When to Rob a Bank: ...And 131 More Warped Suggestions and Well-Intended Rants (3 page)

Raise your hand if you hate libraries.

Yeah, I didn’t think so. Who could possibly hate libraries?

Here’s one suggestion: book publishers. I am probably wrong on this, but if you care about books, hear me out.

I had lunch recently with a few publishing folks. One of them had just returned from a national librarians’ conference, where it was her job to sell her line of books to as many librarians as possible. She said that there were twenty thousand librarians in attendance; she also said that if she got one big library system, like Chicago’s or New York’s, to buy a book, that could mean a sale of as many as a few hundred copies, since many library branches carry several copies of each book.

That sounds great, doesn’t it?

Well . . . maybe not. Among writers, there is a common lament. Someone comes up to you at a book signing and says, “Oh, I loved your book so much, I got it from the library and then told all my friends to go to the library, too!” And the writer thinks, “Gee, thanks, but why didn’t you buy it?”

The library bought its copy, of course. But let’s say fifty people will read that copy over the life of the book. If the library copy hadn’t existed, surely not all fifty of those people would have bought the book. But imagine that even five people would have. That’s four additional book sales lost by the writer and the publisher.

There’s another way to look at it, of course. Beyond the copies that libraries buy, you could argue that, in the long run, libraries augment overall book sales along at least a few channels:

        
1. Libraries help train young people to be readers; when those readers are older, they buy books.

        
2. Libraries expose readers to works by authors they wouldn’t have otherwise read; readers may then buy other works by the same author, or even the same book to have in their collection.

        
3. Libraries help foster a general culture of reading; without it, there would be less discussion, criticism, and coverage of books in general, which would result in fewer book sales.

But here’s the point I’m getting to: if there were no such thing today as the public library and someone like Bill Gates proposed to establish them in cities and towns across the U.S. (much like
Andrew Carnegie
once did), what would happen?

I am guessing there would be a huge pushback from book publishers. Given the current state of debate about intellectual property, can you imagine modern publishers being willing to sell one copy of a book and then have the owner let an unlimited number of strangers borrow it?

I don’t think so. Perhaps they’d come up with a licensing agreement: the book costs twenty dollars to own, with an additional two dollars per year for every year beyond year one it’s in circulation. I’m sure there would be a lot of other potential arrangements. And I am just as sure that, like
a lot of systems that evolve over time
, the library system is one that, if it were being built from scratch today, wouldn’t look anything like it actually does.

If there was ever a time when it made sense for economics professors to be given tenure, that time has surely passed. The same is likely true of other university disciplines, and probably even more true for high-school and elementary-school teachers.

What does tenure do? It distorts people’s effort so that they face strong incentives early in their career (and presumably work very hard early on as a consequence) and very weak incentives forever after (and presumably work much less hard on average as a consequence).

One could imagine some models in which this incentive structure makes sense. For instance, if one needs to learn a lot of information to become competent, but once one has the knowledge it does not fade, and effort is not very important. That model may be a good description of learning to ride a bike, but it is a terrible model of academics.

From a social standpoint, it seems like a bad idea to make incentives so weak after tenure. Schools get stuck with employees who are doing nothing (at least not doing what they are presumably being paid to do). It also is probably a bad idea to give such strong incentives pre-tenure—even without tenure, young faculty have lots of reasons to work hard to build a good career.

The idea that tenure protects scholars who are doing politically unpopular work strikes me as ludicrous. While I can imagine a situation where this issue might arise, I am hard-pressed to think of actual cases where it has been relevant. Tenure does an outstanding job of protecting scholars who do no work or terrible work, but is there anything in economics which is high quality but so controversial that it would lead to a scholar being fired? Anyway, that is what markets are for. If one institution fires an academic primarily because they don’t like his or her politics or approach,
there will be other schools happy to make the hire. There are, for instance, cases in recent years in economics where scholars have made up data, embezzled funds, etc., but still have found good jobs afterward.

One hidden benefit of tenure is that it works as a commitment device to get departments to fire mediocre people. The cost of not firing at a tenure review is higher with tenure in place than it is without it. If it is painful to fire people, without tenure the path of least resistance may be to always say you will fire the person the next year, but never do it.

Imagine a setting where you care about performance (e.g., a professional football team, or as a currency trader). You wouldn’t think of granting tenure. So why do it in academics?

The best-case scenario would be if all schools could coordinate on dumping tenure simultaneously. Maybe departments would give the deadwood a year or two to prove they deserved a slot before firing them. Some non-producers would leave or be fired. The rest of the tenure-age economists would start working harder. My guess is that salaries and job mobility would not change that much.

Absent all schools moving together to get rid of tenure, what if one school chose to unilaterally revoke tenure? It seems to me that it might work out just fine for that school. It would have to pay the faculty a little extra to stay in a department without an insurance policy in the form of tenure. Importantly, though, the value of tenure is inversely related to how good you are. If you are way over the bar, you
face almost no risk if tenure is abolished. So the really good people would require very small salary increases to compensate for no tenure, whereas the really bad, unproductive economists would need a much bigger subsidy to remain in a department with tenure gone. This works out fantastically well for the university because all the bad people end up leaving, the good people stay, and other good people from different institutions want to come to take advantage of the salary increase at the tenure-less school. If the U of C told me that they were going to revoke my tenure, but add $15,000 to my salary, I would be happy to take that trade. I’m sure many others would as well. By dumping one unproductive, previously tenured faculty member, the university could compensate ten others with the savings.

Think of all the service people who habitually get tips: hotel bellmen, taxi drivers, waiters and
waitresses
, the guys who handle curbside baggage at airports, sometimes even
the baristas at Starbucks
. But not flight attendants. Why not?

Maybe it’s because they’re thought to earn a pretty good living and don’t need the tips. Maybe it’s because they’re simply thought to be salaried employees of a sort that for whatever reason shouldn’t accept tips. Maybe for some reason they are actually prohibited from accepting tips. Maybe
it harks back to the day when most flight attendants were women and most passengers were men—and given the somewhat mystical (or perhaps mythical) reputation of the amorous businessman and the foxy stewardess, the exchange of money at flight’s end may have raised some questions about just what the stewardess had done to deserve the tip.

Still, it’s very odd to me that so many service people who perform similar functions get tipped and that flight attendants don’t. Especially when they often work so hard for so many people, running back and forth with drinks, pillows, headphones, etc. Yes, I know that most people are pretty unhappy with the airline experience these days, and I know that the occasional flight attendant is crabby beyond belief, but in my experience most of them do a really great job, often under trying circumstances.

It’s not that I’m advocating for yet another kind of worker to get tips. But having flown a lot lately, and seeing how hard flight attendants work, it struck me as odd that they don’t get tipped. At least I’ve never seen anyone tip a flight attendant. And when I asked flight attendants on my last five flights if they’d ever gotten a tip, each of them said no, never. Their reactions to my question ranged from quizzical to hopeful.

I think on my flight home today, I’ll simply slip the tip instead of asking the question, and see what happens.

Update: I tried, and failed. “A flight attendant is not a waitress,” I was told—so forcefully that I felt terrible for even trying to put money in the woman’s hands.

The Department of Transportation just
canceled its plan to auction off landing and takeoff slots
at New York City’s three airports. The idea was to use market forces to ease congestion, but in the face of industry backlash (and legal threats), transportation secretary Ray LaHood called off the auction.

“We’re still serious about tackling aviation congestion in the New York region,” LaHood says. “I’ll be talking with airline, airport, and consumer stakeholders, as well as elected officials, over the summer about the best ways to move forward.”

The three major airports serving New York—J.F.K., Newark-Liberty, and LaGuardia—are
famously high-ranked
when it comes to congestion and delays. And since so many flights elsewhere connect through New York, their delays affect air traffic everywhere.

During a recent ground delay at LaGuardia, I got to talking with an off-duty pilot for a major airline who was extraordinarily knowledgeable about every single airline question I could think to ask him. When I asked for his take on New York air congestion, he said the solution was easy: shut down LaGuardia.

The problem, as he explained it, is that the airspace for each of the three airports extends cylindrically into the sky
above its ground position. Because of their relative proximity, the three airspace cylinders affect one another significantly, which creates congestion not just because of volume but because pilots have to thread the needle and fly unnecessarily intricate approach routes in order to comply.

If the LaGuardia cylinder were eliminated, he said, Newark and J.F.K. would both operate much more freely—and since LaGuardia handles far less traffic than the other two airports, it is the obvious choice for shuttering.

But there’s a problem: LaGuardia is the favored airport of the people with the most political power in New York, since it is a very short ride from Manhattan. So it’s unlikely to happen, at least anytime soon. But if it did, my new pilot friend insisted, New York air travel would move from nightmare to dream.

I have to admit that LaGuardia is my favorite airport, since I live in Manhattan and can usually get there in about fifteen minutes. On every other dimension, meanwhile, it is less pleasant and comfortable than either Newark or J.F.K.

That said, if eliminating LaGuardia had the cascading effect of streamlining all New York air traffic, I would personally help start knocking it down. Let’s say that I, and every other New York traveler, spend an average of thirty wasted minutes on every inbound and outbound flight in any of the three airports. (That’s probably being generous.) That’s a one-hour delay for each round trip. If I had to go to Newark or J.F.K. for every flight, I’d spend a little bit less than an extra
hour on a round-trip ground commute to the airport—so with no delays, I’d at least be breaking even. Everyone who lived closer to either airport would obviously do even better. And then we’d get to start adding up all the time and productivity regained around the country by eliminating the inevitable New York airport delays.

A l
ong report in
Time
magazine
carries the headline “Restoring the Draft: No Panacea.”

Milton Friedman must be turning over his grave at the mere suggestion of a military draft. If the problem is that not enough young people are volunteering to fight in Iraq, there are two reasonable solutions: 1) take the troops out of Iraq; or 2) compensate soldiers well enough that they are willing to enlist.

The idea that a draft presents a reasonable solution is completely backward. First, it puts the “wrong” people in the military—people who are either uninterested in a military life, not well equipped for one, or who put a very high value on doing something else. From an economic perspective, those are all decent reasons for not wanting to be in the military. (I understand that there are other perspectives—for
example, a sense of debt or duty to one’s country—but if a person feels that way, it will be factored into his or her interest in military life.)

One thing markets are good at is allocating people to tasks. They accomplish this through wages. As such, we should pay U.S. soldiers a fair wage to compensate them for the risks they take! A draft is essentially a large, very concentrated tax on those who are drafted. Economic theory tells us that is an extremely inefficient way to accomplish our goal.

Critics might argue that sending economically disadvantaged kids to die in Iraq is inherently unfair. While I wouldn’t disagree that it’s unfair that some people are born rich and others poor, given that income disparity exists in this country, you’d have to possess a low opinion of the decision-making ability of military enlistees to say that a draft makes more sense than a volunteer army. Given the options they face, the men and women joining the military are choosing that option over the others available to them. A draft may make sense as an attempt to reduce inequality; but in a world filled with inequality, letting people choose their own paths is better than dictating one for them. As a perfect example of this, the Army is currently offering
$20,000 “quick ship” bonuses
to those who are willing to ship out to basic training within thirty days of signing up. (This bonus likely has something to do with the fact that the Army
just hit its monthly recruiting goal
for the first time in a while.)