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by Ted on February 4, 2004

I just noticed that John Quiggin’s post below was the thousandth post on Crooked Timber.

At this rate, we’ll catch up with Instapundit thirty years after he quits blogging. Go us.

Driving hard

by John Quiggin on February 4, 2004

Kieran’s piece on kids being driven to school reminded me of a post I’ve been planning for a while. One of the issues debated at length on my blog is that of speeding and law-enforcement measures such as speed cameras. I’ve argued against speeding and in favor of rigorous law-enforcement. Not surprisingly, and perhaps reflecting the fact that more than 80 per cent of drivers regard themselves as above-average, this has been very controversial. You can read some instalments in the debate here and here or use the search facility for “speeding”. Unfortunately most of the extensive and interesting comments were lost in a database failure.

In the course of this debate I discovered the fact, surprising to me, that, although the rate of road deaths per person in the United States is nearly twice that in Australia and the United Kingdom, much of this difference can be accounted for by the fact that distances travelled in the United States are a lot higher and are rising (there are problems with the numbers and biases in the measure, but I’ll leave that to one side for now). The differences between US and UK are plausible given differences in population density and well-developed public transport in London at least, but the differences between the US and Australia certainly surprised me. Australia is every bit as car-dependent as the US and has much lower population density.

All of this is a prelude to the fact that, in economic terms, time spent travelling is a really big deal. In their book Time for Life, based on the 1985 US Time Use Study, Robinson and Godbey estimate that the average adult American spends 30 hours a week in paid employment and 10 hours a week travelling (they also, controversially, argue that working time has been falling, not rising). It’s pretty clear that distances and times spent travelling have increased since 1985 in the US (in both the US and Australia, driving is by far the dominant mode of travel).

If, as I’ll argue below, most travel should be regarded as being in the same economic category as working and if, as the stats linked above imply, Americans spend about twice as much time travelling as Australians, then reducing travel times to the Australian level would be equivalent to a productivity improvement of between 12 and 15 per cent. As it happens, combined with the relatively small difference in hours of paid work, adjusting for hours of work and travel would just about eliminate the gap between Australian and US GDP per capita (about 20 per cent on standard PPP estimates).

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Limiting limited liability

by John Quiggin on February 4, 2004

Via Lawrence Solum, I found this interesting post from Professor Bainbridge arguing that corporations should not be compelled to pay reparations for past wrongdoing (in this case, complicity in slavery). He says

Punish the wrongdoers, you say? Sorry, but the corporation’s legal personhood is a mere legal fiction. A corporation is not a moral actor. Edward, First Baron Thurlow, put it best: “Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and nobody to be kicked?” The corporation is simply a nexus of contracts between factors of production. As such, there is no moral basis for applying retributive justice to a corporation – there is nothing there to be punished.

So who do we punish when we force the corporation to pay reparations? Since the payment comes out of the corporation’s treasury, it reduces the value of the residual claim on the corporation’s assets and earnings. In other words, the shareholders pay. Not the directors and officers who actually committed the alleged wrongdoing (who in most of these cases are long dead anyway), but modern shareholders who did nothing wrong.

This seems plausible. On the other hand, the obvious implication (one that was clearly implicit in Thurlow’s original point) is that the principle of limited liability is untenable, at least in relation to civil and criminal penalties for corporate wrongdoing. The wrongdoers are, as Bainbridge says, the officers and shareholders at the time the wrong is committed, and they should be held personally liable. The law has moved a bit in this direction in recent years, but Bainbridge’s argument implies that it should go a long way further, restricting the principle of limited liability to the case of voluntarily contracted debts.

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Walking to School

by Kieran Healy on February 4, 2004

Kevin Drum asks why kids don’t walk to school anymore:

according to the CDC, only 31% of children ages 5-15 who live within a mile of school walk or bike. That’s down from 90% in 1969.

But I still can’t figure out why. Why do parents ferry their kids around when there’s no reason for it? What’s the motivation?

There might be more than one initial impetus — irrational concerns about safety, heavier school backpacks making walking more difficult, busier parents using the commute as quality time, and the like. Once it gets moving, the phenomenon seems vulnerable to a self-reinforcing tipping phenomenon. By not letting your child walk to school because the streets aren’t safe, you take one more child off the sidewalks and incrementally exacerbate the problem of deserted streets.

Like the original Schelling tipping model of racial segregation , this explanation has some very attractive characteristics. It’s parsimonious, self-propelling and grounded in simple, disaggregated individual choices. It’s got all the desiderata of an elegant theory that satisfies the strictures of methodological individualism mentioned recently. It might be right. But there’s still a good chance that, empirically, it’s wrong.

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