voluntaryXchange

Quote 2 from "The Other Path"

I had some minimal experience with a deeply informal economy once - I was a busker in the tube in London. The degree of organization involved in making sure that people get spots, and that the people that are liked get the better spots is stunning - and in 1983 it was all done on spiral notebooks with pencils.

I didn't fathom the importance of this. In The Other Path, de Soto does:

Although exclusive use has to be won by remaining in the location, it is often limited by a system of shifts whereby each pitch may be used by different people in the course of the working day. It is not unusual, for instance, to see the pitch occupied by different people in the course of the working day. It is not unusual, for instance, to see the pitch occupied by the breakfast seller in the early morning hours who then, around 9 or 10 in the morning, makes way for the juice seller who, at midday, makes way for the lunch seller who, after four in the afternoon, is followed by the vendor of herbal remedies, who later gives way the vendor of Chinese food, who stays until the end of the day. These shifts enable a single barrow to operate like a large store, maximizing its commercial value. On their own the different vendors offer only a small range of goods and services. [pg 67]

Quote 1 from "The Other Path"

In The Other Path, de Soto spends a lot of time detailing how informals take over land in Peru. Basically, they invade. And ... it's rather like blitzkrieg ... the more overwhelming they are in speed and numbers, the better their chances.

After decades of doing this, by the 1980's it was so bad that the politicians were leading the invasions to stave off other government groups:

On July 15, 1984, seven thousand families invaded 640 hectares of land at Km. 18 on the Carretera central, by the Huaycan ravine. The invasion was planned, organized, and carried out by the Lima City Council itself. Most of the invaders were public employees or belonged to organizations which could hardly be suspected of being informal. [pg 52]

Don't believe me?

 

The delay in the procedures for adjudicating the land, ownership of which had to be transferred from the ministry of housing to the City Council, finally exasperated the municipal authorities and convinced them to give the go-ahead for the invasion. Mayor Alfonso Barrantes himself, frustrated by the interminable red tape, had raised the matter two months earlier with the then Minister of Housing Javier Velarde Aspillaga who, by his own admission, acknowledged that, given the impossibility of speeding up the administrative procedure, invading Huaycan was the only solution.

 The fact that a mayor and a minister, with all the political weight of their office, were unable to deal with the established procedures and had to resort to invasion made it clear that the legal system was incapable of providing housing to the people. However, unlike informals, public officials are unfamiliar with the extralegal system that governs invasions. [pg 52]

Book Review: The Other Path

I finally got around to reading The Other Path by Hernando de Soto.

This is the pathbreaking book from the mid-80s about how poor Peruvians - blocked out of the formal economy by regulations - responded by creating market institutions that were efficient and improved their lot.

I know ... I should've read this 20 years ago ... but it's been excerpted so many places there hardly seemed a point.

Anyway ... I'm glad I read it now rather than never. If the Nobel Peace Prize Committee didn't have its head up its *** they'd be out looking seriously at people like de Soto instead of Jimmy Carter, Kofi Annan, Yasser Arafat, and assorted tree planters, landmine avoiders, and plagiarists.

Ahem. If you're serious, read the whole book. If you're merely interested, start with Part 2.

Part 1 has its moments, but they are few and far between. It's goal is to spend 100 pages or so detailing the history of informal markets in Peru, and the responses of authorities. It is encyclopedic, but far more detailed for anyone other than a scholar. I do recommend skimming it, at the least: you have to remember that before de Soto, no one ever wrote this sort of thing down. We hear a lot of long-winded diatribes about how most westerners are not connected to the experience of the world's poor - well here is someone that just tells you their experiences instead of jumping on a soapbox.

The second part is much better. This is where the thesis that is commonplace today is set forth: that legal institutions are critical for growth and well-being, that in Peru (and other places) they have been hijacked by mercantilist forces straight out of the late Middle Ages, that the political labels of left and right aren't as accurate as mercantilist and libertarian, and that most bureaucrats and politicians fall in the controlling mercantilist camp.

I'll run several days of quotes from the book, so be sure to check back!

Happiness Quote

Self-help critic Steve Salerno offers up this advice his dad him as a child:

"Life isn't built around 'fun'. It's built around peace of mind."

History of Partying at Christmastime

Lots of details about late December celebrations through the ages - western but not necessarily Christian.

... Saturnalia and ran from Dec. 17 to Dec. 24. During that week, no work was done, and the time was spent in parties, games, gift giving and decorating the houses with evergreens. (Sound familiar?) It is a mark of how late Christmas came to the Christian calendar that it is not a moveable feast, but a fixed one, determined by the solar calendar established by Julius Caesar ...

... According to the Gospel of St. Luke, "shepherds were abiding in the field and keeping watch over their flocks by night." This would imply a date in the spring or summer when the flocks were up in the hills and needed to be guarded. In winter they were kept safely in corrals.

So Dec. 25 must have been chosen for other reasons. It is hard to escape the idea that by making Christmas fall immediately after the Saturnalia, the Pope invited converts to still enjoy the fun and games of the ancient holiday and just call it Christmas...

By the high Middle Ages, Christmas was a rowdy, bawdy time, often inside the church as well as outside it. In France, many parishes celebrated the Feast of the Ass, supposedly honoring the donkey that had brought Mary to Bethlehem. Donkeys were brought into the church and the mass ended with priests and parishioners alike making donkey noises...

Read the whole thing by John Steele Gordon - a fascinating historian for readers.

Light Blogging

Off to Disneyland for the first time since we had kids.

Back for 2 days, then off to NOLA for the AEA meetings.

I'm interviewing - as said in Monty Python and the Holy Grail - "and there was much rejoicing."

Interesting Global Warming Viewpoint

Since man-made carbon dioxide output doesn't really go anywhere, it probably makes sense to look at cumulative production.*

New Scientist's Environment Blog points out that measured this way, the U.K. is the biggest releaser of carbon dioxide per capita.

* Well, it can be sequestered - usually in the ocean - but then it is always a threat to be re-released.

Good Company

I'm a skeptic about the anthropogenic aspect of global warming and agnostic about the global warming part.*

The legacy media likes to crow about the consensus of almost all scientists who believe in anthropogenic global warming.

Their lack of exploration of who the skeptics are means that job has fallen to a U.S. senator that the legacy media long-ago labeled with the pejorative arch-conservative.

Anyway, the Imhofe report lists 400 scientists around the world who have been outed as global warming skeptics (summary here - the full report should be linked there by the time you read this).

FWIW: there were just 52 scientists on the UN IPCC team that developed the report now labeled as a consensus.

* Having casually studied global warming data since 1989, it's nothing short of stunning how many "scientists" I've talked to about it who are (at best) weak on the necessary time series analysis, and whose exposure to appropriate scientific methods for non-experimental situations is non-existent.

Corrupted Recycle Bin - Or Just Confused?

Ran into a tough IT nut to crack in maintaining the home PC - a corrupted recycle bin.

At least that was the error message we were getting. The symptoms were that it looked full on the desktop but was empty when opened, and this if you deleted something new it just disappeared altogether (even though confirmation was required).

There's quite a lot on the internet to fix this problem - the problem was that about 15 different suggestions didn't actually solve the problem.

But, some fiddling did reveal the problem. It's an odd one, but worthy of a post since someone else is bound to run into the same thing.

Turns out, the user account on XP with the corrupted recycle bin was for a limited user. But, the problem items in the recycle bin had security permissions that gave full control only to an administrator. XP never generated an error message that there were files in the recycle bin that it couldn't deal with. Instead, we got the phantom message. So, the recycle bin wasn't so much corrupted as confused.

To fix this:
1) Log on as an administrator
2) Open Windows Explorer
3) Click through "Tools", then "Folder Options", then "View", and uncheck "Hide Protected Operating System Files". You will be warned not to - click through that too.
4) Navigate to the now revealed c:\Recycler folder. Inside are individual Recycle Bin folders for different drives and users. At this point, you're going to have to have some way to know which is which once you go poking around inside them.
5) Highlight the problem files (perhaps all of them). Right click on them, and select "Properties". Then click the security tab, and make sure that the appropriate users have full control of those files.
6) Close up, and log on as the user with the problem. Empty the recycle bin normally.
7) Reboot.
unhide system files in Windows Explorer, navigate to the Recycler folder

Final GDP Grade

The final revision for U.S. real GDP growth in the 3rd quarter came in this morning at 4.9% - unchanged from the last revision.

That growth rate is in the 79th percentile, and since it is a final revision it is time to add pluses and minuses to the grade.

Using my standard scale this grades out 3rd quarter growth as a B+.

Using the scale that college students are used to being graded on - where half the scores are A's - the third quarter would have to rank as an A+.

Economists know that - for better or worse - this is why most folks are bitching a whole lot less about the Bush administration.