Archive for July 7th, 2015

Who should own the Jurassic World? Private or Govt?

July 7, 2015

It was privately owned and as in most Jurassic series, the whole thing got messed up. So did the private sector guys become too greedy and make profits just at any cost? Should it have instead been owned by govt which would have balanced profits and safety.

Mark Tovey says one should keep govt away from all such things. Being from Mises institute he would keep govt from everything actually:

In the fourth and latest installment of the Jurassic Park franchise, a theme park containing cloned dinosaurs plays host to horrifying scenes as visitors are preyed upon by reptilian attractions that have eluded the confines of their cages.

The chaos begins after the introduction of a new, ahistorical dinosaur, the Indominus Rex, a chimera cooked up by the park’s scientists. This monster, the film makes clear, is the product of capitalism run amok: simple de-extinction no longer impresses the park’s guests; to keep drawing in paying visitors the dinosaurs must keep getting bigger and meaner — a trend which quickly proves unsustainable.

If we in the real world ever become capable of reincarnating dinosaurs, should we leave the technology in government hands for fear that the profit-driven would, just as in Jurassic World, create overly hazardous attractions?

Private guys will do the marginal analysis. He says two things have to be balanced – wow factor vs safety and safety vs cost. Whereas govt will provide these services via taxation:

Governments, on the other hand, don’t worry about profit — they get their revenue not by providing goods and services, but via taxation. And this is why, the argument goes, they should provide dinosaur-amusement-park services: they would not ratchet up risk for profit’s sake; they could run a thoroughly stolid park and never go out of business.

But, as we have already seen, the balance between wow-factor and safety struck by private dinosaur parks would be the one that pleases the maximum number of people. Therefore, if the government were to outlaw the private ones in favor of its own, less-impressive parks, it would override the peoples’ demonstrated preference in the process.

To be sure, no one wants to be eaten by a dinosaur, but that does not mean that no one wants to run the risk thereof. Many parallels exist in our daily lives, but to choose just one: nobody wishes to die in an airplane crash; and yet, people constantly get on airplanes — they accept the risk as a cost worth bearing. So, too, would some people accept the risk of being eaten if it came part and parcel with especially cool dinosaur parks. Unless we also accept bans on flying, driving, skydiving, swimming, eating fast food, etc., we should not in principle accept interference with individual choices regarding dinosaur-viewing.

On the issue of security: should no expense be spared? Impervious to profit and loss, the government dinosaur park could continue hoovering up security resources even after the marginal value no longer justified the price; the result would, of course, be a slightly safer park. However, only someone with a very myopic view could conclude this to be unambiguously good, for in the process of armoring their reptile attraction the government would unwittingly deprive other, more urgent causes in the economy of those same resources. As we have seen a private dinosaur park would instead equate marginal value with price, thereby unconsciously factoring conditions of supply and demand into its decision; it would take a more appropriate quantity of resources, given the relative importance of its end within the context of the wider economy.

Hmm.. Though the two things are not similar. People will react much more to being eaten by a dinosaur than die of a plane crash. Especially in a case where the accident can be avoided. And I don;t really see even some people being fine to havong eaten by a dinosaur. I mean even taking a risk..

So let markets function:

We have argued that the incentive to make profit would impel private dinosaur parks to balance safety, wow-factor, and cost in the optimal manner described above. So how, then, do we account for the Indominus Rex ofJurassic World? After all, this monstrosity was concocted by a profit-motivated, private dinosaur park; does this mean that it was in some way optimal?

It should be clear to anyone who watched the film that the Indominus Rex was a dinosaur too well endowed genetically: it presented a risk that was far greater than the majority of visitors would have tolerated ex ante. Therefore, Jurassic World’s operators made an “entrepreneurial error,” an attempt at profit-making gone awry. The balance between safety and wow-factor was ill-struck, and by no means profit-maximizing — Jurassic World will lose many, many prospective guests as a result of the Indominus Rex debacle.

Importantly, the Indominus Rex must not be held against the market per se; we should assess the market not on the basis of individual case studies but rather by the equilibria it inspires. Non-optimal outcomes do occur on the market’s watch, but in spite of (and not because of) its carrot-and-stick regime. The market institutionalizes optimal outcomes; without profit and loss, optimal outcomes could come about only by a fluke.

What do visitors think?

Six Memorable Months: The Best and Worst of Varoufakis

July 7, 2015

Nice Article on Greece’s Rock Star er Finance Minister.

There was the leather jacket, the motorbike and photo shoots of the man they said was like more a rock star than a finance minister. Then there were the lectures and proposals that left his European counterparts bemused and often annoyed.

As Greece’s Yanis Varoufakis leaves the job and bows out of ever-urgent talks to keep the country in the euro, the economic professor’s theories on how to fix Europe’s malaise return to the domain of academia, his blog and Twitter account.

From condemning Greece’s creditors to plans to enlist tourists to tackle tax evasion via angry exchanges at a summit in Latvia, here are some of the most memorable moments and comments from his time in office.

What you find amazing is how all this while it did not really look like a crisis. Compare Greece pictures to what you saw in previous crisis in emerging economies..

A tale of two cities – Chennai and Bangalore..

July 7, 2015

N. Natarajan feels Bangalore is more respectful towards senior citizens than Chennai. One would imagine opposite to be the true as Bangalore has this young and brashy image whereas Chennai is all about traditions and old time sake.

This is a personal experience of Mr Natarajan. Wonder if this is true for other people as well..

Today’s tech firms have yet to match their predecessors for transformative discoveries..

July 7, 2015

Nice article by Mark Mills.

He says there was a time when top tech firms apart from making money also led to some amazing discoveries. We don’t see the same in today’s top firms:


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