I’ve had a lovely morning catching up on some of Russ Roberts’ EconTalk podcasts. In particular, I listened back-to-back to Michele Boldrin discussing intellectual property and Paul Romer discussing growth, including intellectual property institutions, with Russ.
As the show notes for the Boldrin podcast note, “Boldrin argues that copyright and patent are used by the politically powerful to maintain monopoly profits. He argues that the incentive effects that have been used to justify copyright and patents are exaggerated–few examples from history suggest that the temporary and not-so-temporary monopoly power from copyright and patents were necessary to induce innovation.” Listening to these two podcasts together provide an illuminating overview of the complicated economics of copyright.
Robert Rapier asks what is likely the least frequently asked question ever: “What if I’m wrong?“
Rapier explores that question with respect to his beliefs on peak oil and global warming, but it is good, all-around, general purpose question that should be put to more frequent use.
From Platts Power Line blog, a discussion of the 1958 law banning of futures trading in onions and suggestions that Congress should contemplate the lessons from that experience before it gets too exciting about clamping down on speculation in energy commodities.
The ban on onion futures trading, introduced by freshman congressman Gerald Ford of Michigan in 1958, was supposed to reduce price volatility in onion markets. It didn’t work.
A short article by Roger Gray in the 1963 Journal of Farm Economics indicated that storage season price volatility was significantly reduced during the years of active onion futures trading, as compared to the years before and after that trading. Related discussion by Holbrook Working in the 1963 Food Research Institute Studies also supports that conclusion.
Much more recently, David Jacks published “Populists versus Theorists: Futures markets and the volatility of prices” in the 2007 Explorations in Economic History. Jacks discusses several cases in which futures markets have been banned, and some cases in which a ban was instituted and then repealed. His main conclusion: “the results presented in this paper strongly suggest that futures markets were associated with—and most likely caused—lower commodity price volatility.”
Not every analysis of volatility and futures trading finds that futures trading always reduces volatility – the wikipedia article on the Onion Futures Act mentions Aaron Johnson’s “Effects of Futures Trading on Price Performance in the Cash Onion Market, 1930-1968″ as concluding onion prices were more stable after the ban (I haven’t actually read this study, so can’t vouch one way or the other for it) – but the overwhelming result from many, many analyses of the issue finds that futures markets tend to reduce price volatility.
SEE ALSO: Commentary by Jon Birger, What onions teach us about oil prices, Fortune.
REQUEST: Some references I looked over this morning indicated that an infamous onion futures market manipulation in 1956 fostered political support for the ban, but I haven’t found a good discussion of the episode. If you know of one, put a reference in the comments.
The Museum of Modern Art is hosting an exhibition of James Ensor’s work. Ensor was a late 19th-early 20th century Belgian painter, and the best word I can think of to describe his work is … eclectic. From the NYT review of the exhibition:
He was an aggrieved traditionalist with a pop-culture itch, equally entertained by Rubens and tabloid cartoons. He was a sophisticated artist who helped shape early Modernism, not in a Paris studio but in an attic room over a novelty shop in a resort town on the North Sea. …
He’s hard to pin down. Gothic fantasist, political satirist, religious visionary: one minute he’s doing biblical scenes, the next the equivalent of biker tattoos, in a style that veers between crude and dainty.
I’ve only seen some of his work, I think at the art museum in Hamburg Columbus, Ohio. Definitely worth a look if you are going to be in New York.
Of course, those of you who know me know that this post is nothing more than a thin veneer over an excuse to link to the outstanding They Might Be Giants song, “Meet James Ensor”:
By the way, note the way-sweet use of the brushes on the snare drum to hold the rhythm together. Lovely accompaniment to the voices, guitar, and accordion (*love* the accordion!).