Lawrence Lessig argues that lobbying isn’t the “pay money to x” and “get outcome y” that most people think it is. Highlights include:

• If lobbyists really worked the way we thought they did then you would expect that they would spend their time trying to ‘bribe’ those who disagree with them. But this isn’t the case. Lobbyists actually concentrate on those who already agree with them – people who are already likely to vote in their favour.
• In fact despite extensive statistical analysis, it has been difficult to find evidence for systematic vote buying.
• In a sophisticated, bureaucratically complicated legislative arena, lobbyists are actually professionals who are intelligent experts that understand the complexities of the situation. They don’t tell legislators what to do, rather, they help legislators achieve what they already want to achieve.
• But this does not mean that the practice is ethical. While lobbyists aren’t buying votes they are helping to set the agenda. Only certain issues receive the guidance provided by lobbyists, causing other issues to be left by the way-side.

To read why the problem is one of human relationships, why embedded in the lobbying world is a gift economy rather than a cash economy, how Jack Abramoff fits into all of this, and why today’s lobbyists look like boy-scouts compared to the lobbyists of old, click here.

Source: The New York Review of Books

Via: The Atlantic

The target of the newest crime wave sweeping the United States? Tide Laundry Detergent. One man stole $25,000 worth of it. The Prince George county police department refers to it as “liquid gold.” As it turns out the product’s characteristics make it ideal as a currency for the drug trade:

• Its retail price is relatively high and moderately steady.
• There are no serial numbers, making it impossible to track.
• It’s widely available and easier to steal than other products that are often locked down.
• Its Day-Glo orange packaging makes it instantly recognizable.

To read about the drug-bust that turned up more Tide than cocaine, what CVS is doing about it, what the parent company Procter & Gamble thinks about it, and how individuals go about stealing it, click here.

Source: The Daily

Via: Marginal Revolution, BoingBoing

Slate is continuing its look at the implications of a world without cash. This time Katy Waldman asked what would happen to prostitutes, drug dealers, and black market operators in a world where they can no longer deal in cash. To say nothing of the millions of restaurants and laundromats that avoid paying taxes. Some considerations include:

• Blackmarket operators would probably just use alternate forms of currency such as precious metals or gems, keeping the amount of black-market activity around the same.
• Electronic payments might actually make it easier to evade taxes. In a cash-only society you can only withdraw so much money without raising any alarms. Furthermore the $10 and $20 bills you could withdraw this way would weigh a lot making it difficult to carry too much and therefore be more easily detected. In a cash-less society you can move millions of dollars around the world at the click of a button.
• However it is also easier to police cyber-money, decreasing the amount of tax evasion.

To read what Waldman believes would happen to money-laundering overall in light of these differing effects, the amount of cash in the United States, and why Amazon gift cards might be the medium of exchange for drug dealers in the future click here.

Source: Slate

Felix Salmon ponders the Taco-Truck Mystery: Why is it that food that comes from food trucks is better tasting than food from restaurants? He suggests several possibilities:

• Perhaps the smaller space is a blessing in disguise – food-truck owners can focus on one food and one food only.
• There is less administrative work to take care of such as payroll, human resources, customer experience etc.
• You get your food literally seconds after it’s made from a food truck and that substantially increases its flavour.

To read about why first-generation immigrants might play a role and what twitter can tell us about the problem, click here.

Source: Reuters

Via: Marginal Revolution

In what is one of the best examples of clear, concise, and well organized writing in recent memory, Sara Robinson’s argument for why employers, employees, and society as a whole would benefit from a return to a 40-hour workweek is fascinating. In the article she seeks to answer: “How did we get to the 40-hour week in the first place? How did we lose it? And are there compelling bottom-line business reasons that we should bring it back?” The extensive answer includes:

• It wasn’t unions that drove the push for the 40-hour work week – it was, in fact, employers. Research showed that it was almost impossible to get more than 40 hours of productive work from an employee, so employing them any longer than that actually ended up cutting profits.
• Moreover accidents that shut-down production lines and opened businesses up to lawsuits were also more likely to occur because of overworked employees.
• After World War 2 though, as the knowledge economy grew, people assumed that the 40-hour productivity phenomena was limited to industrial workers and did not apply to white-collar employees who were becoming more common.
• The problem was compounded by the rise of Silicon Valley and a generation of workers who saw their work as their life. The “geek” stereotype that includes bad personal hygiene and health as well as limited understanding of relationships is based in part on what the first generation of Silicon Valley employees were actually like.
• The meteoric rise of Valley companies convinced other businesses to try to create the same passion. Workplaces suddenly had gyms, restaurants, supermarkets and child-care services. The implication was that your office could take the place of your home.
• However not only are knowledge-sector employees also limited in the amount of hours over which they are productive – for them the limit is lower than for industrial workers. Evidence suggests that individuals have only about six hours of productive mental work in contrast to the eight hours of manual labour that’s within them.

To read the rest of what is, again, an extremely well-written 7-page article, how the original Macintosh team could have had the Mac out a year sooner, the specific circumstances (and associated costs) in which it might be possible to get more than 40 hours of work from an employee, and why the motto of Britain’s 19^th century short-work movement might have had it right all along, click here.

Source: AlterNet

Via: Salon

Garth Zietsman did a study that examined the effects of both watching porn and supporting the legality of porn. Findings include:

• Greater availability of pornography does not increase rates of sexual violence on women. It may even decrease it through a substitution effect. Moreover men who work in the porn industry are less likely to be on sex offender registries.
• Pornography also does not affect attitudes towards women or feminism.
• Men who support the legality of porn are less likely to get married. This effect is not seen in women. In terms of actual porn watchers both men and women who watch porn are less likely to get married.
• Both men and women who support the legality of porn are likely to have fewer children in marriage. However men who watch porn are likely to have more children.
• Men who support the legality of porn and also watch it are less likely to have children born out of wedlock.
• Supporting the legality of porn and watching porn are related to lower voting rates in elections.
• Those who are pro-porn are more likely to be unhappy with their family or their marriage (especially men).
• They are also more likely to have a sexual affair.

To read the rest of what is an extensive and far-reaching study, that looks at the “smart-vote” and comes to a clear conclusion that you may or may not support click here.

Source: FreakoStats

Via: Marginal Revolution

In The Wall Street Journal Allan H. Meltzer argues that domestic policy can do very little about income inequality. The crux of his argument is that the share of income for the top 1% has increased across all countries despite them having widely divergent domestic income redistribution policies. The real reasons for income inequality must then be explained by global phenomena. He argues that these are:

• The millions of Chinese and Indian workers added to the global marketplace meant that mid/low income people faced increasing competition, thus causing wages to drop.
  
• The rich, on the other hand, didn’t have to deal with the same competitive pressure from developing countries, especially since most of them have either unique or difficult to obtain skills. These include not only bankers but also rock-stars, athletes, and doctors.
  
• Sweden experienced an income decline within the top 1%; however this was once again due to global economic pressures. Domestic policy had very little to do with this effect.
  
• In general income redistribution programs have only made marginal indents to the problem of income inequality.
  

To read what this means for domestic policy, our strange relationship with Steve Jobs, and what JFK had to say about all this click here. You can find a critique of Meltzer’s argument over here.

Source: The Wall Street Journal

Via: Why Nations Fail

How does ethnic diversity and multi-culturalism affect business? On the one hand the wider range of perspectives might lead to more innovation, and immigrants might have ties to their home markets that could let the business expand abroad. On the other hand diversity could mean barriers to communication and discrimination. Max Nathan and Neil Lee did a study that examined the net impact of diversity by looking at business outcomes in London. Their findings include:

• Management diversity is positively linked to innovation.
• However this innovation does not necessarily lead to a successful commercialization of the innovative ideas.
• Firms with more diverse management structures are better-able to integrate into global markets.
• Migrants are also more likely to be entrepreneurial.

To read why the researchers conclude that the lack of commercialization of innovation might be due to discrimination, what governments should do to capitalize on these benefits, and why London exemplifies the cosmopolitan world city, click here.

Source: Spatial Economics

Via: The Economist

We here at Centives are big fans of The Hunger Games, therefore we were quite excited to see that Matthew Yglesais had posted an article that looked at the economics of The Hunger Games. In particular he asked why it was that Panem, a country with such advanced technology as hovercrafts, genetic engineering and sophisticated weaponry could have a population that was so poor. His answer included:

• In the contemporary world countries which have ‘extractive institutions’ – institutions that exist only to take money away from the local populations and concentrate it among the elite – are generally under-developed, since saving and investment is discouraged. Today countries in Africa and Latin-America are dealing with the legacy of extractive institutions imposed by colonizers.
• Panem is a country built upon extractive institutions. There is a single purchaser of all goods (the government) and it dictates the meager prices that are offered for the goods. There is no competition. For example the coal mined by the citizens of district 12 can only be sold to The Capitol.
• Other steps taken to discourage competition and thus economic growth for the masses include restrictions on the freedom of mobility and limitations on the opportunity posed by the natural resources of the surrounding area.
• As African and Latin American countries are realizing, the biggest problem with such institutions is that once they’re established they’re extremely difficult to eliminate.

To read more about how this relates to District 7, 9, and 10, why Collins was wise to stay away from describing the lifestyle in the Capitol, and why Panem doesn’t even need real democratic equality to quickly grow and improve standards of living, click here.

Source: Slate

Via: Will Dearden