An ounce of inefficiency

Inasmuch as such things are of no enduring importance, I don’t suppose they matter much – although I suspect the British left-hand rule of the road is probably a bigger inefficiency than the American use of obscure measures. I don’t think French agricultural policy is a national fetish – it’s the result of an economic community mobilising directly in their own support. If only French workers had their act together as well as French farmers.

Lumping creationism in with traditional units though – that’s a bit too far. Creationism is all about authority. Teaching evolution directly attacks the notion that religious authorities are uniquely legitimate sources of truth. Intelligent design is an attempt to recast evolution in order to use claims to scientific authority to support the validity of religious authority.

Opposition to the metric system and to dollar coins are just fetishes. They may be uniquely American fetishes, but that kind of fetishisation is, as you point out, commonplace enough. Creationism is a different animal – it is the fault line in a real conflict over the legitimate sources of authority in people’s lives.

The bigger problem IME is with the “Can Do” attitude which infects Americans like a virus. Because of this attitude, insufficient attention is paid to good preparation or risk avoidance or learning from experience, since people think they can always wing it. I undertook numerous consultancy assignments in the 1990s with hi-tech American clients, and I was struck by how often people relied on luck seeing them through. This is evidence of both naivity and arrogance. The lack of preparation for post-invasion Iraq came as no surprise to me.

Puzzled by Scott’s comment about driving on the left. After all, it isn’t just the British, but the Japanese and the Indians too. In fact about 1/3 of the world’s population. What inefficiencies?

As far as I can see, very few supporters of creationism (or intelligent design or what have you) have any desire to see it taught in university biology departments [there are a handful of exceptions, like Bob Jones, that are resolutely stuck in the pre-Civil War era on most things] or applied by oil geologists. Their big objection is seeing evolution stated as fact in museum displays or taught in high schools. Broadly speaking the position seems to be like that with the metric system – scientists are welcome to be evolutionists as long as they don’t try and ram it down the throats of our kids.

A considerable majority disbelieve in natural selection. 80% of the members of the National Academies of Science and Engineering believe in it.

Beyond their hallowed portals, I can see two possible explanations: either the US runs a clue deficit with the rest of the world, importing people with a clue, or a large proportion of its technocrats are living in false consciousness, applying entirely different standards to their professional and political lives.

Having sales tax added at the point of sale might be a conscious decision: show people exactly how much they are paying in tax. A good thing, no?

The tenth of an inch and 2.54 mm resonates. Back in the 90s Russia was awash in 286 chips that had been brought in to be inserted into Soviet manufactured motherboards a few years earlier. But the engineers had stated, the place being entirely metric, that 2.54 was ludicrous and 2.5 would be used. Thus, of course, the imported chips didn’t fit.

That’s the story anyway, and whether it’s true or not we did buy up several thousands of the chips to refine for their gold content.

I also recall a screaming match with a seller of nickel. He simply refused to believe that the US could buy and sell the metal in anything so stupid as pounds avoirdupois. Couldn’t work out why I kept tapping 2.204 into the calculator when discussing prices. Had to show him a copy of the WSJ with the market quotations before he would believe me. And then when people tried to sell pgms…troy ounces and kilos Gaaahh!

I think Scott’s point is probably that the fact cars in countries near to the UK, such as Belgium, were always much cheaper than in the UK, but because back in Britain they were sub-optimum there wasn’t really the free competition to drive prices down.

Every nation has its own inefficiencies. The big one in the U.S. is not the metric system or creationism (!), but the legal system.

France has unions, the British a class system and royalty.

Wasn’t the channel tunnel delayed for decades for fear that the right- and left-hand traffic would collide head-on in the middle?

Should’ve been shaped as a moebius strip.

There was a letter in the Times in the early 1970s, suggesting that France-bound traffic should drive on the right, while Britain-bound traffic should drive on the left.

Wasn’t the channel tunnel delayed for decades for fear that the right- and left-hand traffic would collide head-on in the middle?

No. It’s a railway tunnel, and railways keep left-hand on the Continent too.

A price tag that doesn’t include sales tax isn’t incorrect. It’s correct. A price on an Amazon book doesn’t include shipping, but that doesn’t make it incorrect.
I don’t believe that prices without sales tax are inefficient. I’m sure they are somewhat inefficient if you’re used to reading prices with the tax included, but we aren’t, so we have no problem.

I also doubt that tipping is inefficient, unless you were thinking that allocating more money to service employees might be an inefficiency.

But you’re definitely right about the coinage.

Submit to foreign rule? Never!

Although there is a serious side to this, such as butchers in England being fined for selling beef by the pound. An interesting thing that I have noted (as an expatriate American living in Japan–now a metric country) in watching BBC World is that the correspondents reporting from the U. S. stubbornly use Fahrenheit degrees, feet and inches, miles and pounds and ounces. In one sense, the only place an Englishman or woman over 40 can feel at home is in the U. S.

And I still have to maintain a dual consciousness in these matters. When the news tells me it’s 35 outside, I can tell by the hum of the air conditioner or the heat waves rising from the road that it’s hot, but unless I remember that means it’s 95, I won’t really grasp it.

David B–

Japan has terrible accident statistics. Especially when you factor in the slower speeds on toll roads and the amount of time it takes to travel short distances, highway deaths are criminally high, as a result of tin can minicars (my son calls them you stack, you die) and a serious reluctance to strap up in rear seats; even though baby seats are reqired for small children, I see the kids bouncing around in the back or between the seats all the time.

Another, about the Chunnel: “Should’ve been shaped as a moebius strip.”

Soru: “But would the sign for the minimum speed limit you need to keep up in order to avoid falling off the road as it flips over be in imperial or metric?”

Inifinity. No units. Simple, impossible, perfect.

Ray (27),

Yes, and (i) and (ii) are also true when I buy a circular saw at Home Depot. The price on the tag doesn’t include sales tax. But when I go to the register, they do actually tell me how much to pay, and I pay by credit card. So I don’t understand your point.

By the way, there is a (very small) efficiency cost involved in including tax on the price tag: since you can’t (or anyway don’t) put fractions the smallest unit on the tag, you have to round off. And when you round off, the prices don’t always add properly. Seven items each costing $.14 exclusive of the 6% tax should cost $1.04 with tax, but include the tax in the price and it will be $.15 apiece for a total of $1.05.

I have to say that your list of ‘inefficiencies’ seem more like ‘things that seem odd to you’ rather than ‘things that cost Americans money’.

Consider sales tax–how does not quoting prices including tax cost money? Purchases have to be totalled up anyway — it doesn’t cost extra for the electronic register to calculate sales tax at the same time. Or do you think that, if sales tax were included in prices, people would keep a running mental total and have exact change ready at the register? Well, it wouldn’t matter if they did–since most of us use credit or debit cards anyway.

Or consider multiple levels of goverment. One has to keep in mind the scale of the U.S. — is it inefficient for Australia and New Zealand to have independent governments? California has more than twice the population of Australia, several more states are roughly as large, and quite a few more are in the same ballpark. In terms of population, New Zealand would be a small state in the U.S. (smaller than Maryland, larger than Connecticut). The idea behind multiple levels of government is that overall efficiency is enhanced by having local decisions made locally. Or are you proposing that centralization is always more efficient?

Coins? Well, there is some cost involved in that bills wear out faster so more printing is needed. But I’d rather have light paper dollars in my wallet than a jumble of heavy coins making a lump in my pocket. In any case, the only inefficiency there is at the mint, not at the level of the individual.

Metric system? In terms of road miles and lumber sizes, it was obviously more efficient to stay with existing units. Which American export industries (agricultural products, commercial aircract, software, semi-conductors, music, pharmaceuticals, hollywood movies) are burdened by the U.S. not using the metric system? Even if you can find an industry where both systems have to be supported, those costs are imposed on both U.S. producers who want to export from the U.S. AND any foreign competitors who want to export to the U.S., so no special inefficiencies are imposed on U.S. firms that their foreign competitors don’t also have to bear.

Creationism? In terms of education, the big difference is that the U.S. has no national curriculum. But is this efficient or inefficient? Would education be better managed if it were all done from Washington rather than countless local school boards? Would a huge centralized bureacracy cost less (Because it certainly wouldn’t do as good a job of satisfying local needs and values).

Do we have inefficiencies? Sure. Don’t get me started. Agricultural subsidies of various forms, for example (hey, let’s provide subsidized water to farmers to grow rice and cotton in the California desert–now there’s a winning idea. Or how about let’s have big tarrifs on sugar which will simultaneously impoverish growers in the 3rd world, jack up prices to U.S. consumers, AND drive candy makers out of the country–a rare trifecta).

Or how about, let’s subsidize tobacco growing for decades and then, instead of simply ending the subsidies and raising cigarette taxes, let’s go through the charade of having the states form a compact to sue the tobacco companies for damages incurred during those decades (even though smokers actually save us money by dying earlier), give trial lawyers a huge cut of the settlement, and then have each state spend the windfall as if it were manna from heaven all the while averting our eyes from the obvious fact that the ‘settlement money’ is not coming from the pockets of evil tobacco companies (who, after all, don’t have billions like that in their pockets) but from higher cigarette prices paid by addicted smokers who, by and large, tend to be low income people. The big tobacco companies are unscathed (actually, they benefit and were complicit in the deal, but that’s a complicated argument), the trial lawyers make out like bandits, the states waste billions of ‘free money’, and working class smokers pay through the nose.

Yeah, we got inefficiencies, you just have to know where to look.

Two differences between the Amazon checkout and the Home Depot checkout. Its very easy to go to the Amazon checkout, see the total price (including shipping) and decide to cancel the order. Not so easy if you have to carry things around and join a queue. The related difference is that there’s no time pressure on Amazon – you can leave the checkout price up for half an hour while you consider the cost. This kind of behaviour is actively discouraged in most shops.

Paying with a credit card does cut out the problem of sorting out the correct change, but credit cards account for a smaller portion of real-world purchases than of online purchases.

The bottom line is: they aren’t showing correct price for an item, simple as that. If you aren’t local, you have no idea: there may or may not be state sales tax, city sales tax, even, I think, county sales tax. In some places food and clothing are taxed, in other places exempt – why do I need to know all that? It’s between the retailer and the government.

Re #29: I believe that errors un conversion occur all the time. The Mars orbiter was only the most prominent one. I myself have run across errors like this from time to time. The reason is that engineers in the US are trained to use English units while scientists use metric units. American engineers use such units as foot-pounds, horsepower, and BTU’s. From long usage, they know the formulas and constants associated with these units, and switching to metric (although it has taken place to some extent) is a strain. So when a project includes both scientists and engineers, conversions are required, which introduces chance of error.

abb1,

The bottom line is: they aren’t showing correct price for an item, simple as that.

No, you’re wrong. It is the correct price. It’s just that here, the correct price does not include the tax, just as the correct price on Amazon doesn’t include shipping. (Interesting that amazon.de doesn’t charge for shipping, but neither here nor there.)

Slocum, I think you’d change your mind about coins if, say, nickels were replaced by notes. I like having pound coins or Aussie two dollar coins, although I guess it’s true that there isn’t much inefficiency at the personal level.

Amazon can’t show you the correct price -the price you actually have to pay for the product – until the checkout, because it depends on how many books you’re buying (and how you want them shipped, etc). Home Depot can show you how much it will cost you to buy the product, but choose not to.

Scott, not sure how we’d evaluate the counterfactual, but the road accident record of the UK is pretty good compared to much on continental Europe:

http://en.wikipedia.org/wiki/Traffic_safety

My guess would be that people driving on what is for them an unfamiliar side of the road compensate by being significantly more cautious.

You’re all completely missing the true advantage of the dollar bill over the dollar coin.

A dollar coin cannot be tucked into the G-string of a stripper.

An account of the switch from left to right in Sweden in 1967 is here, FWIW:

http://www.answers.com/topic/dagen-h?method=5&linktext=Dagen%20H

THe effect on the accident rate seems to have been trivial. But the other associated costs were horrific.

By the way, John Q, until the Aussies learn to play football with an efficient 11 people on a team, I’m not sure that you all should be picking at our excesses. ;-)

No, you’re wrong. It is the correct price. It’s just that here, the correct price does not include the tax, just as the correct price on Amazon doesn’t include shipping.

Jamie, shipping a separate service, separate item. You can buy 3-day shipping or two week shipping; shipping to US or to China.

It would’ve been the correct price if the Home Depot was charging you their price at their cash registry and then you had to go to a separate counter and pay sales tax to a G-man there. But this is not how it works: you pay all to the retailer and the retailer deals with the government.

For the retailer this is just another one of his expenses, his costs; just like electricity, rent, cleaning, whatever. What if the retailer said: the price is $10 plus 5% sales tax, plus 3% for electricity in the store, plus 7% to pay cashier’s salary.

I think the more important distinction is that the cost of shipping is always different. Amazon can’t say “This books costs $9.99 (assuming standard shipping options)” because that’s only the price if you buy nothing else. If you buy a TV and a book, the book will cost 8.50, if you buy two books the second one will cost 9.25, if you buy three books the shipping is free so the book only costs 8.10. You can’t have all that information on the book’s page, so you have to say “$8.10 (plus shipping)”.
The sales tax doesn’t change. Buy one book and the price including tax is $8.99, even if you have ten books and a car in your basket.

For some of the reasons given above, I have a hard time thinking of sales tax computations or coinage permutations as inefficient in the US. I don’t carry coins, when I can avoid it, and usually don’t pay with paper, so whatever gains would come from, say, a $1 or $5 coin are purely hypothetical for me. Fortunately, I guess, the city where I’m sitting has a sales tax that is closing in on 10%, making it so much easier to calculate! Think of the efficiency gain…

Multiple overlapping levels of government, however, are often inefficient, and this is particularly true at the local level, where there may be fewer good reasons for the practice. For example, where I live we have both county and city governments, with overlapping responsibilities. There doesn’t seem to be any reason, other than historical accident, for the continued operation of a county sheriff’s department alongside a city police department, but we pay for both.

For the retailer this is just another one of his expenses, his costs; just like electricity, rent, cleaning, whatever. What if the retailer said: the price is $10 plus 5% sales tax, plus 3% for electricity in the store, plus 7% to pay cashier’s salary.

But that’s not true — the tax is not like electricity. If you buy a product and have it shipped out of state (as opposed to taking it with you) then you don’t actually owe the tax. You do owe the tax in your home state where you receive the product (though many don’t pay it — which is a big issue for mail-order and internet commerce). People visiting and buying expensive jewelry in New York routinely do this to avoid the high taxes (and sometimes the retailer gives the customer the item anyway and ships an empty box, and sometimes they get caught doing it).

But really, this is a political issue — not one of efficiency. Do you want to expose the tax, which may generate anti-tax sentiment? Or hide the tax in order to suppress it (as in the fictitious ’employers share’ of the social security payroll tax).

Curious that very few have commented on the most dramatically strange part of the post: the attempt to tie in ‘creationism’ to economic inefficiency (and in particular, economic inefficiencies like metric systems, driving practices, etc).

This is good example of the inappropriate (and unconscious) bias in academia that conservatives are railing about. Because, while tieing ‘creationism’ into ‘tax practices’ could be technically correct (I suppose an argument can be made for it), it in fact just doesn’t ‘feel’ right. Its not at all clear that creationism has anything at all to do with economic inefficiency-rather, it sounds like a stretch-just kind of a weak attempt to slam creationism while discussing national habits.

Furthermore, when an academic is discussing economic inefficiency, you just know he’s going to mention something like creationism, or tax cuts for the wealthy, or something similar. One could just as easily mention the inefficiencies related to affirmative action (which are frankly far more related to economics than creationism is-and far higher), or tax burden, or failures of public schools and the burden of unionized teachers, or excessive control by the courts, or excessive environmental regulation-any of a number of ‘conservative’ viewpoints. But that would never happen.

Its not that big a deal, its not insulting or anything, but throwing in creationism just seemed so ‘tone deaf,’ so odd, yet so expected (“lets see; a post on tax pricing, driving preferences, layers of government, and whatelse is it going to be thrown in for a cheap dig? Military spending? Failure to understand other nations? American laziness in learning foreign languages? Oh, creationism. Ok. Mentally ignore this part-it doesn’t fit, but its the mandatory ‘academic slam of some conservative view’ addendum”).

Steve

For example, where I live we have both county and city governments, with overlapping responsibilities. There doesn’t seem to be any reason, other than historical accident, for the continued operation of a county sheriff’s department alongside a city police department, but we pay for both.

It’s even worse than that. Local government also includes school districts (who have independent governance and taxing authority) drainage districts, mass transit authorities (who often have their own police), port authorities, etc., none of whom necessarily have boundaries that coincide with those of political entities like cities, counties, townships, boroughs, or even states. And that’s not counting special service districts, quasi-private agencies within cities that sometimes have what amounts to taxing authority.

I think it was R. R. Palmer, talking about local government under the ancien regime, who said that until the French Revolution nothing had been abolished in a thousand years; they just akept adding more. For the eastern states especially, it’s been about three hundred years. It’s infuriating and measurably inefficient, and it’s not going to change because of anything short of a revolution.

It’s true that inter-state component of the sales tax is a mess; I’m talking strictly brick&mortar retail stuff. As far as it being political – sure, but it’s also a matter of convinience and efficiency. In this case political and marketing considerations trump common sense convinience and efficiency.

There is very little inefficiency in odd measuring systems because calculators are ubiquitous and cheap and students in the US learn multiple systems at an early age. Foreigners may have difficulty (I was one, once) as they might with a foreign language or customs. The easy facility with units of measurement is not just inherent in the base 10 system but also in how and when the system was learned. Measurements seem to be as ingrained as counting or multiplication tables are in native languages or denominations. Elementary students who learn multiple systems early, as they do in the US today, wouldn’t have to deliberately and consciously think about them. And with caculators, conversions are not difficult or time-consuming. The switch to a different measuring system, if weighed against the total cost involved may not present a net benefit.

The US has plenty of oases of efficiency. These are voluntary associations of individuals who strive for excellence and institutions with great leadership. However, as with the highly efficient institution where I am currently, there is a bland uniformity that, I think, has resulted from optimized efficiency that is in stark contrast to the chaos and simultaneous moments of brilliance that I encountered at various other institutions.

Don’t get me wrong. There is much room for greater efficiency and there should be a constant modification of present customs to optimize for that. I do hope our present administration does not start speaking of efficiency, discipline, and cleanliness.

From the post:

“to try and put”, “try and ram”

Where are John Emerson and abb1, prescriptivists, when we need them?

I’m quite happy the US doesn’t have high-value coins. I can’t be the only person who dislikes coins, and refuses to carry them (except to carry them home and them dump them in a jar or some such). Dollar bills are light, unobtrusive, and fit comfortably into a wallet. None of these facts hold true for coinage.

Actually, I thought that pretty much all men took this position. Lacking a purse, the idea of lugging around a bunch of coins in one’s pockets is annoying. Especially when said pockets already have cell phone, wallet, keys, and sometimes glasses.

Actually, growing rice in the Central Valley is incredibly efficient. So efficient, in fact, that Central Valley rice growers can successfully sell rice in Japan despite rice tariffs.

now, if you want to argue that the Central Valley Project and State Water Project should have never been built because they were a waste of taxpayer dollars, that’s one issue. the quick response is (a) too late now or (b) the projects have paid for themselves many times over in building the economic engine that is California.

If you want to argue about the nuances of federal water pricing now that the Projects do exist, the quick answer is once again that the California ag industry pays for itself many times over in employment, taxes, food security, low cost food, food variety, etc.

If you want to complain specifically about rice growing (as opposed to, say, dates or alfalfa), I refer you to the comment above about 5 year plans. Who, precisely, should be determining what farmers plant?

It’s not surprising that it’s a San Diegan who’s whining about water pricing. Of all the rapidly growing California cities, San Diego has done the least in developing water supplies. It has a beautiful natural groundwater basin that goes largely unused. Instead the city files meritless lawsuits against its regional water supplier. San Diego for years has not done what is necessary to deal with wastewater. Now that it’s under the gun, water bills are going up more quickly than they would had San Diego engaged in proper planning.

One reason that US retailers don’t add the sales tax to the price is that not everybody pays sales tax. If you’re buying something for the purpose of reselling it, or you’re buying something for a non-profit organization, you’re exempt from paying sales tax. Also, there’s a coordination problem. If McDonalds decides to reprice their menu to include sales tax, then suddenly the price of their burgers and shakes jump 8.25% (in my area) – what incentive does Burger King have to do the same? I imagine the number of people pleased by the gain in efficiency and transparancy would be dwarfed by the number of people driven away by the perceived jump in prices. Also, localities fiddle with their sales tax rates quite a bit – here in California, it seems like there’s always some ballot measure to fund something with a .25% hike in the sales tax. Imagine the Home Depot manager who has to re-label everything in the store every time someone takes out a special assessment for school repairs or a new sewage plant.

I can think of one US institution that shed a fussy old inefficiency to enter the modern era – the NYSE, which replaced it’s old fractional stock prices with decimals about a decade ago.

FMguru, they don’t have to re-label, just as they don’t have to re-label when the minimum wage or their electricity bill or their CEO’s salary go up.

It’s just another expense, expenses fluctuate all the time.

abb, the sales tax is not an expense of the seller; it is an additional fee to the (state,local) government paid by the buyer. So pricing the way we do here is the only honest way to price.

(This is, arguably, a difference between a sales tax and a VAT.)

Now, if you want to talk fetishistic inefficiencies, how about the retention of the mil ($0.001) in gasoline prices…

Looks like we have a new irregular verb:

I’m doing things the sensible, fair, natural way.

You’re thoughtlessly accepting a bunch of silly, petty inefficiencies that are each of little importance, but that add up to a nontrivial drain on your economy.

He’s imposing a set of patently unfair, economically ruinous “traditional” practices that enrich the entrenched interests for which he’s either an unwitting dupe or a scheming collaborator.

“Since few Americans travel abroad (less than a fifth own passports) ”
Americans do not need passports to travel within the western hemisphere. I was amazed that my wife could go to Mexico, Canada, and even Chile without even bringing her passport.

Inefficiency, like a lot of moral designation, is goal-directed. It gets its meaning from the place toward which efficiency aims.
Since that’s never clearly and succinctly proposed, these terms skate around with an assumption of consensus they may or may not have. Same with moral systems.
The reluctance to lubricate further an already exponentially-shrieking feedback cycle of naked efficency stripped of any kind of organic human governance has been ridiculed since the beginning of the 20th century.
I grew up on images of country folk made fun of because they doubted the sense of progress to planes and automobiles, and pesticides – their homes were portrayed as little more than shacks and shambles, their accents derided and the overall impression was of dirt and inefficiency contrasted with gleaming slick sterility and ever-quickening progress.
Hey hey my my.
There are larger contexts in which the term “efficient” can be applied. And smaller too.
An efficient thermonuclear device. The efficient distribution of white phosphor on civilian populations in areas of stubborn resistance.
Draining swamps and paving wetlands has had decades of adulation as an efficient use of resources. And, because of this unquestioning reverence toward immediately recognizable efficiency, there are still people around who won’t get the bitter irony of that.
Royal measure isn’t the sticking point, and the real conflict isn’t between biblical metaphor and scientific brickwork. The larger context is what gets too little attention, but it’s where all this takes place.
Efficiency toward what?
And then defend that stated goal as worthy of the sacrifices this “progress” has demanded.

“Given the nature of the soil and the amount of sunshine, California’s Central Valley and Imperial County had the ability to be some of the most productive farmland in the world, if the water supply could be managed. Through a series of huge projects (including two somewhat more famous dams on the Colorado River), this supply was assured. And any legitimate analysis of the total benefits accrued to the US economy demonstrate that the water systems have paid for themselves many times over.”

How is this relevant to the discussion? I’m not objecting to the delivery of water. I’m objecting to the delivery of water and a vastly reduced price compared to other people who get their water delivered through government-funded aqueducts.

“The very moment you write that the water is “deeply subsidized” you have already assumed your conclusion. To what other use should the water be put? Environmental? Residential?”

This is where we are having a problem communicating. To what other uses ought the water be put? If everyone were paying the same price we would find out. The problem is not that the government delivers water. The problem is that it delivers water at a vastly lower price to one set of water consumers compared to another. I am not assuming the conclusion. I am using the normal meaning of “subsidy”. This obviously deforms the market of water consumption toward the subsidized use. This leads to rather weird and wasteful situations like rice paddy farming in the desert. If the soil is so fertile, I’m quite confident growing would continue despite higher water prices. It is the growing of rice that would probably not continue on that land. I’m sure flooding the farmland every year is an extremely efficient use of resources for the farmer if he gets the water at an incredibly cheap price compared to everyone else. But that doesn’t make it efficient overall for the economy. It is very possible that the water would be BETTER used doing something else. But the subsidy for the flooding rice farmer keeps more efficient uses out of the equation because they are artifically made more expensive relative to flooding for rice farming.

Three more chosen inefficiencies:

1. not having id cards

2. drugs being illegal

3. a fair proportion of the criminal justice system

soru

I suppose the real question is whether an inefficiency imposes a one-time cost, or whether it imposes a constraint on growth. I suspect a lot of American boosters would argue that continental Europe’s inefficiencies (for instance, the less flesible labour market) directly impact economic growth, making it lower than the US.

WalMart doesn’t want to set a different price on that blue lamp for every different city it does business in.

I’m afraid I don’t understand this point at all. Are WalMart products the same (pre-tax) price in every store across the country? Are the price tags applied centrally?

How does shopping impose a real cost on the customer? A customer can’t just look at a price tag to find out how much something costs, they have to look at the price tag and then calculate the after-tax price.

Not everyone has to pay the sales tax, but most people do. I don’t think stores display the pre-tax price because its more convenient to the small minority of customers, and less convenient for the majority. (There are some stores where most customers don’t pay the text. It would make sense for them.) And tax levels may change, but they’re hardly the most volatile element of an item’s price.

“Military bases provide a massive local subsidy, due to spending by soldiers in the community. The feds should levy a tax on the community equal to the subsidy, so that a “market” for military bases develops. The base subsidy creates weird situations like the City of San Diego.”

Miltary bases have to be put somewhere in the US. In theory rice doesn’t have to be produced in the US at all.

By the way, I’m not sure you realize it, but your argument proves too much. You seem to be setting up a situation where one government outlay validates all government outlays. You suggest that either all are legitimate or none are. I don’t think that is logically necessary. You aren’t registering the difference between charging different consumers different prices for a government service and charging everyone the same price. Roads are built, and everyone can use them. The building of the roads is equivalent to the building of the water systems. Charging farmers less for water is different from building an access system. It would be like letting some people travel $1 per 100 miles on the highways while charging most people $1 per mile.

Subsidizing the infrastructure is one thing. Having the government differentially charge consumers is another. Both are ‘subsidies’ but only the latter is a preferential subsidy.

Responses to intervening posts:

anyone who thinks highways are non-rivalrous goods doesn’t live in Southern California. Here, they most certainly are; virtually all planning decisions being made in both the private and public sector consider traffic.

military bases are clearly rivalrous goods; why shouldn’t bases go to the highest bidder? How much should the citizens of San Diego pay for the privilege of having the Navy in their community?

As far as costs of having dollar bills rather than dollar coins (using numbers from Dept. of Treasury):

# of 1$ bills printed by Engraving Office per day:
16,650,000

per year:
6,077,250,000

Cost of printing a bill = 4.2 cents = .042$

Total cost of printin’ all them bills in a year:
25,524,4500

(Note this assumes that the 4.2 cents represents a real opportunity cost of production foregone by printing the bills)

Now suppose that we were to do a once for all switch to 1$ coins, which we’ll assume last for ever. Assume also that this switch is costless (the coins are free to mint) just cuz I don’t feel like looking the relevant data up. How much is the cost of having 1$ bills?

According to the Doh’T 95% of all newly printed currency is made to replace old worn out bills. Assume this applies to 1$ bills specifically.

So total cost of a once a year replacement of old bills is: .95*25,524,4500= 242482275

As percentage of GDP:
US GDP in current dollars = 11,750,000,000,000

Cost of replacement as % of GDP = .00002%

82 cents per person per year

Personally I’m quite happy to shell out the 82 cents per year so that I don’t have to carry around more heavy, jingling, easy to lose change.
(And as % of median income it’s even less than the .00002 due to the fact that income distribution is not symmetric and some other stuff)

and of course in the first post “cost of replacement” should read “cost of paper money vs. coins”

I can’t comment on the water use or dollar coin issue, but one reason for not posting sales tax on prices is that there are so many different rates and varying exemptions. Texas has a state sales tax, but also all the big cities have a local one as well. Arizona doesn’t have one for clothes. I understand that most chain stores program pricing for their checkout scanners from a central location. Including a zillion sales tax rates would be much more inefficient than to use the system we’ve got.

As for why companies use $9.95 instead of the much more rational $10, I have no idea.

In areas where there are customer-specific exemptions (not many, AFAIK) it’s not so clear, but unless most people are exempt, it would be better to post the tax-inclusive price.

In the rest of the world, of course, if you’re exempt you still pay the full price and then ask the authorities for the refund. This way retailes don’t have to be experts in the tax law.

# 101

“[now, the practice of rice farmers fallowing their fields, taking their water allocation then flipping it to a water buyer and pocketing the difference is an outrage. but that’s only a small part of the story.]”

That, in itself, shows what is wrong with the current subsidy system. Obviously, such a farmer would only do that if they made a larger profit by doing so rather than growing rice. So the water subsidy to growing rice but not whatever he flips it to is an inefficiency, moving the resouce (water) from a higher value use to a lower, thus impoverishing the nation.

Re: creationism. While I agree that it is a bit odd to include it in a list of essentially economic inefficiencies, I’ll play devil’s advocate. Creationism is an artificial restriction on the number of science graduates (particularly in the fields of biology, geology, and cosmology). In addition it damages the science that is done by the creationists who do get science degrees – eg in biology (Michael Behe, say) or in archaeology. If you’re committed to a 6,000 year old earth, your analysis of a neolithic find isn’t going to be particularly good. Consequently creationism, and the relatively easy ride it gets from prominent non-creationists, distorts the market for scientists and lowers the average quality of scientific output. Textbook inefficiency.

Juche 95
Gregorian 2006

Now what is more inefficient than our calendar year with the costly four digits that cause countless billions of extra keys being stroked on countless keyboards daily, and this is not even considering the countless billions of extra megabytes of storage space that four digits take, as compared with the much more efficient Juche calendar dating method, which takes two digits. All the world taps on their keyboards today ‘2006’ while the ultra efficient North Koreans tap on their keyboards ’95’ … uhh, make that the North Koreans tap on their refurbished Underwood typewriters ’95’ (clack, clack … ding)

“….is the last outpost of the cheque book, now that is inefficient”

Indeed. Why does anyone still use them?

I see the North Koreans are facing a Y1C crisis by decade’s end. Will it be enough to finally bring down the regime?

I remained comfortably unaware of the inscrutability of American coinage until a Welshman pointed out that there is no “5” on a nickel, nor a “10” on the dime, or a “25” on the quarter.

120 comments later, it seems none of the American readers reached into their pockets to check this.

While the nickel indeed does not have the numeral “5” on it, it does bear the word “five”. Same goes for the penny and the wrod “one”. The dime is marked with “one dime” and the quarter with “quarter dollar”, which (thinking back to the recent discussion of the guinea) allows for a recalibration of the monetary system. For instance, the dime could be made the smallest unit, with three dimes to the quarter and four quarters to the dollar.

There are a lot of things that can be automated if you can feed coins into a machine; it’s more complex to feed paper bills into a machine. Vending machines, bus/train tickets, etc. go more smoothly.

The transit vending machines in both New York and London (and I assume elsewhere) take plastic. With fares at $2.00 in the former and £1.20 and up in the latter, the utility of small change in this context is dwindling.

-“As for why companies use $9.95 instead of the much more rational $10, I have no idea.”

As any Marketing 101 professor will be happy to tell you, psychologically, consumers think of $9.95 as “$9”, not the more accurate “$10”, and are more likely to think of it as a relative bargain. The same logic applies to sales tax – why make customers think your products are more expensive than they are?

As a postscript, I have to say that I really hate currencies with significant value coins. Walking around with heavy pound coins in Britain drove me crazy, both from a weight and a storage perspective. I love being able to slip and fold lightweight paper money, and if they ditched coins entirely I wouldn’t mind at all (although the inflation as businesses uniformly rounded their prices up to the next dollar would be annoying for a little while).

Comment 124:

While the nickel indeed does not have the numeral “5” on it, it does bear the word “five”. Same goes for the penny and the word “one”. The dime is marked with “one dime” and the quarter with “quarter dollar”

Back when the US monetary system was created, the units were: eagles, dollars, dismes (dimes), cents, and milles. Each was worth ten times as much as the previous one. The 1792 Coinage Act created coins for each unit, half of each unit (the nickel used to be the half dime), quarter dollars, and quarter eagles.

That being said, there’s no good reason for modern coins not to have numerals on them. In fact, I’m not convinced that we need dollars and cents as units. Surely one or the other is sufficient.

“Walking around with heavy pound coins in Britain drove me crazy”: well you should have used Scottish one pound notes instead. Wonderful, the diversity of a non-federal system.

If a Boeing 767 runs out of fuel at 41,000 feet what do you have? Imperial/metric conversion confusion also contributed to the Gimli Glider incident.

Maybe long ago some marketing hot shot made this assertion (without support) and MBA types (who can be more foolish than a village idiot) ate it up in their arrogant smugness (we can fool the little people!).

It must have been very long ago then. I can remember my dad buying a car at £499/19/6 (Nineteen shillings and six pence = 97 1/2p) in 1960. In those innocent days, before MBAs had ever been heard of, marketing was incredibly naive and it’s just possible that somebody believed people were going to think they were getting a car for £400 and change, but I suspect it’s more likely that this habit grew up to enable advertising slogans ending in “… all for under £500!” or whatever sum applies.

I’m with Nick here. The smallest note in Switzerland is the 10-franc bill, and the smallest coin in real circulation is 10 centime (there’s a 5c coin, but you almost never see it). No god-damned pennies! Usually you have one 5-franc coin in your pocket, a few 2 and 1-franc coins and some small change, and that’s how you pay for your coffee, croissant, parking, all that kind of stuff. You don’t have to open your wallet all the time.

Also, 100 and 200-franc bills are very common, people use cash a lot more than in the US.

Oh no, you besmirch the honorable Lincoln penny! Perhaps you don’t understand the real purpose of the puny penny, certainly not to be jingled in your pocket, but pennies are placed strategically throughout the American landscape, and are simply watched. Rain, hail, snow, wind, sleet, or burning sun, the penny awaits its moment, and that moment is when someone who really understands Ben Franklin’s maxim on living, “a penny saved is a penny earned,” stoops to pick one up.

The sales tax question is grudgingly more efficient: when you have state sales tax and local sales tax, and various exceptions that change according to state and local law, forcing vendors to mark up items at after-tax prices would be time-consuming and expensive

Why? The vendor is going to know what taxes and exceptions apply better than the customers – they have to, since they have to know how much money to collect at the register. And its not like the goods come from some off-shore warehouse pre-tagged – each shop is going to put the price tags on anyway, so why not put the post-tax price on?

Ray,
Actually, in many cases the goods are pre-tagged with the retail price, especially those going to the large chains like Target or Sears.

I believe they do, except for the occassional local store mark-down for some special reason. In that case, the mark-down usually noted by a special coupon or sign on the shelf. The price tag on the item still has the regular retail price.

That sounds weird to me. For context, the food in supermarkets in Ireland tends not to have price tags at all, there are signs on the shelves instead. Larger ticket items are individually priced in store. But if that’s the way things are generally done in the US, that is a good reason for not including sales tax in a price.

Moving to USA from Israel, the best thing was the lack of significant coins – now I can go “coinless” and actually have a wallet that fits in my pocket.
I don’t know how I’d even be able to live somewhere else.

Regarding tax, this seems to be a general thing that in the US you are more aware of sales tax, income tax etc. while in Israel they try to make the tax as transparent as possible (everyone quotes the prices and salaries after tax, many people will not even be aware how much tax they are paying). Perhaps it’s not a coincidence that Israeli taxes are higher.

That said, I doubt I’ll ever be able to understand what is an oz (and how you pronounce it).

oz is ounce, pronounced like ‘bounce’ without the ‘b’.
16 ounces is a pound, and 14 pounds is a stone, and 8 stone is a hundredweight (because it contains 112 pounds, you see), and 20 hundredweight (or 2240 pounds) is a ton. Easy!
Or 1 oz is just under 30 grams, which is just under .03 kg, or a little under 30,000 mg, if you can remember all of that without your heading exploding from the sheer complexity of it all.

John,
I am a software developer with clients who supply products to large chains like Target. For many (not all) items, my clients pre-tag the packages with the retail price.