Do Budget Cuts Cause More Riots?

The UK riots continue as PM David Cameron and the Metropolitan police flood London with 16,000 officers in hopes of calming the civil unrest.

Critics have suggested that this is the behavior of a generation that's been ignored by the establishment. The anarchy on the streets of London has been attributed to high unemployment and disaffected youth, combined with a trigger event -- the death of Mark Duggan, shot by police last Saturday.

A couple weeks ago, Jacopo Ponticelli and Hans-Joachim Voth put out their working paper "Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009." It uses cross-country data in the 90-year period to examine whether riots and civil unrest increase as governments cut spending. They found a positive correlation between social instability and budget cuts.

From the Comments: A Market for Skipping Class

We got tons of responses to our Bleg last week on how professors should incentivize classroom attendance. Thank you everyone for your suggestions, a few concerns kept coming up in the comments:

  • Is the student a consumer?
  • Does attending class equate learning?
  • Are students a fair market to judge professors?
  • Do bonus/penalty systems work?

Most readers encouraged making the class interesting enough so that the professor is the sole incentive for students to show up. Others suggested an attendance incentive -- ranging from points for showing up, to test questions handed out at the beginning of class -- or a policy that puts students' grades at risk for not showing up.

If Handing Off a Family Business to the Next Generation, What's the Key Thing to Avoid?

What's the difference in performance between a family business where the CEO hands off leadership to a member of the family versus an outside CEO? That's one of the questions our latest podcast, “The Church of Scionology,” tries to answer. (You can download/subscribe at iTunes, get the RSS feed, or read the transcript here.)

Stanford economist Francisco Pérez-González has looked at the data to try to figure this out. (His paper "Inherited Control and Firm Performance" can be found here). He compiled data from 335 management transitions across a number of industries with concentrated ownership or founding family involvement. He compared 112 blood-related successions to 213 unrelated ones. Here, first, is a breakdown of successions by industry, and by family-handoff within industries:

Concierge Service for the Masses

While the rich and famous can have subscriptions to concierge services (such as the famed Quintessentially) to plan a vacation or book opera tickets, a recent Princeton grad is trying to bring such amenities to the masses. Harry Schiff, class of 2010, has started an online market for errands. He says he was sitting around […]

Is the NFL Missing a Huge Ad Opportunity?

Marketplace Segment Is the NFL Missing a Huge Ad Opportunity? Download/Subscribe Podcast at iTunes » Subscribe to RSS feed Listen Now Stephen Dubner recently talked to Marketplace Morning Report host Steve Chiotakis about why the NFL doesn’t sell advertising on its jerseys the way European soccer teams do. At the NFL’s annual London game this […]

A Government Official in Venture Capitalist's Clothing?

What do the X Prize, Google, and the Department of Education have in common? Stephen Dubner gives Marketplace host Kai Ryssdal a pop quiz that compares American aviator Charles Lindbergh to the Race to the Top education-reform program, which makes the government seem a bit more like a sleek venture capitalist than its typical bureaucratic […]

A Thirsty Economist Walks Into an A&W Restaurant …

… and something strange happens: there’s no more root beer. The economist was Freakonomics co-author and University of Chicago economist Steve Levitt. He was thirsty for a cold, frosty mug of A&W’s signature root beer. But, he was told, the restaurant was sold out of root beer. A while back, Levitt stopped by a KFC […]

A Really Hard Day’s Work

Ulet Ifansasti's stunning photographs depict working conditions at a primitive sulfur mining site in East Java, Indonesia. The miners use steel bars to hack off chunks of pure sulfur and carry loads of 100 to 200 pounds to the weighing station, making several trips a day. Daily pay is approximately $5.00.