Friday, April 27, 2012

Living Outside of the Asylum

If 100% Pure New Zealand has run its course, I'd like to suggest an alternative.
New Zealand: The Outside of the Asylum
We constantly rank at or near the top of international measures of transparency, lack of corruption, economic freedom, and personal freedoms. Every day my Twitter feed brings me new stories of how absurd the rest of the world is getting.* The US Department of Labor wants to ban farm kids from working on farms. The TSA destroys personal liberty and dignity in a vast theatrical demonstration that does less to stop terrorists than it does to enable TSA agents to mule drugs across the country. The American CFTC bans event derivatives as serving no useful purpose.

Meanwhile, in New Zealand, our Ministry of Labour worries about safety standards on quad bikes but nobody would dream of banning kids from working on their parents' farms. Our airports encourage travel, only imposing idiotic security measures when they're required as condition of flying back into the Asylum. And, iPredict provides an events derivatives market that brings us ever-closer to Arrow-Debreu worlds.**

We've been backsliding a bit since 2005 or so, and especially in Christchurch this past year, but we still retain a comparative advantage in not being utterly insane. A sane regulatory environment is what has Peter Thiel investing here. We're sanely considering disallowing software patents. Our anti-piracy legislation sanely demands that rights-holders compensate ISPs for some costs in delivering infringement notices. We sanely spend very little on national defence, knowing there's pretty much nothing we could do to deter somebody who could put up sufficient blue-water navy to get here.

Instead of having activists worried about the threat to our "100% Pure" image if a place that already markets itself on mining tourism opened another mine, we could have worries about our 100% Sane image whenever we deviated from sane policy.***

The customs inspection queue at every airport could have big signs welcoming new entrants: "Welcome to the Outside of the Asylum." It would be great.

And in the international departure lounges, we could have big signs warning people that, in the Asylum, whether their pastries will attract 20% VAT will depend on whether the pastries are supplied hot or supplied cold with ready access to a microwave. Or that, inside the Asylum, wardens may relieve you of your cash on flimsy pretext if you're stopped in a forfeiture corridor. Or that, inside the Asylum, all of your web traffic may be monitored by the wardens for the inmates' protection.

If you're reading this from inside of the Asylum, you have my sympathies. I'll head out to the beach with the kids this weekend to put up some decorations to make the Asylum a bit prettier.




* Recall Wonko the Sane:
One day, after coming across a set of detailed instructions on a set of toothpicks, John Watson, distressed and fearing for the world's sanity, built The Asylum to put it in and help it get better.

The Asylum can be described as a four-walled house turned inside out.

To elaborate: the ceiling turns outwards, the furniture and carpet rests on the coast, the door one would normally believe to lead into a house leads outwards to a lawn with benches and walking paths, an area John calls "Outside the Asylum", in which is mounted the instructions for the toothpicks to discourage going back in it.
** Just this morning, New Zealand's top political blogger started tweeting claims that both the opposition Labour leader's chief press secretary and his advisor quit. As the leader's performance hasn't been awe-inspiring, this could be early warning of a coup to come. Less than an hour later iPredict launched a contract on it and asked him to put his money where his mouth is. He has, and invites those who disagree to give him some of their money. As of 1:40 Friday afternoon, an hour after contract launch, we've had 121 trades and a price of $0.6755. I've no money in that market as I have zero information on which to trade. But I love that here, outside of the Asylum, it is dead simple for a legal market to open real money contracts demanding that pundits put their money where their mouths are. Just imagine how much more sane American talking-heads shows would be if there were real money markets where these guys could be held to account. I chalk it up to a lack of demand for sanity inside the Asylum.

*** Sane policy is neither right nor left, it just requires a commitment to acknowledging tradeoffs and setting policy consistent with desired ends. More and less redistributive systems are both eminently sane in pursuit of different goals. But there are more and less sane ways of getting there. Helping poor people by giving them money is sane. Helping poor people by giving home heating rebates to the elderly is insane, as is helping poor people by cutting the GST on fresh fruit. Do we really want to risk our 100% Sane image?

21 comments:

  1. Could you please define sanity as you use it here?

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    1. See the *** at the end. Sane policies are ones that are consistent with their stated ends and are the least-cost way of achieving that end. NZ has excised most of its stupid. We don't have crazy supply management systems. We have a clean GST. Policy is generally pragmatic. There's a big set of policies that fit the minimal "sane" criteria; there's a far bigger set of potential policies that don't.

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    2. Ah, I see. So in this context sane could be replaced with effective or efficient?

      ef·fec·tive
      adjective /iˈfektiv/ 

      Successful in producing a desired or intended result.

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    3. Sane, for economists, usually refers to means-ends. We can disagree about ends. But we get irritated about bad ways of achieving ends. They're sometimes good ways of achieving unstated ends (like rewarding rent-seekers), sometimes playing to popular nuttiness, and sometimes both at the same time.

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    4. I guess as a marketing slogan "New Zealand: 100% Effective" is not all that appealing. :)

      Seriously though, it seems to me that you might be switching back and forth between the popular and the economist's definitions for sanity.

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    5. Those are tough words from someone whose blog won't let me increase the font size. Freedom starts at home, and also at your blog, dude.

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    6. Chrome, Firefox and Safari let me increase the font size in this blog. Perhaps you need to get a browser that gives you that freedom, dude.

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    7. Eric, I think that you are overstating the case for the outside of the asylum. I sometimes wonder if experiencing less insanity is a matter of scale. As a small country NZ can't afford the level of idiocy and complexity that can be paid for by inhabitants of the asylum. Nevertheless, we manage to go over the top in some issues; for example: ETS, GMOs, nuclear-free, etc.

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    8. @Anon: possibly

      @unknown: I use Blogger's standard settings but am happy to take suggestions of things easily done in Blogger that improve user experience. You want me to push what button?

      @Luis: I grade on a curve.

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  2. Eric:

    While I think you have some strong points, one question -- if our policy is so good compared to the rest of the world, why is per capita output lower than so many countries in Europe and North America that have worse policy? Our per capita GDP (PPP) is around 30k, similar to southern Europe, while northern European countries have output a third higher, and America's is about a half higher. How do we explain that?

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  3. I admire your patriotism Eric, but the insanity is pretty evenly distributed...

    "The cost of a packet of cigarettes in New Zealand could rise to as much as $100 dollars - around £50 - by 2020 amid moves to stamp out smoking.

    The Ministry of Health wants New Zealand to be smoke free by 2025 and the suggested increase gives the first hint of the drastic measures being discussed."

    http://news.sky.com/home/world-news/article/16214173

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    1. I don't like tobacco policy here and tend to think plain packaging won't achieve its stated goals. High tax rates probably the best way of driving legal consumption down, but I fear they'll wind up fostering a pretty strong black market. The "Smokefree by 2025" goal is nuts as its unachievable by any plausible implementable policies.

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  4. I'm rather pessimistic of the diplomatic benefits of calling every other country in the world an "asylum", particularly given Australia's history as a penal colony.

    Nor do I think "consistent with their stated ends and are the least-cost way of achieving that end" is a particularly good measure of sanity. What if the stated ends are authoritarian or even genocidal? Are you still remaining value-neutral?

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    1. Separate good/evil from sane/insane. Brevik was sane, but evil. It would be difficult to improve upon his method to achieve his goal, but his goal was evil.

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  5. Eric, I think I can hide some tobacco plant, uo there near Motueka, my friend farm, in the sun, sell up in plain packs way up north, our cover will be vineyards and big trees, also other subterfuge, generators for what you think, big drug profit Eric, , is this sane , come in here eric

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    1. I'd expect there's already some of that going on up Motueka way...

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  6. Sigh.

    Quit taunting me. I've felt this way ever since I returned to the States. I keep hoping to convice the wife that we need to move back permanently.

    (Say hi to Hickson for me!)

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    1. (Stephen here).
      Probably being a bit dense but can't work out who GSW is. :-)

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    2. You have an anonymous fan. Surely one of tens of thousands.

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    3. Grant Williams, from the 08-09 MBA batch...

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