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100% All Natural

The Dallas Fed recently published a surprisingly good article on the issue of supply, demand, scarcity and economic intervention within the petroleum market.

Note: the always entertaining MythBusters television show aired an interesting episode on alternative fuels a couple weeks ago. The biodiesel solution made of used cooking oil from french fries worked fairly efficiently (~90%) in an unmodified diesel engine.

Via The Perfect Substitute.

I see no economic law being violated or market failure occurring when the concept of “scalping” is lorded around. Every price point above zero is technically “scalping.” There is no thin red line or grey area that this emotionally-based argument can be justifiably used. In fact, among others, investigative reporter John Stossel argues that “price gouging” ensures that scarce resources go only to those who really need it.

With this said, it appears that everyone’s favorite ticket-selling business is now joining the Reality-based community and will auction off back-row seats rather than merely sell at “below market prices.” In effect, they are trying to knock the wind out of the sails of competitors who are reselling their tickets at higher than face value (management just got a memo on the whole “scarcity” thing).

This whole quagmire smacks of ignorance to how prices come about. Although this is a fairly complex issue, it’s a microcosm of socialism in action — the fiat declaration of what something is valued. In fact, I discuss this issue in my recent article on Net Neutrality.

Variable pricing, based upon the relative demand of a service, is effectively used to price cell phone minutes, seats in an airplane, and even where you will sit at a baseball game. Consequently, this is an issue that has been debated for decades by economists, however for a non-academic overview regarding the conundrum in the sport world see: “Case 7.1: Variable Ticket Pricing, Should the Minnesota Twins Catch the Wave?”

A widget is only worth as much as someone is willing to pay for it and apparently, Ticketmaster has been leaving money on the table. While there are numerous statistical methods used for determining how to set prices for products (which try to take into account variables like weather, time of day, location, opponent, etc.), the fact remains that the consumer has the ultimate authority, as they vote for prices with their wallets.

In 1980 astronomer Carl Sagan televised a production he had worked on the previous two years. It was the study of life on the grandest scales as seen with galaxies and at the smallest, as seen with atoms (ala Powers of Ten) — and was appropriately called Cosmos.

I’m not entirely sure how I missed its broadcast and its subsequent showings year after year, however, thanks to the internets, you can see all 13 episodes (with Spanish subtitles no less).

Below are a few comments I noted while watching the first two episodes.

While it is my understanding that there was a revised and updated version recently released last year (the 25th anniversary edition), this edition lacked several notable headline items that would probably excite any astrobiologist such as extrasolar planets.

These were first discovered in 1992 and over 150 have been discovered thus far. While most of these planets are larger than Jupiter, new telescopes are being developed which can shrink the measurable size (mass) to that of earth itself.

In fact, recently a planet merely 5 times the size (mass) of earth was discovered. This is in addition to 3 planets the size of Neptune recently found as well. And while I do not have the resources to fund it, one could argue that this is an area that should be included in any update.

In episode 2, Sagan discusses the Heikegani crab from Japan. Its shell looks like that of a scowling samurai warrior. Apparently over the years it has been a tradition to throw crabs back into the water if their shell looks like this scowling samurai, whereas those that did not were then consumed. And as a result of this artificial selection, many of the crabs populating the sea floor have shells with these scowling warriors on them, simply because they had a chance to reproduce and flourish.

While Sagan then goes on to discuss other parallels in the natural world, one historical note that popped into my head was that of Gresham’s law, “how bad money drives good money out of circulation.” The debasement of currency through fiat has been done through a process of artificial selection. The classic example is the case of dimes and quarters minted prior to 1964; they actually were comprised of about 90% of silver. Post-1964 they were made with copper and nickel. As time passed and people learned of the changes, these denominations were removed from circulation by individuals of every political stripe, creed, religion and so on. Why? Because they were worth more than their replacements which were being pumped into circulation. As a result, the “bad money” effectively drove the “good money” into the safety boxes of history.

Mid-way through the episode, Sagan put together a rather neat illustration of how the “option tree” of life separated into different organisms. He did this through the use of computer morphing and looked vaguely similar to what Will Wright has done with the upcoming game of “Spore.” In fact, this episode highlighted many of the early stages that a player will encounter in the game — from fragile water-bound cell to an intelligent multi-organ creature capable of walking and even flying.

If you missed it, I recall watching a show on the Discovery Channel several years ago that fleshed out Sagan’s theory of life existing in the seemingly inhospitable climates of gas giants. He called these hypothetical organisms, floaters, hunters and sinkers. Neat to see where this original idea first came from — nor is it too far fetched considering extremophiles here on earth.

The only two major distractions I have had thus far is the way Sagan speaks. He sounds and talks a lot like Agent Smith from The Matrix. His slight stammering and accent immediately set a light off in my head — I wonder if he likes the smell of humans?

The other annoyance was his little desk in the spaceship. I don’t quite get how or why he gets up out of his seat to look at the screen. I wonder if subsequent cinematic space operas used this tactic to emphasize dramatic events. While it might have worked for Star Trek Voyager, it really didn’t work on me… he had me with “I fly a space ship the size of a dandelion.”

See also: Maybe I’ll Grow A 3rd Leg and Bananas and Neo-Creationists and Selective Videos and Computer Simulation.