On Manufacturing Collectability

mdmakowskyLeave a comment

Topps lost the the licensing rights to Major League Baseball which, prior to it actually happening, is a thing that your typical baseball fan would not have previously acknowledged as even possible. Topps makes baseball cards. Not the only baseball cards, but for most of the history of baseball cards, Topps were the baseball cards. How can baseball cards exist without Topps?

Major League Baseball (MLB), of course, simply sold the licensing rights to someone else: Fanatics. Now, to be perfectly clear, I don’t care abou, any of the corporate entities involved here, imaging rights, or even baseball cards. What I am interested in is the concept of a purposely designed collectible–not something that becomes collectible, an item designed solely to exist as a collectible.

The markets for baseball cards rise and fall, and there was one definitive bubble in the early 90s. Like any commodity, prices are an emergent outcome of supply and demand, and while in the short run price movements are associated with fad and event driven demand, in the long run a collectible item’s price ascent begins and ends with supply. For an item to exist as a collectible with investment-grade price growth potential, it’s supply must be short-term limited and long-term fixed.

Fanatics just paid a lot of money for the MLB imaging rights, more than Topps was willing to bring to the table as a 70-year producer and stake holder. Part of Fanatics reasoning in committing so many resources to the rights is their ambition to produce non-fungible tokens (NFTS), which they will no doubt restrict the supply of to a profit maximizing level. NFTs, I suspect, offer Fanatics the opportunity to pursue a parallel product distribution that will allow them a new channel for price discrimination. Specifically, I expect the physical cards to be relatively inexpensive, sold at a price comparable to recent historical prices in an effort to serve price sensitive kids and hobbyists. The NFTs, on the other hand, I expect to be greatly limited in supply, a promise to hardcore collectors that the assets in question will offer the investment-grade inelasticity of supply that collectors covet in their aspiration to hold collectible items that hold value as art-adjacent consumption value while also being long term lottery tickets.

Fanatics believe the key to unlocking this is the image rights to Major League Baseball. Their cards and NFTs are the real ones, the official ones.

But that begs the question: why does the market care that they are officially sanctioned? The value of the image rights was to be able to use the names and logos of Major League Baseball without getting sued. The only way to profit off baseball cards previously was to produce at scale – you couldn’t capture the future collectible value nearly as well as the present consumption value. And there was no way to produce at scale without the imaging rights – there’s no good way to secretly print and sell a million baseball cards with images you lack the rights for. A person or company can’t sell a million black market bootleg cards without getting caught.

But someone could sell three.

A person can sell three cards without getting caught. A person could sell an unlicensed NFT without getting caught. And so can it’s next owner, and the one after that, ad infinitum. In the crypto world of NFTs these transactions, especially in the long term, are feasibly untraceable. If anyone can sell three baseball cards and associated NFTs, then anyone can make them as well.

Remember zines? Actually, maybe you don’t. In the before-times, aficionados of musical, artistic, or even just aesthetic subcultures would print their own magazines at home, pay for a 100 copies at Kinko’s, and then distribute them independently on their own through the mail or at small local bookstores. Not dissimilarly, many artists have for years produced “Art Cards, Editions and Originals” (ACEOs). Essentially baseball cards, but with small collectible works of art instead.

An independent artist that tried to produce baseball ACEOs and sell them on eBay would probably fly below the radar. But in the unlikely event that their card did become the card that the market chose as the most sought after, then yes, MLB and Fanatics would likely pursue legal action. The thing about pursuing a copyright so vigorously is, like many consumer goods for which distribution is illegal, restricted supply only increases their value. And an NFT transaction is considerably harder to trace than a physical or even traditional software good. It’s called “crypto” for a reason.

Sure, Fanatics will be the only company that can sell the “official” baseball card, the “real” one. But who’s to say that they’ll be selling the best one? In a world without enforceable image rights, the market is likely to care a lot less about the what’s official, and a lot more what’s the, always ephemeral and hard to anticipate, best. When you’re talking about a commodity where limiting supply is the key to unlocking value, NFTs and crypto technologies change the entire landscape, because copyright and image rights are only only enforceable to limit production at scale, which means any effort to do so just creates great incentive for small scale independent production.

This isn’t just relevant to baseball cards, either. This is relevant to anyone designing a product with the intention of it becoming collectible, where some portion of its value today is it’s predictable scarcity tomorrow. Twenty years ago downloadable music changed the entire market for music. Musicians at the highest levels of popularity found themselves returned to a world where the bulk of their income came from live performance, which had of course been the norm for musicians for most of human history prior to the vinyl record. It would be interesting if baseball cards, and other portable pieces of functional art (such as Magic or Pokémon cards) found themselves on a similar path, where large scale production of collectibles becomes outflanked by anonymous independent artists.

You’ll probably never own a $5.2 million Mickey Mantle 1952 rookie card. But you maybe you’ll paint Shohei Ohtani as a half-man, half-Gundam neo-noir warrior prince pitching a no-hitter the same night he hit three grand-slams. And maybe the market will say that the official photo cards of Ohtani are nice, but your image, and your NFT, are the one true image that captured the moment he became the greatest baseball player ever. Maybe the market will select your card.

(What I’m saying is…maybe the market will say your card is….topps. Yeah, sorry, I’ll see myself out).

Government Elimination of Perceived Vices

Joy BuchananLeave a comment

My post yesterday was about video games, prompted by the CCP legal restriction on video games for children. To enforce this rule, the government is making a list. Any adult playing these online video games will have to register with their real name. Is this a regulation of an addictive substance for minors, like we have for cigarettes, or is it progress toward managing the leisure time of males?

Before the Communists came to power (and before video games existed), previous Chinese government administrations had tried to ban another addictive form of recreation: smoking opium. The British famously did not help with this endeavor, but the British imports of opium ended years before the CCP crackdown. Where others had failed, the CCP practically eliminated opium from China in about 3 years. For my information, I’m drawing partly from a honors thesis on this topic.

The CCP started the relentless march toward eliminating opium in a clever way. They gathered information before announcing how ambitious the program would be. It started with making a list.

There had been previous attempts to send soldiers to destroy poppy fields (hello, 21st century?) but never in a coordinated enough way to stamp out supply. Police had raided opium dens in the cities, but nothing ever worked. Addicts were going to buy the stuff as long as it was being produced, and producers were going to grow the stuff as long as it was profitable. The CCP pulled off a coordinated attack on both producers and consumers in the entire country at the same time.

After a period of record-keeping, the CCP started forcefully addressing opium both in the rural areas where it was both produced and in the cities. There were different strategies for all the unique regions of China.

Those who did not cooperate knew that prison or immediate execution could result. The CCP, along with civilian volunteers, provided rehabilitation for some addicts who were willing to register themselves as offenders. It was acknowledged that kicking an opium addiction is hard. When possible, the government manipulated taxes and subsidies in such as way that farmers would choose to switch away from cultivating opium. The use of force was a reason for the success of the campaign, but people who were willing to cooperate often could find a way to transition away from their old habits.

The Communists did not just write laws and send soldiers. They held rallies that sound to me a lot like religious revival meetings. They galvanized millions of people to not just distain addictive drugs but to become volunteers for the cause. I would assume that many Chinese parents didn’t like opium in 1949 but were not yet so fervent as to become police informants. That changed in 1950. Everyone wants to have a moral cause. For some people today, it’s global warming. For millions in 1950’s China, it was eliminating opium distribution and addiction.

In one of my posts on Afghanistan I speculated that it is self-defeating for Americans to purchase illicit opium as consumers and also task our military with stamping out its production by force. This week when I read about the opium campaign, I found that a related message was used in 1950. The CCP presented opium abstinence as a way to defeat America in the Korean War.

I will be curious to watch developments concerning screen time and China. There is much to be determined. As Vice reported this week, ‘It’s unclear how the government will define “sissy pants”…’

Video Games: Emily Oster, Are the kids alright?

Joy Buchanan3 Comments

On Monday, China announced that kids under 18 will be limited to only 3 hours per week of online gaming. Those hours are scheduled for the evenings of Fri-Sun with a 9pm cut off. Go to bed, young man!

Last month I reviewed Emily Oster’s new book The Family Firm. In light of China’s ruling over how kids spend their free time, I’ll explain her view of video games.

Interestingly, she does not have a chapter called ‘Video Games: Do we need the CCP to intervene?’ She has one chapter near the end called Entertainment that includes video games and screen time. She writes at the beginning of the chapter that, “Screen time strikes fear in the heart of many a parent.” Most parents, at least among her audience, have their own smart phone and at least one TV in the house. It is such a relief, honestly, to get the kids to sit down and stop making trouble in the 3-D world. In What Women Want I wrote about a wealthy celebrity mom who has a nanny and a cook. She spends quality time with her kids, when she wants to. Most of us can’t afford a weekend nanny, but we might leave our kids with technology when we need a break. (I believe, with no data to back this up, that childhood mortality is down partly due to screens keeping kids off of cliff ledges and out of abandoned mines.)  Then, at the end of the day, we worry that they have spent too much time on screens.

Oster writes, “Screens change your brain, say the headlines. (Spoiler alert: Everything changes your brain.)” Parents like me have come to love Emily Oster’s ability to cut through the noise. Everything changes your brain. Video games are not a completely separate new form of human experience.

Helping a child’s brain develop is a big responsibility. We know that you can mess this up, most obviously in the cases of serious abuse. So, can you put on Sesame Street while you make dinner? Should you allow your son to play video games?  I’ll put the rest under Read More.

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Streaming Content: Scattering Vs Dumping

Zachary BartschLeave a comment

Like a good millennial, I don’t have cable. Instead I have Netflix, Amazon, Hulu, Disney+, YouTube, and a free trial of Apple TV. And before you say that I’m spending just as much as I would have spent on cable, just – no. First, I am not. Second, I have way more capability and discretion than I ever had with cable. Each of these streaming services now has their own studio(s) and competition is causing them to produce some content of exceptional quality. And, they differ in their decisions to scatter vs dump. Amazon and Apple TV scatter their new episodes on a weekly schedule. You can still watch the episodes whenever your heart desires once they’re released. But if you are up-to-date, then you must wait 7 days until new episodes are available. Netflix, on the other hand, dumps out a new series all at once. You can spend the afternoon (or morning, or night) watching an entire season of the newest content from a high-end studio.

If we take a look through the way-way-back machine, then we can observe must-see-TV on NBC in the 1990s. Networks followed the scattering model. Most people didn’t own a DVR and on demand wasn’t really a thing except for pay-per-view. VCR (video cassette recorders) were ubiquitous, but people enjoyed watching their shows as they were released rather than later watching a recording. The 90s and early 00s were a special time for NBC in particular: Friends, Seinfeld, Frasier, 3rd Rock from the Sun, and ER were all a part of the weekly line-up – with Will & Grace and Scrubs soon following the finale of Seinfeld.

New weekly episodes that were released during a literal ‘season’ of the year had been the model for as long as television signals had been broadcasted. Several of today’s streaming services still adhere to the 80-year-old practice.

Why?

I’ve got 3 reasons for why streaming services still scatter new releases. The first is the one I that have the least to say about: Buzz. It’s good marketing for a show to be released over a longer period of time. In a world of social media, the longer the time that a show is salient in your life, the greater the opportunity for you to share the show with your friends or for critics to acclaim (or pan, as the case may be). It’s a marketing tactic. If all of the episodes in a season were released all at once, then a show would be in-and-out of your life like a stray ice cube that goes rogue from the refrigerator ice-dispenser. You care for a bit. But soon, it’ll evaporate and never be a concern again. I’m not an expert in marketing. So I’ll just leave it at that.

The second reason is due to the time value of money. The sooner that we can enjoy revenues and the later that we can push costs, the better. It’s true for multiple reasons. Financially, every day sooner that you receive a dollar is an additional day during which you can earn a return by investing it elsewhere. For ease, let’s hold the schedule of costs constant and just worry about the revenues. If a streaming service releases episodes weekly, then episodes can start dropping before the season finale is even completed. There’s nothing that says that the whole season has to be ready by the time the first episode is released.  And, when episodes are released earlier, would-be viewers are sooner willing to sign-up and become paying customers. Releasing episodes weekly allows a studio to increase revenues before the whole product has finished production.

The 3rd and final reason for streaming services to release on a weekly schedule is due to the subscription structure of marginal revenue. Streaming services earn *no* additional revenue per episode viewed by customers. The marginal revenue earned from paying customers comes from subscriptions. That is, each month of a subscription is revenue for the streaming service provider – no matter how many episodes a subscriber watches. Therefore, if a season is released piecemeal, then it increases the number of weeks during which the streaming service receives revenues from the customer. Of course, people could just wait until all of the episodes are released and then subscribe for a single weekend of lethargic binging. But that can only happen when a viewer is comfortable with forsaking the frontier of new video content. That would mean that a viewer is out of fashion and out of the conversation that their friends and co-workers are having. And if this sounds like small potatoes, then keep in mind that such conversations are often about signaling belonging, comradery, and cultural sophistication. Many people are inclined to stay up-to-date on TV, the news, and sports and therefore have a greater willingness to pay.

There you have it. The 3 reasons for streaming by scattering over weeks rather than dumping all at once are 1) More persistent saliency among viewers and potential viewers, 2) Sooner rather than delayed revenues, and 3) More periods for which streaming service can charge their customers for new content.

I only have one explanation for why some streaming services do in fact dump an entire season at once. Netflix does it on the regular and Amazon started doing it in the past several years too. I suspect that they do it as a means of attracting a particular market segment: binge-watchers. There being two players who compete on this margin may make either provider appear less attractive for consumers who desire new, binge-worthy content. But, luckily for Netflix, streaming content providers aren’t in a perfectly competitive market. That content is an imperfect substitute means that it’s monopolistically competitive. And, for the moment, that means higher profits. The keen reader will recognize, however, that zero long run economic profits are also implied.

Institutions Getting Smarter on Covid

James BaileyLeave a comment

Two weeks ago I argued for 4 non-coercive anti-Covid policies I thought were under-rated. I haven’t generally been impressed by the institutional response to the pandemic, and so I wasn’t expecting the policies I mentioned to get traction any time soon. But some did!

I argued for:

  1. Full vaccine approval
  2. Emergency vaccine approval for children
  3. Ventilation
  4. Outpatient treatments that work

Since then, the big news is that the FDA fully approved the Pfizer vaccine. This seems to have increased the pace of new vaccinations.

I really wasn’t expecting the FDA to move that fast- they have generally learned to be slow because Congress has been much more likely to complain about them approving a bad drug than about them denying or slow-walking a good drug. But Congress itself seems to be changing in response to Covid, with 108 House members pushing the FDA for a timeline on approving vaccines for 5 to 11 year-olds.

I don’t know of a good way to gauge progress on ventilation overall, but I was pleased to see HEPA filters show up in the classrooms at Providence College:

Likewise, I don’t know if Fluvoxamine prescriptions are up in the weeks since a good sized study showed it reduced Covid hospitalizations 31%, but the popular press articles about it keep coming (don’t be deterred by “Vox”, the linked article is by Kelsey Piper and its excellent).

So some institutions seem to be getting smarter, and perhaps coincidentally, we seem to be at the peak of the Delta wave. According to Covidestim.org, Rt is now below 1 in 31 states, and falling in 45 states, including all of the Southern states hit hardest by Delta. Barring a new twist (another worse variant? Winter Delta wave in the North?), things just get better from here.

Who is the Wealthiest Generation?

Jeremy Horpedahl24 Comments

Have you seen this chart?

I have seen it many times. It comes from this Washington Post article, but it seems to go viral on Twitter about every 6 months or so.

The implication of the chart seems to confirm what many young people feel in their bones: Boomers had it much easier, and it’s getting harder and harder for later generations to catch up and build wealth. For many the graph… explains a lot, as one recent viral Tweet put it (in the weird world of social media, 5 short words and a recycled chart are all it takes for 20,000 retweets).

But wait. A few questions probably come to mind. For example, when Boomers were young they comprised a much larger share of the population. The original article makes an attempt to adjust for this, by calculating a few ratios towards the end of the article. However, there’s a much more straightforward way to adjust for this, which also nicely fits into a chart: put wealth in per capita terms!

If we do that, here’s the chart we get (also, of course, adjusted for inflation).

Data is for 1989-2021 from the Federal Reserve’s Distributional Financial Accounts, but only the first quarter is available right now for 2021. For 1989, it is the average of the third and fourth quarters. Population data comes from Census single-year of age estimates for various years. 2020 and 2021 population estimated using growth rate from 2010-2019.
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Suggestions for Comfortable and Effective Face Masks, e.g., Korean KF94’s

Scott Buchanan4 Comments

With Covid cases and deaths surging despite widespread vaccinations, face masks are back in. Back in the dark days of early-mid 2020, all commercial masks of any kind were allocated to medics/first responders. Back then, the only mask option for the rest of us was to cobble together something made of regular cloth. But studies I looked at show that the protective performance of those cloth masks, and even standard rectangular surgical masks, is really quite poor [1].

A cloth or surgical mask is definitely better than nothing, but is much inferior to other mask options which are now widely available. If you are going to bother with a mask at all, why not use a more effective one? A well-known effective mask is the KN-95. It has a kind of aggressive beak-like profile, as shown below, and typically uses elastic earloops. It gives good protection because it seals to the face (including around the nose, thanks to a malleable metal strip there) and is made of appropriate multi-layer filter materials. It is the standard protective respiratory mask in China, whereas in the U.S. the standard protective mask is an N95, with elastic straps that go around the whole head, not the ears.

Image Source: Amazon

I got a box of ten KF95’s back in June of 2020. I loved them – they were comfortable, worked OK with my glasses, and clearly sealed well to my face. However, I gave some of these away to family members, lost a few, and used the rest so many times so they started to lose their shapes.

There are lots of KN95’s for sale on Amazon, all made in China. Not all of these may be of the same quality. Some but not all of these brands were tested and approved by the FDA for emergency use; this article from March 2021 notes some of these brands that were for sale on Amazon at that time. It seems the approved Powecom masks are still for sale.

A problem with most of these Amazon KN95’s is that the earloops are painfully tight around the ears. I pored over the comments to try to select masks where at least some of the reviewers claimed the masks didn’t hurt. Alas, all my KF95’s are pretty much unbearable for a guy like me with maybe an oversized head. (I compared the length of their earloops with my original comfortable KF95, and indeed the earloops are clearly shorter on all the new ones).

In the course of reading dozens of reviews of KN95 masks, I saw several comments recommending KF94 masks instead. These are made in South Korea. They are standard personal protective equipment in that country, and as such must meet certain standards for fine particle capture. They look a little different than most masks, but seem less beak-like than the KN95s. They have a flattish rectangular middle part which is the main filter, with two triangular sections that cover the nose and the chin:

Image: Amazon

So I got a box of KF94’s, large size, and they are wonderfully comfortable for me. No stress on the ears, and sealing over the whole face. The shape of the mask keeps it from rubbing on your mouth. The “Large” size I got was actually a tiny bit looser than felt optimal, so I tied tiny knots in the lower part of the earloops to shorten them a bit. My wife uses a mask extender strap (e.g., HX AURIZE Mask Extender Strap on Amazon) around the back of her head to pull the KF94 earloops a little tighter, with the added benefit that if she wants to take the mask off temporarily, it can hang around her neck via the extender strap. In sum, the KF94s are a win, and I highly recommend them.

I see on Amazon that small (for e.g. 7-12 year old children) and medium KF94 masks are also available. One caveat on buying is to make sure that you are buying from an actual Korean seller, else you risk getting an inferior Chinese knockoff.

Back to my unusable KN95’s. I know that you can use mask extender straps like the HX Aurize straps linked above, or similar homemade hacks, to go behind your head and take some of the direct pressure off the back of the ears. However, I found using a behind-the-head strap still put pressure on part of my ears, and was just an added complication. I thought, surely there must be some way to make those darned earloops simply longer. What I did for one mask was to cut the earloops close to the bottom of the mask, and tie in a small rubber band into each loop, to make them effectively longer. (I put a dab of glue on the cut ends of the earloops, to keep them from unravelling). That worked out well, so I can recommend this as a “hack”. I also see on Amazon that you can order ¼” wide white elastic ear loop type band material, and I think I will buy some. I can then take more of my tight KN95 masks, cut the existing earloops, and tie in an extra inch or two of this elastic to get the length right for my head size.

ENDNOTE

[1] Some studies on masks:

(A) https://pubmed.ncbi.nlm.nih.gov/32845196/  Kim, et al. 2020. They had seven Covid-inflected patients cough five times with various masks on, and with petri dish sitting in front of them to catch germs. A surgical mask did no better than no mask at all (3 out of 7 patients’ petri dishes got infected in both cases), whereas zero out of 7 patients’ petri dishes got infected for a full N95 respirator made by 3M (not a Chinese KN95) or for a Korean-made KF94 mask.

(B) https://www.acpjournals.org/doi/10.7326/M20-6817   Bundgaard, et al., 2020. Done in Denmark around April-June 2020. From 6000 participants, all of whom initially tested Covid-negative, half were randomly selected to wear standard surgical-type masks while in public and half to not wear masks. (These are the usual rectangular masks that do not seal tightly to the face). Incidence of Covid infection after about a month was assessed for each group. For mask-wearers, the infection rate was about 1.8% versus 2.1% for the non-masked group. According to the standard statistical definitions, this was not enough to show that wearing that type of mask gave significant protection against becoming infected. That said, the difference between the 1.8% and the 2.1% is compatible with a 46% reduction to a 23% increase in infection on 95% confidence intervals. Depending on how you want to slice the numbers, it seems fair to say that there may have been “some” effect of the masks here. Also, it should be noted that this study did not test whether wearing a surgical mask would help keep an infected person from spreading the disease (I suspect the answer to that would be “yes, sort of”).

(C) https://pubmed.ncbi.nlm.nih.gov/33087517/ Ueki, et al., 2020. They used two full size human mannequin heads, and tied masks on their faces. The “Spreader” head was piped to have a stream of covid-aerosol-laden air coming out of its mouth. The “Receiver” head had a pipe that pulled air in through its mouth and through a gelatin membrane filter to collect the covid viruses that made it through the masks. Some of the results are shown below. I am not sure how to summarize them accurately in a few words. Note that these plots are on log scales, so small visual differences in the bars are actually big (see the numbers at the bottom of the bars). It seems clear that the cloth (cotton) and the surgical masks blocked some virus spreading compared to no masks, but a full N95 mask was much more effective (the N95 was tested with its edges naturally resting on the contours of the mannequin face, and also “fit” with the edges sealed against the face with adhesive tape). A KN95 or KF94 mask was not tested here.

POSTSCRIPT

After publishing this POST, I noted Jeremy Horpedahl’s post from last week, suggesting that the costs of wearing masks may be worth it even if they give a 10-15% decrease in viral incidence. Jeremy referenced an article by Bryan Caplan who questions the trade-offs with wearing masks having only marginal effectiveness vs. the discomfort and the dehumanization of having people’s faces obscured. Caplan in turn referenced a survey of research by Jeffrey Anderson (August, 2020) which summarized many real-life randomized controlled trials with populations wearing/not-wearing masks (presumably the surgical kind, not N95/KN95/KF94 better-sealing types) which found generally no benefit to wearing these types of  masks in reducing the incidence of virus transmission. (These studies were mainly pre-Covid, dealing with SARS and other viruses). This overall result is roughly consistent with the Danish study mentioned above, which did not find a significant difference for using those types of masks to protect from viral infections.

We need City-States

mdmakowskyLeave a comment

What happens when the world changes sufficiently that a subset of the institutions that laid the groundwork for the most successful nation of the last 200 years becomes becomes maladapted to their context? Well, thanks to a couple billion year of evolutionary biology, we know the possible outcomes. The classic evolutionary answer is that the species in question will either adapt, migrate, or die. Repurposed for the modern nation-state, the country in question will either:

  1. Adapt it institutions
  2. Change the context (i.e. whole nations can’t migrate)
  3. Steadily decline into some combination of irrelevance or chaos

Omar Wasow put together a nice thread, where each individual tweet stands wholly on it’s own as an acute observation, on the current state of the Senate as an elected institution:

So let’s think about our options here.

Decline into Irrelevance and Chaos

I mean, it’s a choice, but it’s not one I’m particularly excited about.

Adaptation

We could amend the constitution to change how the Senate is apportioned in some clever way that still maintains the mandated suffrage of every state. We could change/abolish the electoral college. I’ll be blunt: I don’t ever see a path forward for constitutional change that will entirely undermine the political power of the one of the major parties (good luck getting 2/3 of Senators to push through an Amendment that will undercut the careers of at least half of them). The resistance to it, at every level, will be extreme. The last time we tried to make an institutional change with that much impact on the balance of power, we had to fight a war to resolve it. There may be a path forward here, but not on a timescale that I’m interested in. I’m only interested in solutions that could be feasibly enacted in my lifetime.

Change the Circumstances

Unlike your typical seed-eating bird of the Galapagos Islands, we do have the means to change the map upon which the Senate is selected. In other words, more states. I don’t mean just granting statehood to Puerto Rico and DC (though it is mildly unconscionable that we haven’t done so already). And I don’t just mean (the very good and perfectly reasonable idea) of splitting California and Texas into 5 and 3 states. I mean a lot more states.

Let’s think about the underlying problem for a second. The Senate biasing representation towards a small minority of voters is a symptom of a larger phenomenon: the continued movement of Americans to dense urban areas. People keep moving to cities, and often from states without a major urban center, and into states with multiple large cities. The rural areas that they are emptying out from maintain their pool of slots for elected Senators, while the cities gain none. So what’s the answer?

Welcome to the great state of Seattle! [state motto: “If it’s not caffeinated, send it back”]

The Vinegar-Tomato Sauce State of Raleigh! [state color: halfway between Duke blue and UNC blue]

The Beechwood Aged State of St. Louis![ state left fielder: Lou Brock]

The Always Hustling State of Atlanta [state anthem: written and performed by Outkast]

City-states. Remember city-states!? Yes, I know, when we speak historically of city-states we mean entities independent of any other nation state – classic Venice, current Singapore or Monaco, but that doesn’t mean we can’t piggyback on their awesomeness. Texans already joke about the “People’s Republic of Austin” – let’s make it official! We can set a size minimum as either an explicit population threshold (e.g. 500k) or a moving bar, such as the population of the smallest state in the previous census. It’s essentially adding another option for a city to apply for inclusion in the next tier of our federalist system.

This is more feasible than you might think and vastly more feasible than amending the constitution.

Consider:

  1. These cities already have government infrastructures. The governor on day 1 is the current sitting mayor.
  2. The citizens of most medium- and large-sized cities derive the bulk of their regional identity from their city, not their state. Most urbanites will be thrilled at the notion of elevating the political status of their city while losing the affiliation of their previous state.
  3. New state coffers will be heavily subsidized with flag and swag sales the first few years (only mostly kidding)
  4. The remaining rural states will have the far more manageable task of trying to serve rural citizens without having to serve an urban voter base with radically different needs and preferences. Public goods will be better matched with the citizens of rural states as well.
  5. States will often look like Swiss cheese, which will be both hilarious and, slightly less importantly, will allow for constituents to even more easily vote with their feet when elected officials fall short in their duties.

Are there downsides? Sure.

  1. The speed traps before you enter and as you exit city-states into their rural envelopers will be aggressively extractive. There will be rampant attempts at exporting taxes across borders.
  2. Reconstituting water supplies as special districts supporting multiple states will be tricky.
  3. Coordinating interstate public goods will, no doubt, at times become even more farcical than the status quo.
  4. Decent chance this turns into a Neal Stephenson novel within 100 years.

But, in the medium and long run, I believe the benefits will greatly outweigh the costs. Throughout the pandemic there has been a constant tension, particularly in “red states”, between the public goods desired by the citizens in cities versus rural areas. While urbanites have been desperate for mask and vaccine mandates, rural citizens have been far more interested in consuming personal liberty and symbolic group-identity goods, at the expense of greater Covid cases and deaths for those in denser areas.

I’ve said it before and I’ll keep saying it tomorrow: there isn’t a red-blue divide, a religious divide, or a class divide. America is currently defined by an urban-rural divide. If we don’t adapt our institutions to reflect it and balance the equal political enfranchisement of people on both sides of that divide, it will continue to erode the integrity of our political infrastructure.

I imagine I don’t have to persuade many people that the integrity of the franchise is not something to be taken lightly. Regardless of the mathematical salience of an individual vote to any election, the fact remains that the less people believe their vote has at least the potential to be realized in the form of representation that serves them, the more they will look to alternative channels to the political process. And maybe, for the libertarian inside of you, the alternative you imagine might exist in the private marketplace for goods and services. But history informs us that the dominant alternatives to democracy are heritable lineage and bloodshed, and I don’t see any benevolent American scions laying in wait.

One Year of EWED Blogging

Joy BuchananLeave a comment

We would like to thank the readers and subscribers who have joined us since we started blogging in August of 2020. This has been a great experience. Special thanks to people who have linked to us. Most of our web traffic comes from the United States, but I am pleased to report that we receive visitors from almost every nation in the world.

We believe that the world is better when people keep learning. Reading and writing blogs is a good way to learn. All of the EWED writers have benefitted from reading other blogs. We want to put new facts and analysis into the pool.

Our three most-viewed posts so far for the year 2021 are

  1. Academic Publishing: How I think we got here by Mike Makowsky
  2. Coase and COVID by Jeremy Horpedahl
  3. GDP Growth in 2020 by Jeremy Horpedahl

Looking back to 2020, the most-viewed post was my Complacency and American Girl Dolls.

In winter of 2021 we got some new graphics, like the one below. The importance of the shipping container cannot be understated, for economic growth and trade. Every blog post individually is like one box, not very important on its own, a piece of the essential human discourse.

I see blogging as a complement to both research articles and Twitter. Blogs get published much faster than journal articles and they allow more depth than tweets. By writing a new post every day we stay accountable both to ourselves and to our readers.

The various EWED writers represent a range of opinions, but we all agree that blogging is a way to make “small steps toward a much better world”.