Markets and information
There's more on the terrorism futures market here, from the guy who wrote my intro econ text. Also Haggai links to this article by Joseph Stiglitz in comments.
I find it interesting that everyone has such a negative reaction to the idea of markets as information aggregators. OK, I can understand the revulsion at the possibility that someone would profit from an attack, but as far as making accurate predictions based on the available information, markets are the best tool we have, especially when they're abstracted so that for instance the flow of information (about what's being bought and what's being paid for it) is widely known.
Yes, in the case of some markets, there are equity problems - when you're talking about the markets for housing or grain or Enron stock, there might be information flow impediments or resource distribution problems that lead to an unfair outcome, in some cases to an inefficient outcome. But when you're using a market as an information aggregator, these equity problems (and I do think they can be profound problems) simply aren't relevant.
Americans' attitudes toward markets are bizarre - for instance we don't use them to allocate pollution rights like the Europeans do. This essentially means we have a very inefficient environmental bureaucracy, but everybody has the right to pollute the same amount. Europeans impose taxes, which create a market for pollution, and the rights to pollute are allocated to the people who need them most. This may sound funny, but it means that the companies that can afford it given their cost structure get to do their polluting, while others don't. And since the cost structure depends on demand within the market, the system ends up aggregating the priorities of the citizenry. Setting the tax higher or lower will change the level of extant pollution, so that any acceptable level can be reached. For some reason Americans are caught up on the fairness of allowing one company to pollute more than another based on cost structure - but why are we talking about a "right" to pollute at all? I find this totally baffling.
Regarding markets and information, I think it's useful to have markets if they create incentive for people to analyze information. But I don't know how we possibly could have a greater incentive to analyze information about terrorist attacks than our fear of death and destruction on American soil. If somebody who wants to make a buck is more incentivized to think hard about available information than the CIA et al are, we need to light a fire (perhaps literally) under the asses of our intelligent people.I'm not sure death and destruction are th biggest incentive around - the whole idea here is that we're working with the probable and the possible, not the certain. So other certainties, things like the CIA's internal budgeting or personnel peculiarities, may create conflicting incentives. Maybe the fire (perhaps literally) solution is what we need.
There's some controversy brewing this morning over today's planned first Chicago flashmob. Here are the details (go here to be added to the list):
Time: Fri, Aug 01, 2003 05:30:00 PMI myself can't be there for reasons unrelated, but some are arguing that this isn't "in the spirit" of flash mobs past. For one thing, there is the concern that defacing a statue, especially on federal property, might not be such a good idea. I have to agree - the Federal Plaza is a high security area with makeshift concrete barricades everywhere, not the kind of building I'm going to fuck with...
The Hyde Park perspective
Slate's James Suroweicki has an interesting article about the whole free-market experiment in counter-terror intelligence. He details some of the market's successes as a predicive tool and argues that in this case it has been unfairly dismissed. I'm incline to agree - when I first heard about the project (in the context of calls for its dismantling) it sounded like it had some promise as a legitimate indicator. This is, after all, an area where markets excel, and there's every reaqson to think the project would have led to a more precise risk assessment by the Pentagon. I certainly would place more stock in it (forgive the expression) than I do in the yellow alert flashing across my FOX News ticker.
Of course, I sympathize with those who think it would be unseemly to have people profit from an attack. But I'm not convinced this isn't happening already - and I also think the issue could be handled more delicately. I reject the proposition (from BigOldGeek, and probably others) that the market would actually help bring about an attack. Making an investment and then perpetrating the relevant attack wouldn't just be incredibly stupid, it would be completely out of character for our fanatical friends.
More on publishers
Comments and other stimuli (from real life) have had me considering my post from the other day about the publishing industry and its motivations, etc. I have to admit, there is a tremendous selection out there now, and more than ever before, thanks to the near ubiquity of Borders and the internet (just discovered abebooks.com, truly the store to end all stores). But in the same way that the tremendous proliferation of available news still has people watching the same few networks, having more books within reach doesn't mean we're reading more different things. It makes me wonder whether the current publishing boom might simply be unsustainable - in the case of news, where cheap airwaves and the internet have made publishing literally a matter of a click or two, reporting and content have become the limiting factor. This is part of the reason blogs have emerged, and probably the main reason they started as so much delight in form (ie the primacy of the link) rather than in content. But with books, we don't have an annointed electronic format, so economies of scale still push publishers toward quantity rather than diversity.
Anyway, I still think it's deplorable that NU Press is closing the spigot on foreign lit in translation, but I guess it seems kind of absurd to be complaining about this in the middle of a publishing bubble and at a time of unprecedented availability and selection. Bemoaning the publishing industry's bestseller focus seems equally absurd, because the whole industry is on the verge of a massive transformation, as new technologies become available. Will this mean a complete democratization of artistic production?
A - B - C - D
The work of the devil
A good friend/tireless reader puts me onto the bizarre (yet wonderful) phenomenon of the flashmob - sort of a postmodern protest feel with some performance art retrofitting. Blogger cheeesebikini has extensive coverage and links. For interested New Yorkers especially there's more information here as well. Nothing yet in Chicago, sorry to say (but not that surprised).
As a student of foreign literature in particular, I find this phenomenon pretty disturbing. This part especially:
"A lot of foreign literature doesn't work in the American context because it's less action-oriented than what we're used to, more philosophical and reflective," said Laurie Brown, senior vice president for marketing and sales at Harcourt Trade Publishers. "As with foreign films, literature in translation often has a different pace, a different style, and it can take some getting used to. The reader needs to see subtleties and get into the mood or frame of mind to step into a different place. Americans tend to want more immediate gratification. We're into accessible information. We often look for the story, rather than the story within the story. We'd rather read lines than read between the lines."Obviously there's the whole "Americans are contemptuous of other cultures" angle, but the idea here is just that the philosophical, the reflective, the subtle, the cerebral are absent from our literature. Anecdotally at least, this seems to be true. I spent a good bit of my wknd trying to unearth some good Latin American fiction (if anyone can recommend even a moderately esteemed Bolivian author, I'd be forever in your debt), and what I ended up with was a lot of wonderfully challenging experimental writing that for the reasons above would never pass muster at a major American publishing house - stuff influenced by Borges in the same way American authors are influenced by... Raymond Chandler?
Anyway, I'm not meaning to sound like a comp lit snob, I've read and loved my share of neurotic Chandler knockoffs. But I think the enterprise of world literature is broader, more challenging, and frankly a bit more human than anything American culture has to offer. It's too bad about Northwestern University Press... I suppose now I'll have to start a foreign lit blitz of my own. Well, you can always start here.