Friday, May 31, 2013

The great Chinese Famine

Bret Stevens at the Wall Street Journal writes about Tombstone: The Great Chinese Famine, 1958-1962 :
Mr. Yang's father would die within three days. Yet it would take years before Mr. Yang learned that what happened to his father was not an isolated incident. He was one of the 36 million Chinese who succumbed to famine between 1958 and 1962.
It would take years more for him to realize that the source of all the suffering was not nature: There were no major droughts or floods in China in the famine years. Rather, the cause was man, and one man in particular: Mao Zedong, the Great Helmsman, whose visage still stares down on Beijing's Tiananmen Square from atop the gates of the Forbidden City.

Why would a book that documents the "single greatest atrocity of the 20th century" be allowed in China, a country with a repressive government?
It also needs a certain number of people who understand the full truth about the Maoist system so that the party will never repeat its mistakes, even as it keeps the cult of Mao alive in order to preserve its political legitimacy. That's especially true today as China is being swept by a wave of Maoist nostalgia among people who, Mr. Yang says, "abstract Mao as this symbol of social justice," and then use that abstraction to criticize the current regime.

Saturday, May 18, 2013

Price discrimination in education

The average tuition discount rate for college freshmen is now 45%. So even though the sticker prices are very high for many schools, the actual amount that students are paying is only slightly more than half of that.

Colleges price discriminate, which means that they charge different prices to different students. They do that because they are like hotels and airlines--they have very high fixed costs by very low variable costs. They may not do it all that well, but the cost structure pretty much guarantees that they have to try.

I recall that many years ago I tried to explain to the director of financial aid at the college I taught at for many years the idea that what he saw as financial aid was actually a pricing strategy that economists called price discrimination. He was outraged at the very idea that he was doing something called "price discrimination." I realized then that the college would always be struggling to get students when they had no clue as to what they were doing in granting aid. (The school I taught at, I am told, has a tuition discount rate substantially higher than 45%. I am out of the loop so I do not know if the people currently in charge of admissions and financial aid have figured out that they are pricing like hotels and airlines.)

Sunday, May 12, 2013


"Isn't it a strange thing," [Coolidge] asked Barton, "that in every period of social unrest men have the notion that they can pass a law and suspect the operations of economic law?"
From Coolidge, by Amity Shlaes, p 191

I picked up Shlaes' book because the local library had a copy and I had read and enjoyed The Forgotten Man: A New History of the Great Depression. If I had received this book to review for Choice, I would have written something like this:

Calvin Coolidge became president on the unexpected death of Warren Harding in 1923 and won re-election in 1924. He declined to run in 1928 despite pressure from his party. As president he cut taxes, spending, and government debt, leaving government smaller than when he took office. The low ranking professional historians give him reflects their bias for activist presidents. In this view the prosperity during his administration was accidental, not a result of his efforts to curtail government. Shlaes disagrees, arguing that by reducing the role of government, Coolidge encouraged private-sector expansion. She describes how his determination to cut spending overcame opposition from those wanting to spend more on veteran's bonuses, farm subsidies, defense, aid to flood victims, and an ambitious dam building program proposed by Commerce Secretary Herbert Hoover. Coolidge emerges as a determined man respected and popular not because he followed public opinion but because he did what he thought was the right thing to do. That determination and principle combined with luck and a group of dedicated supporters carried him from state legislature to governor of Massachusetts to the vice presidency. Highly recommended, all audiences.

That just makes the 190-word limit for Choice reviews.