A blueberry conversation...

A late night discussion at a coffee shop in New York:

Jeremy: From my observations, sometimes it's better off not knowing, and other times there's no reason to be found.

Elizabeth: Everything has a reason.

Jeremy: Hmm. It's like these pies and cakes. At the end of every night, the cheesecake and the apple pie are always completely gone. The peach cobbler and the chocolate mousse cake are nearly finished... but there's always a whole blueberry pie left untouched.

Elizabeth: So what's wrong with the blueberry pie?

Jeremy: There's nothing wrong with the blueberry pie. Just... people make other choices. You can't blame the blueberry pie, just... no one wants it.

That was from Wong Kar Wai's "My Blueberry Nights," starring Jude Law as Jeremy, the cafe manager, and Norah Jones as Elizabeth. So yes, don't blame the blueberry pie. The market just don't clear, that's it...

The question is, "why do you keep serving it?" Lizzie asked Jeremy, at the end of the movie. "In case you come back..." answered Jeremy.

Rizal was right...

... we don't need an uberpolitician or a Satria Piningit. We need a system that works. And when the system doesn't work, we may need... The Batman! Of course, to make the system works, we need something like KPK, or someone like Harvey Dent (before he turned into Two-Face).

Just like I enjoyed the recent heroic actions performed by KPK, I enjoyed watching The Dark Knight. It's a good sequel to Batman Begins. So far, the two films by Chris Nolan are better than the previous Burton-Schumacher series. And sorry, Superman and Spiderman, but if there is a 'Superhero Oscar' then I'd give the award to your fellow in that black suit.

But the highest credit must go to Heath Ledger. His last ever performance as The Joker really stole the show. May he rest in peace. Some people consider his acting was better than Jack Nicholson, who played the character in the Burton's 1989 version. I'd say, they both are tied. The difference being Nicholson was excelling alone in a somewhat weaker script, while almost everyone in The Dark Knight played well, especially Gary Oldman. He's really a brilliant actor, isn't he? Everytime he plays a character -- from Dracula, Lee Harvey Oswald, Sirius Black, and now the uncorruptible Lt. Gordon, seems that he's turning into completely different persons.

The moral of the movie was simple: institutions matter. When formal institutions fail, informal institutions will rule (see Dani Rodrik's post on how Taliban solves property rights issues when the state failed to impose it). Then we end up in a 'bad' equilbrium: we need another informal institutions to solve the problems created. Things got more harder if we have someone like The Joker, who does crime just for the sake of doing it; whose means is also the objectives.

There were also two good quotes from the movie. First, "Helping means choosing," told The Joker. He was clearly an economists, because he understands the concept of choice and opportunity costs.

Second, "The best way to decide is chance. Chance has no moral or prejudice. Everyone gets a 50-50 probability," told Two-Face. No, he didn't refer to randomized trials when saying this. But I think sometimes it's a good idea to apply the method to evaluate the impact of a policy. Or not?

Note: Chris Nolan made some changes from the original Batman stories: how Harvey Dent turned Two-Face, and the introduction of Rachel Dawes' character that has never appeared in any movies or comic versions (hence the Wayne-Dawes-Dent love triangle). I don't know how the hardcore fans think about this deviation, but I don't have any problem with that. I also don't know why Katie Holmes no longer features as Dawes, but I like Maggie Glleynhaal better.

Ec and the City

My wife and I finally watched the return these New York fab four. Yes, we are a fan of the TV series, so we've been anticipating the big screen version for quite a while. I thought the movie was a pretty good entertainment, and some reviews might be too harsh. I agree with Leila Chudori that the movie was lacking the series' twist and naughty plot. But, in the end, the movie is a 2-hour annex to the series. Not a repetition of the episodes when they were still at their 30s. So, please, it's not The Godfather or Little Women; it has the right to remain cheesy!

The plot revolves around Carrie and Big's relationship. How they decided to get married, then one of them got too obsessed and the other got scared, and how they got through with that. I tried to enjoy the movie by not thinking any economic theories. But still I couldn't help thinking of Becker's 'Economics of Marriage.' You can read Becker's account in his Nobel lecture here; a good summary of his theory (and how the theory evolved between the first JPE article in 1973 and his latter works, especially the 1981 Treatise) here; or in Tim Hartford's popular version here. But note that those pieces look at why do people decide to get married (and how do they choose partners) as opposed to being single. In Carrie and Big's case, the issue is why they want to move to one stable equilibrium (extra-marital cohabitation) to another one (marriage).

One of the movie's subplots is the troubled marriage of Miranda and Steve. The question is, when you have to decide whether you want to keep your marriage or terminate it, do you apply a cost-benefit type of calculation? Maybe. But, in the spirit of the movie, maybe not. It's harder to lose something you've actually had, even though you could 'trade' it with something you'd prefer to have in a counterfactual life. Economists call it the endowment effect, which may suggest, as this article argued, humans are irrational animals.

Or, in Carrie's words to Miranda, "Sorry, Harvard.. this time you need to make decision based on your emotions... not logic..." Ah, I think I'm too carried away with the movie.

My current dæmon is 0.8(F+B+S)+0.2K -- what's yours?

Has anybody seen The Golden Compass or read His Dark Materials? I have just seen the movie. I like it: it got me thinking. What would be my dæmon if it ever existed? Is is settled already like the dæmons of adults, Miss Coulter's or Lord Asriel's? Or is it still changing like that of Lyra Belacqua's, the kid? I'm not sure if mine is still trying to find its final form. But I guess I would love it if my current dæmon is some sort of a creature made of eighty percent of Friedman, Becker, and Stigler combined and twenty percent of Keynes. That is, 0.8(F+B+S)+0.2K. I'm not sure how it looks like (I sure hope it's not ugly like Coulter's golden monkey).

How about yours?

The Last King of Africa

In a lunch interview with FT in Central London, this is rock star economist Jeff Sachs' take on Africa and policy replicability:

We move on to talk about a specific project Sachs is currently involved in, Millennium Villages, where his ideas on fertilisers, malarial bed-nets and the like are tried on the ground. My less- than-ecstatic reaction to his reports of their success is clearly the same as that of many aid agencies. It instantly raises his hackles. I suggest there are many examples where success in pilots does not translate into something that can be replicated on a large scale, and that you don't necessarily need to try something to know it won't work. "I'm sorry," he is almost shouting now. "That, I disagree with completely. That's preposterous."

I realise I have exaggerated for effect, and counter that it is equally preposterous to insist they will work. "I know," he says, "but how do you actually do something in life? Do you list all the things that may go wrong and then decide we won't do it, or do you actually try?"

Then I remember a thrilling scene of The Last King of Scotland. Oscar winner Forest Whitaker playing Idi Amin scolded his Scottish private physician, Nicholas Harrigan, in his masterful African accent:

Africa is not a game. It is real

Cool, eh?

(Film) Industrial Policy, the UK Way

So the Hollywood dominates the world film market. British film is declining. What should Britons do? The standard economics would be letting the competition goes on. Let lousy films with funny accent perish, if they can't cope with the market force.

Probably the Britons can no longer stand losing their cultural supremacy against their ex-colony. As Prime Minister Hugh Grant¹ once said:

We may be a small country but we're a great one, too. The country of Shakespeare, Churchill, the Beatles, Sean Connery, Harry Potter. David Beckham's right foot. David Beckham's left foot, come to that.

And his Chancellor of the Exchequer (a.k.a: Minister of Finance in case you are not familiar with this term) Gordon Brown --no, he's the real Tony Blair's Chancellor—announced in September, 2004:

I shall hereby declare that small budget films entitled tax relief 20 percent of production cost, and 16 percent for films costing more than £20m.²

And the result, as claimed by UK Film Council, is --for the money spent for film-making:

Statistics from the UK Film Council reveal that £840m was spent last year, up by 48% from the £569m spent in 2005. Studios are also coming to Britain in greater numbers - inward investment increased by 83% to £570m.³

Yeah, right. So much for the free market idea.

Now move to Indonesia. We want to have strong film industry, producing not only money-making but also good quality films. The ala UK tax break proposal seems attractive. But how can we be sure that taxpayers money going to the film makers, instead of building the schools or rice subsidy to the poor, would produce the industry boom like in UK –and, I would like to add, not the likes of crappy local films we often find in cinema nowadays? If we insist for the plan, we’d be better sure that, first, the economic benefit (multiplier effect on income and employment) coming from the plan exceeds the cost for tax break (or subsidy). Second, the produced films are competitive vis-à-vis Hollywood ones, which usually come from the quality of the product. And third, the mechanism to prevent discrimination in selecting the recipient is in place and well enforced.

A tall order indeed.

---
¹ In Love Actually.
² Well, not precisely, but see official guidance for UK film makers on tax-relief.
³ From The Guardian

film | industrial policy

Manager's Top Movies

I remember, when we started up the Café somebody (don't remember who exactly) suggested not to have any posting on lists -- you know, that thing people like to have in their blogs: list of favorite movies, books, etc. But I'm gonna break it, cause it seems fun. Here's my "top" movies list, in alphabetical order (I have set up my own stupid rule: at most one movie per letter allowed).

Annie Hall (1977), Being John Malkovich (1999), Clockwork Orange - A (1971), Dreamers - The (2003), Erin Brockovich (2000), Farewell My Concubine (1993), Groundhog Day (1993), Happy Together (1997), Jaws (1975), Kikujiro (2000), Life is Beautiful (1997), Maléna (2000), North by Northwest (1959), Philadelphia (1993), Rosencrantzs & Guildenstern are Dead (1990), Strictly Ballroom (1992), To Catch A Thief (1955), Usual Suspects - The (1995), Vertigo (1958), What's Eating Gilbert Grape (1993), Y Tu Mama Tambien (2001).

Movies

Prof. X needn’t have to die, not that way...

Charles Xavier is disappointing. So are Magneto, Wolverine, Storm, and all those fighting each other in the X-Men: The Last Stand. The problem is, both sides – X-Men and Magneto’s Men are forcing what they want on others. This is against human (I bet mutant, too) nature.

Here’s a simple solution to the problem in The Last Stand:

Worthington Industries should be allowed to develop any medical technology (if it thinks it is profitable), including the cure to treat genetic mutation . What the government can do is just to make sure that the medicine has all the information for the consumers. For example: “This medicine is to convert any mutant into human. It is not reversible. Take it at your own risk”. What the government should not do is to force mutants to become human. What X-Men (and all other mutants for that matter) can do is not to take the cure if they are happy with what they are now (like Angel), or take it if they are not (like Rogue).

I know for sure, my solution wouldn’t make a good movie.

X-Men | Free Choice