What Do Skating Rinks, Ultimate Frisbee, and the World Have in Common? A New Freakonomics Radio Podcast
In last week’s podcast, Stephen Dubner talked with Clay Shirky about how the Internet works without a lot of oversight or regulation. This week, we talk about how the whole world works in that same way. The episode is called “What Do Skating Rinks, Ultimate Frisbee, and the World Have in Common?” (You can subscribe to the podcast at iTunes, get the RSS feed, or listen via the media player above. You can also read the transcript; it includes credits for the music you’ll hear in the episode.)
So what do all these things have in common? Self-policing. We start at the roller rink. There aren’t many rules, no referees, and yet things work. Just think about it: people careening around in circles, on a slick surface, with wheels on their feet — this should be total chaos. And yet for the most part it’s quite orderly. “Rinkonomics” is what Dan Klein calls it. He says the skating rink is “a window on spontaneous order.” Klein is a professor of economics at George Mason University; he has a long-standing interest in proto-economist Adam Smith, who famously described the invisible hand that guides so much human behavior. Read More »
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We need to make it harder to buy pills in bottles of 50 or 100 that can be easily dumped out and swallowed. We should not be selling big bottles of Tylenol and other drugs that are typically implicated in overdoses, like prescription painkillers and Valium-type drugs, called benzodiazepines. Pills should be packaged in blister packs of 16 or 25. Anyone who wanted 50 would have to buy numerous blister packages and sit down and push out the pills one by one. Turns out you really, really have to want to commit suicide to push out 50 pills. And most people are not that committed.
My good friend Massimo Young recently moved to Kenya, where he is seeing what happens when you mix a little American ingenuity into a thriving but chaotic developing economy. In what I hope is the first of many blog posts, Massimo reports on just what it takes to succeed in the banking industry in Kenya. (Massimo does not have a financial interest in any of the companies discussed in his post, although he wishes he did!)
M-PESA: The Story of the Most Successful Bank in Kenya
By Massimo Young
It’s not easy to do business in Kenya. Business people complain all the time that despite a wealth of opportunities, there are often major roadblocks to accomplishing much on the ground, especially at scale. In fact, Kenya ranks 121st out of 185 countries in the World Bank’s “Ease of Doing Business” survey.
On the other hand, there are some amazing examples in recent years of businesses that have managed to accomplish a lot very quickly. In particular, the wild success of mobile banking in Kenya has changed the way people use money here. Launched just 5 years ago, Kenya’s leading mobile money transfer service, M-PESA, now processes a total of about $5 billion in transactions per year, equivalent to an astounding 15% of the country’s GDP. Before it launched, only 14% of Kenyans participated in the formal banking sector. Today, about half the adult population uses M-PESA. Read More »
The environment has taken a back seat to the economy this election season. But timely new research looks at the intersection of politics, economics and the environment: the actual cost of environmental regulations.
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The economic costs of environmental regulations have been widely debated since the U.S. began to restrict pollution emissions more than four decades ago. Using detailed production data from nearly 1.2 million plant observations drawn from the 1972-1993 Annual Survey of Manufactures, we estimate the effects of air quality regulations on manufacturing plants’ total factor productivity (TFP) levels. We find that among surviving polluting plants, stricter air quality regulations are associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly large negative effects on productivity, though effects are also evident among particulates and sulfur dioxide emitters.
Our latest Freakonomics Radio on Marketplace podcast is called “Can Selling Beer Cut Down on Public Drunkenness?”
It features Oliver Luck, the athletic director at West Virginia University, whose Top 10-ranked football team opened the 2012 season by beating Marshall 69-34. Luck himself played quarterback at West Virginia from 1978 to 1981 and, after a four-year NFL career, got into sports administration. These days, he is best known as the father of Indianapolis Colts’ rookie quarterback Andrew Luck.
As the A.D. at West Virginia, here’s what Luck saw happening at home football games:
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“People drinking far too much at pre-game parties and tailgate parties before games. Sneaking alcohol into games. Leaving at halftime or any point during the game to go back out to the tailgate to drink even more and come back into the game. … They would usually drink hard liquor — ‘get their buzz back on’ and come back into the game for the third quarter. And the police again would know exactly at what point in the third quarter these ‘throw-up calls’ would start to come over the radio.”
Our latest Freakonomics Radio podcast is called “How Deep Is the Shadow Economy?” It addresses what we know — and don’t know — about the gazillions of dollars that never show up on anyone’s books.
The conversation ranges from the macro to the micro — that is, from worldwide estimates of the size of the shadow economy to the actual off-the-books transactions (from drug dealing to freelance hair-cutting) that make those dollars flow. Read More »
Math professor R. Andrew Hicks has come up with an amazing new rear-view mirror for the driver’s side of the car that eliminates blind spots. The secret is that standard mirrors are flat, but this one has subtle curves that greatly widens the field of view, but without being distorting. If you look at the photo accompanying the link above, it is amazing how much better the new mirror seems to be.
Alas, you won’t see Hicks’s mirror on many cars any time soon. U.S. regulations require that driver’s side mirrors be flat, and this mirror is not flat. So if you want one, you will have to buy it and install it on the car yourself. Read More »
My colleague Glen Weyl and Eric Posner at the University of Chicago Law School, argue in a recent white paper, that new financial products should be subject to regulatory approval analogous to that for new drugs by the Food and Drug Administration. Here is the abstract:
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The financial crisis of 2008 was caused in part by speculative investment in sophisticated derivatives. In enacting the Dodd-Frank Act, Congress sought to address the problem of speculative investment, but merely transferred that authority to various agencies, which have not yet found a solution. Most discussions center on enhanced disclosure and the use of exchanges and clearinghouses. However, we argue that disclosure rules do not address the real problem, which is that financial firms invest enormous resources to develop financial products that facilitate gambling and regulatory arbitrage, both of which are socially wasteful activities.