free speech or censorship. Evil is its own malignant entity, not an emergent attribute of human civilization, so the daily life of the citizens of Osgiliath, or the Dale, or Rivendell is simply unimportant. An army of good squares off against an army of evil, and what more could you possibly want to know?

The Economics of Middle Earth, as Gleaned From a Few Stray Facts

Although there is no coherent structure to the economic and political relationships of the inhabitants of Arda, occasional suggestions of economic activity do occur.

We know, for example, that money existed. References to coins appear a small handful of times in all of his tomes. More tellingly, Tolkien’s invented languages do contain reference to trade and economic activities; the proto-Elvish language had a word for “trade,” “tradesman” and “commerce.” This suggests the practice of trade did exist, since they could name it. But no clue is given as to who minted the money, nor how the trade system worked, or whether different kingdoms had different coinage.

In this excellent article on The Merchants of Middle Earth, the author painstakingly enumerates the occasions in Middle Earth’s history in which trade probably would have occurred. Because there was contact between the kingdoms and races, and because some nations and races were richer than others, with their relative status changing through time, presumably some sort of waxing and waning of national GDPs was occurring. But if each nation jealously guarded and refused to trade the most valuable goods it produced — good luck getting mined jewels from a Dwarf or a horse from the Rohirrim — what sort of trade was happening?

The single biggest tip off that some sort of large scale trade activity must have occurred in Middle Earth is the simple fact that Dwarves, according to Tolkien, did not grow their own food. For thousands of years, then, they were trading with someone to get it. But who? And what for? The Dwarves spent an awful lot of time mining for valuable things like gold and Mithril — given how rare these were in the rest of the kingdom, it is hard to imagine some dwarf never said, “Hey, I know! Instead of trading this mithril with other dwarves, who already have tons of the stuff, I’m going to walk over to the city of the Men and get a much better deal for it! Wow, I think I just invented arbitrage!”

We do know that gold had value in Middle Earth, as seen by the bickering over who would get Smaug’s treasure after the dragon was killed. But why should Middle Earth’s inhabitants want the gold baubles? “Because it’s treasure” is a meaningless answer when there is no indication that the treasure could be traded to anyone for anything. Of course, maybe the Dwarves just collected the gold so they could sit around and stare at it. Some of the Dwarves, at any rate, very clearly coveted gold, not as a medium of exchange, but rather as something of value in and of itself.

But the Men wanted the gold too, and not merely so they could sit around and stare at it. But why, then, did they want it? Was gold used for currency? If so, who accepted it?

Possibly Hobbits. True, Hobbits were self-sufficient, and lived in a rural agrarian society, primarily growing crops for their own needs and not interacting with the outside world. But there was one glaring exception to their isolation. While imports to Shire did not seem to occur, Hobbits had at least one notable export: good old pipeweed. The richest families in Hobbiton dealt in pipeweed, too, suggesting there were gains to be had from its trade.

Likewise, the only kingdom in Arda that dealt extensively in trading with other lands was also the richest kingdom. The Rhûn (that’s Middle Earth for “Asians”) apparently did have trade networks, and Rhûn-based trade resulted in the only occasion in Tolkien’s novels in which economic activities was used to advance the plot. The scene comes about when Bilbo and the rest of the Dwarves escape from the elves of Mirkwood, by means of a unique trade pathway:

The men of Esgaroth traded with Dorwinion (a human realm on the fertile coastal plain on the west shore of the Sea of Rhûn) in a unique way; wine barrels were floated down from Thranduil’s caverns in Mirkwood (the Elves were known as copious wine drinkers, as found in the Hobbit) along the Celduin down to Esgaroth, where they were redirected to Dorwinion. The wine was then paid for and filled with the necessary goods before being shipped north once more, and the cycle of trade resumed once more. These barrels were also quite large, for they could easily fit a Hobbit and 13 Dwarves (even the extremely fat Bombur).

And, finally, although it is a minor footnote, there is at least one race in Middle Earth that is well known for its economic activities. The Beornings (a race of shapechangers, Men that turn into bears) specialized in baking, and at least before they suffered some unpleasant experiences and became isolationists, they were famous for selling their delicious cakes to other races.

Why the One Ring Had To Exist, or Why The Lack of Economics in Fantasy and Scifi Novels Does Matter

The emergent social systems resulting from human interactions on a large scale — economics, politics, law, culture, etc. — are not just world-building minutia that provide useful trivia facts for science fiction and fantasy geeks to share among themselves. Every story is necessarily dependent upon the constraints of the world it is set in, and so the economic structure of a fantasy world determines a novel’s outcome.

With contemporary literature, the human infrastructure behind a story’s setting is obvious: it is an approximate version of our own. We already know what the rules are and how to apply them, so there is no need for an author to be explicit — we can assume that the character is operating in the same system that we ourselves operate within every day. If a character shoots someone, she better have a good excuse or else a good escape plan, because in our world the police will take action against her. If a character is going to make a round-the-world trip, he better have an explanation for how or where he got the funds, because we know plane flights are not free.

In speculative fiction, however, we do not have the benefit of our own first-hand experience to know what the applicable societal rules are. If one character shoots and kills another, we cannot assume there is some system there to react, or if so, how. Perhaps the murdered character is a species or class for whom killing is acceptable and not a subject of official interest, or perhaps the relevant law enforcement authorities possess mind reading technology so making up an alibi is not even an option. Or, for fantasy novels, if one character gets stranded in a neighboring kingdom, we have no idea whether that will cause any financial problems. We need to know if all the lands use ubiquitous gold and silver, or will the character instead need to find a money changer?

That is why virtually all science fiction and fantasy authors do provide information about the economic system of their worlds, even if some do so unintentionally. The authors cannot help but explain it, at least a little.

For all my complaints about the silliness of the Sword of Truth series, Terry Goodkind was very aware of the economic model of his world. Goodkind even makes the disparity in resources a central theme of the battle between the North and the South. In the novels, Richard’s forces react to being on the losing end of an asymmetrical war by attempting a campaign to destroy the enemy’s supply lines, in order to slow the approach of the invading Southern hordes. Other tiny clues are offered, too — how the governments function, what the mundane laws of the lands are, how the economies of the smaller villages sustain themselves. None of that sort of detail is present in Tolkien.

I am certainly not arguing that the economic systems of fantasy worlds need to be made blatant. Harry Potter, for instance, never makes the economics of the wizarding world explicit (not counting, perhaps, an adventure or two in Gringotts, the wizard bank) — after all, for most of the series, the characters are children, and unlikely to be cognizant of such things. But whether or not Harry and Hermione ever sit down and discuss the intricate details of wizard fiscal policy, little indications abound that there is a larger world around the characters, one in which economics, politics, law, and the other ordinary infrastructures that civilizations have do indeed exist. From a scene with Hermione’s parents, for example, we know that it is possible to exchange wizard money for the British pound, indicating not only that there is economic integration between the magic and non-magic financial systems, but that something at least resembling normal human economic models also applies to the wizarding world. We also know entrepreneurship exists, from the Weasley twins’ opening of their own joke shop. We also get fed occasional hints about the secret interactions between high-level muggle officials and the wizarding world’s leaders, suggesting treaties and some sort of “international” law that applies not across national borders but within the same territory but across the muggle and wizard divide. The list goes on: We learn about the Wizards’ prison and justice systems, their media, and their charitable causes (such as house elf liberation).

And yet, in the Lord of the Rings, we do not have the answer to even so simple a question as “Do elves use money?”

This utter lack of economic structure is a severe constraint upon Tolkien’s stories, and is the primary reason Tolkien’s works will always be, at least for me, more equivalent to the Bible than to novels.

The law of scarcity is, by all appearances, inapplicable to Sauron. Need a million orcs, trained and armed, by tomorrow? Sure thing. Need to raise some cities for all those orcs to live in? Bam, there you go. Need something better than orcs to use as infantry? All right, we’ll suddenly invent Uruk-Hai and claim Saruman magically figured out how to raise an army all by his lonesome self at the isolated outpost of Isengard.

In the Lord of the Rings, the characters conveniently and inexplicably have access to resources when the plot requires them to, and conveniently and just as inexplicably do not have resources when the plot requires that they do without. The War of the Rings cannot therefore be resolved in any fashion that would be familiar to our own world: no war of attrition ending in Mordor buckling, no staging of a revolution among the enemy’s civilian population, no tactical victory on the battlefields, no political maneuverings that result in the enemy’s allies becoming your allies. Because no tactical victory is possible against an enemy with unlimited resources, and no peace can ever be negotiated with an opponent whose motivation is based on the desire for evil for evil’s sake alone, rather than a desire for more substantial aims which can be bargained for.

In a battle against an evil with unscarce resources, then, the only victory that is possible is a symbolic one. Not a victory based on strategy and macroeconomic trends, but a victory that can be set in motion by an individual character’s discrete acts and then carried out by forces inexplicable to science. Such a victory could be accomplished, for instance, by introducing a token imbued with magic properties — a token that, when destroyed, just so happens to simultaneously destroy the bad guy’s unlimited empire as well. Because a token, unlike a war, can be completely controlled by an individual; and a token, unlike a civilization, can be destroyed without reference to the larger socioeconomic structure of the world in which that token exists.

The Fellowship could never have raised an army big enough, nor designed battle plans clever enough, to defeat Sauron. Sauron is not bound by scarcity, and Sauron’s only utility is evil; the laws of economics do not apply to him. As such, Tolkien’s good guys could never have achieved the sort of victory that would be recognizable on Earth as we know it — the forces of good might have won a battle or two against Sauron, but they could never have won the war.

So instead of having Sauron defeated through conquests or strategic alliances, Tolkien just had two hobbits walk for a long time and drop a ring into a volcano.

It’s not a bad ending. But it’s the ending of a mythology, not a novel.

-Susan

See Also: Vol. 1, Jack London, & Vol. 2, Terry Goodkind.

One problem with commitment devices, however, is that the most common form of them — i.e., announcing to people what your intended goal is, so you have the fear of being judged to spurn you into action — may actually be psychologically counter productive:

Tests done since 1933 show that people who talk about their intentions are less likely to make them happen.

Announcing your plans to others satisfies your self-identity just enough that you’re less motivated to do the hard work needed.

In 1933, W. Mahler found that if a person announced the solution to a problem, and was acknowledged by others, it was now in the brain as a “social reality”, even if the solution hadn’t actually been achieved.

Not to mention, telling others may not even be all that motivating when faced with making a short term choice. It is too easy to convince yourself that either your peer group won’t notice your failure to live up to your commitment, or that they will but it will not severely impact their feelings toward you.

So rather than telling others of a plan, another common form of a commitment device is to use a commitment device not based in social evaluations but in wagering a sum of money (or other desired resource) on your ability to carry through with the goal. For instance, writing a check to a political party you are not aligned with and vowing to mail it should you fail to stop smoking. A problem with these commitment devices, however, is that if you fall short of your goal, you might not carry through with inflicting the self-imposed penalty afterward either. As a way of remedying this problem, a couple of economists even started StrickK, a website that allows you to irrevocably commit to donating money to a specified charity if you fail to meet your desired goal.

That’s a good step, but it doesn’t completely limit your future choices, as it may well be too tempting later to simply lie to StickK and claim you lost those 15 pounds when you really didn’t. Without another human to evaluate your claims of success and to enforce the penalty if you have not, you have not sufficiently limited your choices ahead of time.

So the problem, in short: If (1) informing others of your plans won’t work because their possible vague disappointment in you is not a strong enough motivator, and because the act of telling your plan makes you less likely to carry through with plans, and (2) non-peer group based commitments are far too easy to fake (at least until we develop AI!) and carry a risk that the penalty will never be imposed, how can a commitment device be designed that is both hard or impossible to fake but also carries a concrete penalty?

The solution: a commitment device that irrevocably commits you to aggravating the ever-living daylights out of your friends if you fail to carry through. Say hello to the Tyrant Alarm Clock.

The Tyrant Clock, designed by Alice Wang has to be the meanest alarm clock concept ever invented. Some alarm clocks make a terribly annoying noise or require you to complete a physical task to shut them off. There’s even some now that will shake your bed until you’re up. Not the Tyrant Clock. This clock takes waking up into pure psychological warfare territory. You’re not going to hear many alarm clocks called pure diabolical evil but there you go, you just did.

The clock syncs up with your cell phone, randomly goes through your contact list, and then calls someone different every three minutes after your intended wake up time. It displays in a large size the name of the person who’s about to get their own wake up call from you. The potential for it to call someone and in some way completely ruin your life is huge. A disaster waiting to happen, which would make it the ideal alarm clock.

Sure, you may want to put the clock across the room (preferably next to a large pot of freshly brewed coffee) to keep you from turning it off and slinking back under the covers again. But once you account for that problem, this clock is a pretty effective way of ensuring that what’s in your best interest for your long-term utility (waking up on time) is in direct alignment with your short-term utility the next morning (not having a randomly selected friend hate your guts).

-Susan

This post on snap judgments and taking superficial first impressions seriously summarizes the basic situation nicely:

If you’re applying for a job, you want good credentials so your resume doesn’t go straight to the circular file. The key elements in this story are (a) high rewards, and (b) high search costs. Since the rewards are high, lots of people try to win; and since lots of people are trying to win, it’s too expensive to carefully study all of the candidates. The result: People try really hard to make a good impression, and anyone who fails to make a good impression pays a heavy price.

There are a lot of people “trying to win” right now, so employers are forced into ever greater reliance on arbitrary filters, in order to pick out a rough list of the candidates for whom spending more on search costs is most likely to offer a good ROI. While conducting the initial screening, employers know there’s a high rate of false negatives, but accept this as a necessary cost; even if the “best” candidate is accidentally overlooked in favor of a candidate marginally worse, the company is still better off, as it is not efficient to spend ten times more in search costs merely to find the candidate that is just a tiny bit better.

This is a problem for me, as, unfortunately, I am pretty sure I am not making it through that initial sorting. That is, right now, I am doing a poor job at signaling to employers my potential value.

I look decent on paper: decent class rank at a decent law school with the usual decent assortment of accomplishments and attributes on my resume. Not a rockstar by any means, but nothing that should flag me as a potential axe-wielding sociopath to be avoided at all costs. However, to an employer sorting through resumes and making a couple hundred snap judgments, I would imagine I also look pretty boring. Boring is not necessarily bad — if I looked like I had all the personality of a box of Shredded Wheat, that might actually count in my favor so long as I boasted an editor position with a law review and a couple summers at Skaddington McKirkland & Jaworsknight.

But I don’t. So as it stands, there is very little reason for an employer, in an initial evaluation, to tag me as a candidate worth expending additional search costs on.

To make things worse, right now I have another factor working against me: it has been more months than I care to count since graduation, and I still do not have a job. To employers, this can be taken as a strong indication that I am not likely to be a good employee, and may have some hidden flaws that my resume is not revealing. It makes sense for someone hiring to assume that, “Well, if this young lawyer has been unable to secure a job from anyone she has previously applied to, that raises an assumption she was not good enough for any of them, and therefore is likely not good enough for me either.”

Effectively, I am pre-screened as a candidate who likely should not be hired by all of the many employers that have previously failed to hire me. It is simply not worth it to an employer to spend extra resources on giving me a closer look, when presumably other firms already have given me such a look and found me to be wanting.

So my problem is this: I need to find a strategy that increases the odds of an employer deciding to invest further time and money on obtaining a closer evaluation of me. Once they do that, they will, hopefully, discover that I am a capable and effective lawyer, and worth hiring. I believe this to be true; if it’s not, well, I have far bigger problems to deal than merely getting hired, and addressing the whole signaling issue would be kind of unnecessary. So for discussion purposes only, I am just going to stipulate that I am in fact the employee that any firm or agency making a hiring decision might like to find. How, then, can I quickly signal to employers that (1) I am worth taking seriously, and (2) the signal is very likely to be truthful?

I’ll be discussing this more here, both how it might particularly apply to my own situation and strategies for employee signaling in general. And who knows, with a good deal of luck, maybe in the near future I’ll even get some first hand experience on what signaling strategies work.

-Susan

The importance of central bank independence cannot be overstated.  Study after study has shown that a central bank’s ability to make interest rate decisions free from political pressure is one of the most important variables in long-term performance.  (Indeed, my economics thesis at Bates discussed that subject.)  Despite all that clear evidence, Ron Paul and friends want to subject the Fed’s interest rate decisions to Congressional scrutiny.

Look, I’m all for limited government, and I understand the Ron Paul disciples’ instinct to oppose an institution as seemingly powerful as the Federal Reserve.  Even so, we need an institution to direct monetary policy, whether we like it or not.  Do we really want Congress (current approval rating: 27%) to direct that policy?  Do we really want veterinarians calling the shots over trained professionals?  As Barry Ritholtz explained:

While I have been critical of the Federal Reserve (especially the Greenspan years), my beef with them has been their judgment and decision-making process. Congress, on the other hand, is a whole different matter. Its not their judgment, but rather, the fact they are owned not by the American people, but by lobbyists, and corporate interests. They have become structurally deformed.

How weird is it for me, who spent so many pages blaming the Fed for a lot of the recent crisis, to find myself in a position of defending them from outside political pressure? The choice we face is the recent Fed regime of secrecy, nonfeasance, irresponsibility, and easy money — versus something possibly likely to be a whole lot worse.

To be found in “contempt of Congress” would require an improvement in opinion of them.

If the Fed has been a major source of problems, Congress is much worse. They were the great enablers of the crisis, readily corruptible, bought and paid for by the banking industry. I find Congress to be the worse of two evils — lacking in objectivity, incapable of producing legitimate regulatory review.

If the Fed is Wall Street’s bitch, then Congress is the Street’s whore.

Some would argue [PDF] that an audit is not too much to ask.  To a certain extent, they’re right, and that’s why the Fed is currently subject to audit in most spheres.  But the mere perception of political influence in monetary policy, even if never exercised, is enough to distort the market and seriously @#%T^ up the money supply.  The market knows that politicians with an eye toward the short-term may be willing to use an audit (or the threat of an audit) as just another bargaining chip to gain political goodies.  (It is my understanding that audit threats are already a tool currently used to rein in other agencies.)  The market will, therefore, punish the dollar, regardless of whether or not Congress uses the audit as an in to further control.  Don’t believe me?  It’s already happening.

Paul has advanced his position by constructing an “us vs. the evil bankers” narrative that his followers have eaten up.  Frankly, I don’t understand the logic.  Because they hold debt, bankers don’t want to see an inflated currency — inflation makes the money they get back from borrowers worth a lot less than it was worth when lent.  So even if it were true that bankers “ran the Fed” (which is a dubious premise, to be sure), they would still produce beneficial monetary policy.   

Shame on you, Ron Paul, for not doing your economics homework.  Shame on you.

-Michael

The study behind the article compared rates of credit card debt — i.e., having any credit card debt at all, not the amount of it — and found it to be associated with the presence of certain forms of MAOA. As far as the authors are aware, “this is the first article to show a specific gene variant is associated with real world economic behavior.”

MAOA is a gene that does something scientificky to brain chemistry. Variants of MAOA that are less efficient in the way they metabolize serotonin and other compounds have been associated with increased impulsiveness, aggression, and addiction. MAOA is basically one of the only genes I can actually name, because it crops up in pop science news articles every other month or so. (The only other gene I can name is sonic hedgehog, but that’s for more different reasons). Among many other attributes, MAOA’s been linked to increases in likelihood of joining a gang, or if in a gang using a weapon, rates of alcoholism, and suspecpability to sugar pills.

And now, possibly, it’s also been linked to rates of credit card debt. From the study:

Because credit card debt is a relatively expensive form of debt, our prior intuition is that, all other things being equal, it would be used more by those individuals seeking immediate gratification, displaying less consideration of future consequences, and reduced information processing. Hence, we hypothesize that people with less transcriptionally efficient alleles of the MAOA gene are more likely to accrue credit card debt.

The study concludes that “the results presented here refute the blank slate theory of economic behavior.” By ‘blank slate,’ the authors are not referring to the traditional blank slate theory, which holds that humans have more or less no natural imprinting, but rather to economic approaches that treat all humans as having the same natural imprint — the idea that we are all phenotypically Homo economicus.

While the idea sounds very tidy in theory — a gene that controls the rate of future discounting! I bet we can link this to the financial crisis somehow. Quick, someone check the DNA of Wall Street traders! — I’m not quite converted yet. It strikes me as being way too likely to result in the flourishing of the same just-so stories that evolutionary psych always falls prey too. Confirming that “impulsive people have more credit card debt” just isn’t particularly revolutionary. While linking it to a specific gene gives it an added dimension of coolness, it doesn’t actually add anything to economics on its own anymore than linking impulsive behavior to unstable childhoods does. So it’s neat, but economists don’t need to be rushing out to get their PhD’s in molecular biology any time soon.

-Susan

The average market price seems to be around $35 hour, though if you want the best coaching, you’ll have to shell out $50 for a lesson. For the price-conscious Halo3 student, however, there are economy options. Such as hiring this enterprising 13 year old for the bargain rate of $10 an hour. (And for the status-conscious, you can even buy a year’s virtual friendship with a pro for only $35.)

While the websites are not “normal” professional-looking, they are probably well designed for the target market. They come complete with online payment, Halo Resumes, customer testimonials, and even little windows to click on to “Chat with a Customer Service Rep.”

Some of them seem to even be getting an education in supply and demand. Such as when there’s a shortage on a product, slide up the demand curve:

I’ve been doing lessons for Halo 2 and Halo 3 for nearly a year now and have nevered [sic] raised my prices before. However, I’ve gotten to the point where I have a constant backlog of lessons so I’ve decided to raise my prices.

Kids these days. Back in my day, there was no one you could go to for lessons on beating Bowser in Mario Bros. or shooting lessons for Duck Hunt. (Free tip: to improve your accuracy, put your gun so it actually touches the TV screen. Also, don’t shoot the dog.)

They even have helpful tactical jumping lessons. It’s like parkour for people without upper or lower body strength.

And while I recognize these 13 year olds could probably kick my butt at Halo, I do think I could be competitive with them in the Halo3 Services market. No, not as a Halo coach, no one would hire me for that. Instead, I’ll offer, for a small fee, the once in a lifetime opportunity to play Halo with a real live girl.

Judging from the Halo players I run into, the demand is certainly there. And it is most definitely an underserved market.

-Susan

p.s. Hey Michael, want to go into business with me? You can offer lessons in erudite trash talk, you’re the undisputed master of that.

-Michael