Hey cooks! Use Bing for recipe searches

Lynne Kiesling

OK, so this is pretty cool and useful:

Today Bing, the relatively new search engine from Microsoft, launched a feature that lists recipes when users search for food items. Search “chicken,” for example, then click the “chicken recipes” tab, and Bing delivers chicken noodle soups and chicken schnitzels from major databases like Allrecipes, Delish, and bonappetit.com’s sister site, Epicurious.

The searches will also include calorie counts, photos, etc. Pretty nifty! And the competing search engine thing is very good too …

Tim Harford on Hahn-Passell and Regulation 2.0

Lynne Kiesling

Courtesy of Tim Harford’s blog at the Financial Times (which you should be following, or following via Twitter) is a link to this “Devils and Details” post from Bob Hahn’s and Peter Passell’s new blog, Regulation 2.0. Their comment and the links embedded in the post are worth considering on the topic of carbon policy:

In the beginning, economists touted emissions taxes and cap-and-trade systems as efficient, market-friendly methods for reducing pollution. The idea: put a price on pollution equal to the damage it caused or decide what level of emissions was acceptable to society as a whole, and then let businesses decide how to minimize the cost. The two approaches – put a price on emissions or put a limit their total quantity — were thought to be equivalent means to the same end.

Then came Martin Weitzman, a very clever economist from Harvard, who showed decades ago that the choice between the price and quantity approaches mattered a lot when policymakers weren’t certain what the costs and/or benefits of pollution control would be. And now Round Three: In a recent, provocative piece [Download Here], David Weisbach of the University of Chicago questions Weitzman’s conclusions. He concludes that the optimal approach may change if you make the (realistic) assumption that policymakers can alter course in response to new information.

And then there’s another factor to consider: the systems can be designed to look a lot like each other. For example, a cap-and-trade system with a “safety valve,’’ which effectively limits the maximum market price of emissions permits, in many respects mimics the impact of an emissions tax.

So where does that leave us on climate change policy? The key is not to get lost in the trees – any market-based system that rewards people and businesses for emitting less carbon would be a big step forward.

Their posts will focus on energy, environment, telecom, alcohol, financial, and other forms of regulation. I like the spirit of “Regulation 2.0″, because Regulation 1.0 is certainly obsolete in the areas I study, but inertia in adapting and evolving is very strong, and change comes too slowly.

Citizens United, competing free speech, and “associations of citizens”

Lynne Kiesling

I’ve spent the past several hours reading the Supreme Court’s opinion in Citizens United vs. the FEC; the document is available at the Supreme Court web site, and I encourage anyone who has an opinion about or interest in political expression and freedom of speech to read it. In other words, every American citizen, and our republic, would benefit from reading it and considering the ideas contained in it.

Like many others (such as Matt Welch and Will Wilkinson), I am stunned at and baffled by the misconceptions and the degree of deliberate misunderstanding of the provisions of the First Amendment that opponents of this decision are exhibiting (and that 4 jurists actually argued in favor of continuing to restrict freedom of speech and freedom of access to free speech). Even “right-wing” commentators like David Brooks oppose the decision (according to the comments I heard him make on NPR on Friday evening), and I think many opponents throughout the political spectrum are conflating, falsely, their desired concepts of speech and expression with their dislike of the outcome that is clearly divergent from their idealized notions of what a perfect polity would be.

Perhaps it is my innate cynicism, or it may be my universal disdain for politics and its inevitable cronyism that is seeing such high and visible expression these days, but I think that those who want barriers to corporate forms of political expression because of its injection of money into politics are naive in the extreme. Put another way, money has always influenced politics, and it always will, so comparing real-world politics to an idyllic, utopian republic is an exercise in futility. Wherever we use political institutions to decide outcomes that affect the well-being of any collection of individuals, those individuals are going to attempt to influence the processes leading to those outcomes. Even under BCRA restrictions on corporate political expression, lobbying, rent seeking, and money have continued to determine political outcomes. Government censorship of some speakers has not changed that, and has instead, as the Supreme Court’s decision puts it, censored political speech (pp. 38-39, pdf pp. 45-46):

The censorship we now confront is vast in its reach. The Government has “muffle[d] the voices that best represent the most significant segments of the economy.” McConnell, supra, at 257–258 (opinion of SCALIA, J.). And “the electorate [has been] deprived of information, knowledge and opinion vital to its function.” CIO, 335 U. S., at 144 (Rutledge, J., concurring in result). By suppressing the speech of manifold corporations, both for-profit and non-profit, the Government prevents their voices and viewpoints from reaching the public and advising voters on which persons or entities are hostile to their interests. Factions will necessarily form in our Republic, but the remedy of “destroying the liberty” of some factions is “worse than the disease.” The Federalist No. 10, p. 130 (B.Wright ed. 1961) (J. Madison). Factions should be checked by permitting them all to speak, see ibid., and by entrusting the people to judge what is true and what is false.

This decision makes it clear that what the First Amendment protects is speech, regardless of its content and regardless of the form of the speaker. That protection is essential to a healthy republic grounded in democratic processes, even if we disdain or distrust the speakers. As stated elsewhere in the decision (p. 24, pdf p. 31):

Quite apart from the purpose or effect of regulating content, moreover, the Government may commit a constitutional wrong when by law it identifies certain preferred speakers. By taking the right to speak from some and giving it to others, the Government deprives the disadvantaged person or class of the right to use speech to strive to establish worth, standing, and respect for the speaker’s voice. The Government may not by these means deprive the public of the right and privilege to determine for itself what speech and speakers are worthy of consideration. The First Amendment protects speech and speaker, and the ideas that flow from each.

One phrase that recurs frequently in the decision is “citizens and associations of citizens”. I find this phrase particularly meaningful, and to me it reflects the understanding that the American republic is grounded in individual rights, including both rights to free speech and rights to free association, including association with and within corporate entities. Those corporate entities are heterogeneous, from Exxon to the Sierra Club to the National Rifle Association to the AFL-CIO to Citizens United. The Constitution and this decision respect and protect the importance of the rights of individual citizens to determine for himself and herself what speakers and what forms of speech are important and material. By placing restrictions on the forms and/or sources of speech, the Government impinges that right, and that is a right that is at the core of individual autonomy and self-determination.

This line of thinking gets to where I think the opponents of this decision misunderstand and misinterpret it the most. The Constitution and the Bill of Rights exist to restrain government power. By definition, government has a monopoly on force and can exercise coercion more readily than other entities in society, including corporate entities (for-profit and non-profit). If a company pays to publish a book that advocates for a political candidate, as individual citizens we have the opportunity and the right to listen, to ignore, to publish a counter-argument; increasingly with the Internet more and more of us have the means to do so at much lower cost. Different speech, different speakers, different forms of speech all compete against each other in “the ‘open marketplace’ of ideas protected by the First Amendment” (p. 38, pdf p. 45). Money will always be a part of that dynamic. Only by having the freedom for all ideas to compete can we hope to restrain the venal and illicit intersection of money and politics that has disillusioned so many of us despite the existence of the BCRA restrictions.

The federal government, however, is a monopoly, and its exercise of force and coercion cannot be undermined or counteracted through an “open marketplace of ideas” in the ways described above. For that reason, to have any hope of a healthy republic, our default should be to restrain government power and coercion rather than restraining the speech of corporate entities, because corporate entities compete with each other, and with other types of speakers, in political speech. The government, on the other hand, faces no competition — it has a monopoly on the exercise of the sort of force and coercion that results in censorship when the First Amendment is not interpreted to protect all speech.

Others more knowledgeable than I have written intelligent comments on this decision, including law professor Larry Ribstein, Tim Lee, and law professor and former FEC Commissioner Brad Smith. I also like Ilya Somin’s argument for why corporate rights and property rights are part of the bundle of human rights, an interesting twist on interpreting this decision; he says that opponents to this decision are inaccurately conflating a right with the means of exercising a right (which is a more eloquent way of saying what I did above, or of saying that the First Amendment protects speech, not speakers).

Note also that the decision leaves intact requirements for information provision and disclosure, which do not abridge the First Amendment rights to freedom of speech among citizens and associations of citizens. Finally, I like Will’s closing comment so much that I’m just going to take it:

I see this ruling as vindicating the importance of equality of voice by protecting the rights of individuals and associations to speak out on behalf of their interests and values. Progressives clearly see the ruling primarily as some kind of corporate-empowerment initiative. But you can’t really take on Big Agra or Wall Street unless you can organize to speak out against the Chuck Grassleys and Chuck Schumers when it really counts.

The Founders were deeply skeptical of corporations

Michael Giberson

Many keystrokes this week have been devoted to praising or damning the Supreme Court decision in Citizens United v. Federal Election Commission.  I’m inclined to agree with the praisers, but others are more competent to address the legal and political issues addressed by the court.  I just want to pass along a useful bit of historical observation from Streetwise Professor:

Stevens noted that the Founders were deeply skeptical of corporations.  Indeed so. Scalia noted that there are so many corporations them today.  Also true.  The interesting question is how we got from A (Stevens) to B (Scalia).The story is told in the North, Wallis and Weingast natural state book Violence and Social Orders I’ve blogged about several times, mostly in the context of Russia.  The relevant chapter is primarily based on John Wallis’s work.  The basic story is that hostility to corporations–reflected very well in Adam Smith’s Wealth of Nations–was due to the fact that historically, English corporations were created by the crown, and were essentially very profitable favors provided to the politically connected.  They were, in NWW terms, part of the “closed order” of the natural state, in which access to certain contracting forms was limited to a select powerful few.  This animus towards corporations was inherited in the United States, but in the early years of the 19th century, state legislatures confronting issues associated with the financing of new infrastructure turned the corporate form into a prop of an open order system in which this contracting form was made available to all.  Rather than limit the right of incorporation to an elite, they made it available to everybody.  The system changed from one in which legislatures had to grant every incorporation, to one in which pretty much anybody could incorporate if they met a set of general, universally applicable requirements.  Hence, the proliferation of corporations.

Thus, Stevens was historically right, but his inference was wrong.  The kind of corporation that Adam Smith and the Founders detested was a quite different from the modern corporation that developed in the 19th century.  The name was the same, but the entire conceptual and legal basis for corporations old and new were completely different.  Indeed, almost inversions of one another. Indeed, the transformation of the corporation from a creation of the closed order to an essential element of the emerging open order explains the empirical phenomenon that Scalia cited.

I’ve been meaning to read the North, Wallis, and Weingast book since it was published, but haven’t yet secured a copy. Guess I ought to get to it.

Pre-holiday price gouging: The view from six weeks later

Michael Giberson

A “price gouging” search brings up pre-holiday complaints about the online secondary markets for Zhu Zhu Pets (like via Amazon and eBay):

There is a move on auction sites such as Amazon and eBay calling for buyers to boycott any vendor who is price gouging the public on the much wanted Zhu Zhu Pets.These ‘retailers’ purchase entire inventories of the toys when they arrive on store shelves and move them directly to online auction sites for upwards of three to four times their retail value.

Zhu Zhu Pets can be found on Amazon.Com, but they are usually going for outrageous prices.  There are currently dozens of auctions selling Zhu Zhu Pets for far above their retail values.   See a current listing of Amazon’s Zhu Zhu Pets In Stock.

… Patricia Oquin, from Max Meadows, Virginia writes about vendors on Amazon.com  ”Do not do business with these people that are ruining Christmas for our children. I think this outrageous price gouging should be illegal, These pets sell for $8.00 at Walmart (if you can find them). This particular “Mr. Squiggles is selling here today for $52.99! Wonder why you can’t find them at retail? Because of greedy people like this! Don’t play into these deceptive practices, you will just encourage more of this greed.”

The article suggests that resellers are “stealing the Christmas out from under children.”  My reaction was that the resellers were only redistributing the supply of the toys so that no additional children were having their Christmas “stolen.”  In fact, at the higher price fewer children likely ended up with multiple Zhu Zhu Pets, meaning it is likely that a larger number of children actually were delighted to obtain the little furry toy as a holiday gift.  Really, therefore, we could say that the too-low initial retailer prices threatened to “steal” Christmas.

But I like one of the comments posted better:

… “stealing Christmas” from our kids? If not having this toy means Christmas is ruined then you’ve already stolen the meaning of Christmas from your kids.

I’m more interested in the usage of the term “price gouging” in this kind of situation. The interesting thing about a site like eBay is that the reseller could have offered a Zhu Zhu Pet for any arbitrarily small price and then let the bidding begin, and still end up selling the devices for four or five times the original retail price.  The reseller gets accused of price gouging, but clearly the bidders are doing it to themselves.

Implicitly the parents recognize the problem – they are in competition against all other prospective buyers and it is other buyers who are driving up prices – and that is why the urge to call upon others to “boycott any vendor who is price gouging the public.”  After all, if one parent convinces enough other parents to boycott the vendors (i.e. drop out of the secondary market), then it becomes much easier for the first parent to get what he wants.

In any case, the price of Zhu Zhu Pets has fallen dramatically over the past several weeks.  While once the sought-after Mr. Squiggles could fetch over $50, he is now available via Amazon for as low as $6.60.

Thanks Pete!

Lynne Kiesling

Many thanks to Pete Boettke for his endorsement of me and of Knowledge Problem as resources for energy economics (and particularly energy-related economics from a coordination perspective). I think of Pete and his fellow bloggers at Coordination Problem as some of our closest fellow travelers in intellectual space, and am thus honored by his compliment.

Congratulations to Tom Casten!

Lynne Kiesling

Tom Casten, a pioneer of recycled waste energy and combined heat and power technologies, recently received a well-deserved Inspiring Efficiency-Leadership award from the Midwest Energy Efficiency Alliance. For some background on Tom’s outstanding work that aligns economic profit and environmental benefit, this Atlantic article from May 2008 is a good place to start. Tom’s ideas and his relentless mental and physical energy have always inspired me, and I congratulate him on this well-deserved award.

We’ve paid a lot of attention to combined heat and power and recycled waste energy here at KP, and have followed the work of Tom Casten and his son Sean with great enthusiasm. Nothing is more consistent with economic efficiency than entrepreneurs profiting from reducing wasted resources.

Some economics of cable content bundling

Lynne Kiesling

Jim Surowiecki has a New Yorker column on cable bundling that does a good job of explaining some of the reasons why bundling benefits all interested parties in the transaction — the cable provider, the content provider, and the consumer. His analysis provides several examples of comparing a policy with the most likely counterfactual, as in this discussion of a la carte pricing:

So consumer advocates have been pushing for a system of so-called “à la carte” programming, expecting that this would drive down prices for consumers.

In fact, it probably wouldn’t. The simple argument for unbundling is: “If I pay sixty dollars for a hundred channels, I’d pay a fraction of that for sixteen channels.” But that’s not how à-la-carte pricing would work. Instead, the prices for individual channels would soar, and the providers, who wouldn’t be facing any more competition than before, would tweak prices, perhaps on a customer-by-customer basis, to maintain their revenue.

He then points out two consumer-focused reasons why the demand for a la carte options has never been sufficient to bring them to market. First, it’s very common for people to prefer bundles because they reduce transactions costs and search costs; second, bundles create option value for consumers (I don’t care about watching that channel right now, but I might in the future, so there’s a value to having it).

The appeal of bundling is partly that it reduces transaction costs: instead of having to figure out how much each part of a package is worth to you, you can make a blanket judgment. Bundling eliminates the problem of fretting about small expenditures, which may be one reason that flat-rate pricing is very common in the vacation industry (cruise ships, all-inclusive travel packages, and so on). It also offers what economists call option value: you may never watch those sixty other channels, but the fact that you could if you wanted to is worth something. Many consumers also perceive bundles as bargains; getting a bunch of things for one price feels like a deal, even when it’s not.

But in this era of disintermediation and ease of streaming TV and video, isn’t that likely to push consumers to want more a la carte options? Sure, and that’s why he argues that it is in the interest of cable providers and content providers to avoid the short-term profit-motivated bickering over fees (such as that between Scripps/HGTV-Feed Network and Cablevision) so they can maintain the long-term benefit of consumers who are interested in bundled goods.

Fish populations surge in Oregon

Lynne Kiesling

Here’s a good piece of news from the fishery and common pool resource front: salmon and steelhead populations are dramatically larger in the Pacific Northwest than anticipated, and than they were last year.

… More than 680,000 Coho salmon returned to Oregon last year, double the number in 2007. The Coho run was so bountiful the ODFW called in volunteers to herd fish into hatchery pens. There were reports of creeks so choked with salmon, “you could literally walk across on the backs of Coho,” said Grant McOmie, outdoors correspondent for a television news team in Portland.

And ODFW forecasters expect more than half a million spring Chinook salmon to start swimming upstream in March, about two and half times 2009’s run, and nearly four times what came home in 2007. That would be the biggest spring Chinook run since 1938, when Oregon began keeping records of returning Pacific fish.

It is all part of a fish rebound no one expected. In 2007, one state office warned, “Populations of anadromous [or oceangoing] fish have declined dramatically all over the Pacific Northwest. Many populations of Chinook, Coho, chum and steelhead are at a tiny fraction of their historic levels.” The year before that, a naturalist in Seattle wrote: “It is hard to find the silver lining in a situation as dire as the collapse of wild salmon off the Oregon and California coasts.”

This is very good news. I don’t, though, think that we can declare victory in our challenging attempts to figure out how to govern the commons in fishing, which is extremely tricky and complex. In fact, I interpret this population surge as indicating just how complex a system a fishery is, where the set of interacting effects on fish populations is large — overfishing, pesticides, changes in glacial melting patterns, changes in ocean temperatures that affect how much plankton is available (and how nutritious it is), etc. etc. In such a complex system, flexible and adaptive institutions such as individual transferable quotas and catch shares can at least deal with the overfishing variable (earlier KP posts on fishing, ITQs, etc. are here).

The new Pickens plan problem

Michael Giberson

“It’s very hard to move mountains on energy policy, and Pickens has not yet even moved a hill,” said Amy Myers Jaffe, an energy expert at Rice University in Houston. “The problem that Pickens faces is that in this country if you are from the oil industry, people are naturally suspicious of what you say on energy policy.”

I don’t think this is a problem unique to the oil industry.  I think pretty much any billionaire jetsetting around and spending scads of money on a “public service” campaign would find it hard to move so much as a hill on energy policy (or health care policy or banking policy or anti-trust policy).

If George Lucas suddenly had a national energy policy that required lots of other people to spend their own money so that the world was remade in a way more to George’s liking, people would be suspicious.  Boone Pickens is not unique in this regard.

Quote from a recent Green Inc. story.