On Crooked Timber, John Quiggin has been rehearsing the arguments from an upcoming book called "Economics in Two Lessons," and the latest installment asks why, if there's no such thing as a "free lunch," we're not all still living in caves? Read the rest
You'll remember Derek Khanna as the Republican House staffer who got fired for writing a paper that used careful objective research to argue for scaling back copyright. Now, Khanna is a volunteer fellow at R Street, where he's expanded on his early work with a paper called Guarding Against Abuse: Restoring Constitutional Copyright [PDF], which tackles the question of copyright terms from a market-economics approach, citing everyone from Hayek to Posner to the American Conservative Union.
There are lots of critiques of copyright term and scope from the left, but this is not a left-right issue. Khanna is a rigorous thinker, a clear writer, and someone who shows that whether you're coming at the question from a business/markets perspective or one of free speech and social benefit, limits on copyright make objective sense. Read the rest
A new study on the link between financial speculation in commodity markets and food-price spikes shows that the model can be used to predict future food-price spikes, strengthening the case that financial speculators (fleeing the collapse of the housing market) art the root cause of the violent food-price swings that have been blamed for global starvation, riots and political instability.
The new paper -- M. Lagi, Yavni Bar-Yam, K.Z. Bertrand, Yaneer Bar-Yam, UPDATE February 2012 — The Food Crises: Predictive validation of a quantitative model of food prices including speculators and ethanol conversion -- was produced under the auspices of the New England Complex Systems Institute.
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In the new study, predictions made by the researchers’ original model are compared to actual food prices between March 2011 and January 2012. Placed on a graph, the lines match closely, and do so despite spanning a major change in price trends at the last bubble’s peak.
“If you have a straight line, extend it and say, ‘Aren’t we predictive,’ it doesn’t give that much confidence,” said Bar-Yam. “If it changes direction, that’s a much more severe test of what’s happening.”
Both the European Union and United States are now considering whether and how to limit commodity speculation. In the U.S., such limits are required by the Dodd-Frank Act, but have been fiercely resisted by the financial industry.
It’s expected that the U.S. Commodity Futures Trading Commission will enact speculation limits by the end of 2012, though they might still be blocked in court. But even if the rules pass, they’re arguably weak, focusing on “position limits,” or caps on the maximum number of contracts a single speculator can hold.