In a speech Andrew Leigh reviewed the history of Australia’s economic performance and what it meant for the future of the country. In particular he argued that while Australia had pursued effective policies, it had also been extremely lucky, and this luck may not be replicated in the future. The six things that made Australia lucky include:

• Plentiful land. Europe had little land and lots of people. Australia had lots of land and few people. This meant that wages for Australians were high and this created economic opportunities.
• Gold. After gold was discovered in 1851, national income quadrupled in a decade.
• Inventions. The first half of the twentieth century saw a remarkable amount of innovation. Why is this lucky? Because it might not be replicated again. You may think that innovation has continued into this century but consider, would you rather give up indoor plumbing and penicillin or your iPad?
• Immigrants. As a proportion of its overall population Australia had a stunning amount of immigrants.
• Rising commodity prices in the 21^st century. The prices for minerals that Australia mines have tripled in the past decade as India and China continue to develop.

The speech is informative and entertaining. Leigh considers his own party’s mistakes as well as the mistakes that other parties are currently making. All the while he illustrates his points with fascinating examples. It’s by far the best speech that Centives has covered so head on over here to get the rest of it.

Source: Andrew Leigh

Via: Marginal Revolution

The BBC took a look at the history of gambling. Highlights include:

• Gambling has been around in some form or another for over 5,000 years. The Egyptians are thought to have been avid gamblers.
• In Rome it became so popular that authorities tried to limit it to Sundays.
• The Roman Emperor Claudius was obsessed and wrote a book called “How to win at dice.”
• In 1558 the odds against the Spanish Armada sailing to England are said to have been 5:1 – although this may have been a ruse by the Spanish.
• Up until the Rennaissance nobody looked at the mathematics of the game – perhaps because before then people believed that chance was driven by an external force.
• The 1700s were the time of eccentric gamblers. One man won a fair amount of money by riding backwards on a horse from London to York.
• Gambling crept into sports and led to match-fixing. In one rather hilarious cricket match both teams were desperately trying to lose.

To read many more details including a perceptive gambler from the 1600s who was smart enough to look into his odds, why it’s not surprising that the Duckworth-Lewis method was invented by statisticians, the golden age of betting on gut feelings, the rise of spot-fixing, the home of cricket, the type of gambling that gives you the best odds at winning, how cricket became a gentlemen’s game, and what gamblers and statisticians have in common click here.

Source: BBC

Leon Neyfakh reported on the latest research on “genoeconomics.” He writes:

• Confidence and a risk taking attitude – qualities seen as important for entrepreneurs – are at least in part, determined by genes.
• This might lead to the creation of an entirely new field in economics that attempts to explain why we act the way we do based upon our genes.
• This could lead to a frightening future where banks require a saliva test to see if you’re reckless before giving you a loan.
• On the other hand it has positive applications. Parents who find out that their children are predisposed to irresponsibility might take extra care to teach them important financial skills.
• Or policy makers could use aggregate data about the populace to understand what polices would be most effective at guiding and shaping behaviour.

To read many more details about the field, including its history, its current status, why it briefly flickered into existence in the 1970s, why it’s seeing a resurgence, why there’s no ‘violence’ gene and what some other potential applications of this technology would be, click here.

Source: Boston Globe

Via: Marginal Revolution

Cindy Chang did an extensive analysis of Louisiana – the prison capital of the entire world. Highlights include:

• The percentage of its population that Louisiana imprisons is five times as great as Iran, and 13 times as great as China’s. In fact no other country in the world has an incarceration rate as high as Louisiana’s.
• Part of the reason for this is for-profit prisons that are worth $182 million. These prisons are mostly run by rural sheriffs – the very people who help send people to jail. The more people in jail, the more money they make.
• They also lobby to ensure that no legislation gets passed that could reduce the number of inmates.
• Each inmate is worth $24.39 a day.
• The for-profit run prisons are for minor offenders while state-run prisons are for more serious ones. Yet the facilities at state-run prisons are much better and help inmates get an education. In contrast at for-profit prisons the inmates mostly just laze about. This means that those with the best chance of being reintegrated into society receive the least attention.
• Louisiana spends over $600 million a year to ‘care’ for 40,000 inmates. This money could instead be used to invest in programs that would reduce crime and thus the number of inmates.

To read many more details including some anecdotes from both inmates and sheriffs, the for-profit companies that run the prisons, the role that race plays, how the current system came to be, why the system has come full circle since the 1800s, the city where it has become a rite of passage to spend time behind bars, and what the politicians have to say about it, click here.

Source: The Times-Picayune

Via: Freakonomics

Could there be a gold rush in Haiti? Martha Mendoza reported on some promising developments:

• The shifting tectonic plates that were responsible for the devastating 2010 earthquake in Haiti have, quite literally, a silver lining: they cause deep cracks where veins of gold, silver and copper can be found.
• The precious metals underneath Haiti are estimated to be worth $20 billion.
• Haiti’s annual government budget is $1 billion, the majority coming from foreign assistance. The economy received another $2 billion from Haitians working abroad.
• The last time gold was gathered in Haiti was the 1500s. Since then corruption and instability have kept investors away.
• However interest is now aroused. Because of the way that mining rights were sold, Haitians might get $1 out of every $2 profits – in contrast to the $1:$3 ratio seen in most other mining countries.

To read many more details including the connection with Christopher Columbus, neighboring Dominican Republic’s experience with buried metals, the cholera handshake, how much various companies have invested in exploration, the role that corruption may play, and the dangers of mining click here.

Source: Yahoo News

Via: Marginal Revolution

The rapid downfall of Palm showed just how ruthless the battle between Microsoft’s, Google’s, and Apple’s ecosystems has become, as RIM is currently finding out. But what happened? How did the company meet its demise so quickly? After extensive research, and numerous interviews Chris Ziegler pieced together the story of the final years of Palm. It’s long, detailed, and well-written. If you’re interested in the mobile wars we encourage you to read it here. But some highlights include:

• In CES 2009 Palm looked set to enter the market and transform the smartphone wars. 31 months later it became a faceless subsidiary of a faltering company without a clear future ahead of it.
• The problem starts with the success of Palm’s own mobile operating system, which dominated most of the 90s. As with any established software ecosystem it was difficult to break from the past and create a modern software platform that is caught up with the times.
• Palm finally made a serious attempt to develop a new operating system in 2007 – after the iPhone had been released – but before it met with its genre defining success.
• However by 2008 it was clear that the new software being developed was junk and too difficult to use.
• Two executives had an innovative idea to develop an entirely separate operating system based on existing technologies created by other companies.
• However there was internal fighting between the two visions for the future of Palm.
• At the end of the day the new idea was successful and was debuted at CES 2009 with extremely positive critical reception. Behind the scenes though the company was in crisis. It had promised to deliver the phones by mid-2009, but Palm essentially had to start all over again with its software development.
• When the phones were released, a small carrier, bad advertising, and a bug-ridden OS ensured that sales disappointed.
• Palm realized it needed a buyer and an investor. HP stepped up to the plate and bought it for $1.2 billion. However internal strife at HP meant that the company soon lost interest in its acquisition.
• Meg Whitman the current CEO of HP claims to have high hopes for it, but there are reasons to believe that she will drop it after July 1^st. All of the senior members of the original Palm team have left anyway.

Again if this is your kind of thing you have no idea just the kind of details you’re missing. Read about how Steve Jobs was so afraid of Palm’s initiative that he tried to strike an illegal deal, or how Palm was betrayed repeatedly by Verizon, some choice quotes, why people started erecting curtains around their desks, the role that bake-offs played, how Palm was like a startup, why Meg Whitman was honest, the thousand dollar dinner that could easily be justified, and a comprehensive video library in addition to much more over here.

Source: The Verge

Jane Wells reported on some fascinating statistics about those youths who are just joining the labour market:

• 3% of recent college graduates say that their parents sat with them during interviews with employers.
• Boys are more likely than girls to ask for help from parents in finding a job.
• 12% of them say that they wouldn’t work somewhere that didn’t let them check Facebook or Twitter.
• 5% said that they wouldn’t take a job where they weren’t allowed to shop online or check sports scores.

To read many more interesting statistics, including how many need a workplace that allows personal phone calls, what they expect in terms of health benefits and job security, what percentage had their parents drive them to job interviews, how many have their parents cover some or all of their living expenses, and the 58% that seem to have more realistic expectations, click here.

Source: USA Today

Via: Marginal Revolution

Rohin Dhar took a look at the market for used TVs. What he found is likely to surprise you:

• A lot of people try to sell their used TVs for more than what the same TV would cost brand new.
• Televisions from Sony seem particularly vulnerable to this trend.
• A lot of people price their used televisions below market price, of course, but overall in the market there is only a 14% discount to buying a used television. In contrast used headphones and phones sell for more than a 30% discount.
• One explanation for this is that people don’t realize how quickly their assets depreciate. In one ad a seller offered to sell a $1,500 television that they bought 9 months ago, for just $1,000. This 33% discount sounds impressive until you realize that the retail price of TVs fell faster than that.
• Another problem is inaccurate product identification. A TV might actually be called something like LG-47LK520 but it will be advertised as the more ambiguous “LG 47 inch LCD TV.” This makes the market less liquid and drives up prices.

To read many more details, and to see some really well designed and fascinating graphs, to find out how this problem can be fixed, what a solution to the problem would look like, to find out what percentage of televisions are correctly identified, which used models sell for more than their sale price, and why buying a used TV is like shopping in a foreign market where you don’t speak the language, click here.

Source: priceonomics

Via: Freakonomics

There is a widespread perception in the west that the Chinese government operates through a meritocratic system that promotes those with strong credentials. This is a myth, writes Minxin Pei, and it is time to bury it. Highlights include:

• 60 of the 250 members of an elite group of the Communist party claim to have earned PhDs.
• Yet the majority received them through part time programs in the party’s training schools after they had become government officials.
• One individual received his PhD after just 21 months. These degrees are not credible.
• Another way that China is thought to be a meritocracy is that it promotes those who have delivered high economic growth.
• Yet these numbers are very obviously fabricated by officials.
• Or they grow GDP by borrowing large amounts from banks and by selling land. This burdens subsequent local governments with high debt and wasted investments.
• Overall the governance structure of China is more corrupt than is commonly perceived.

To read about how a Master’s degree doesn’t cut it in China anymore, how Bo Xilai personifies the Chinese “meritocracy”, why even fake credentials aren’t good enough, how guanxi is now the only way to secure power, and the average length that a local official will serve before they are promoted click here.

Source: Project Syndicate

Via: Marginal Revolution