Export controls are hard to enforce

The Boston Globe reports on the export to Iran of an oil exploration tool developed at Schlumberger's labs near MIT: Oil firm sidesteps sanctions on Iran. American law prohibits Americans or American based firms from exporting such equipment, but a multi-national firm incorporated outside of the U.S. can manage to do so if it is careful. It appears that, while oil-field technology isn't as fungible as oil itself, it is difficult to control its international movement with national laws.

"Since 1995, federal regulations have barred Americans from exporting goods, technology, or services to Iran, and also prohibited non-Americans from directly exporting US-made equipment there."

"Citing concerns that Iran was using its oil revenues to fund terrorism and to finance a nuclear weapon, Clinton issued an order in March of 1995 that prohibited any US citizen or company operating on US soil from assisting Iran's oil industry. At the time, many policymakers believed that the United States had a monopoly on cutting-edge oil technology, and that the sanctions would prevent Iran from developing its oil fields"
...
"Minette, who had developed the similar tool for a Schlumberger rival and who now owns his own consulting company, said he, too, was not surprised that Schlumberger has brought the device to Iran.
"These folks have got lots of lawyers," he said.
Even if Congress were to find a way to close the loophole in the sanctions law, he said, Schlumberger could simply shift the manufacturing of the tool to its production centers overseas, beyond the reach of US laws. And, indeed, Schlumberger already has shifted some of its oil-service manufacturing to a production center in France, where US sanctions do not apply.
"Would it be possible to stop Iran from getting that particular tool?" Minette pondered. "If the world wanted to, yes, but the world doesn't want to. The United States does not have control.""

Illegal markets: Dogfighting

Dogfighting Subculture, Illegal and Secretive, Is Taking Hold in Texas

Not only is dogfighting itself a felony in Texas, many of the participants seem to be involved in other kinds of crime. Running an illegal competition among criminal participants presents some special problems:

"After the weigh-in, the owners washed each others’ dogs in water, baking soda, warm milk and vinegar to make sure their coats were not poisoned."

New Zealand traffic rules

Traffic rules are designed to avoid coordination failures. In much of the world, driving is on the right. New Zealand is one of the island nations in which driving is on the left, the next most popular choice. Uniquely, they have a rule that says drivers taking left turns (which, remember is the turn that doesn't cross traffic) must yield to drivers taking right turns. (Here's a site with a picture. If we had this rule in the U.S. it would mean drivers taking a right must yield to those taking a left.) Apparently this is an inferior coordination rule. On the one hand, a driver planning to take a right turn (across traffic) might appear to be planning not to turn. On the other, a driver planning a right turn who has precedence over a driver taking a left must still yield to a driver going straight, and so errors in signaling in either direction are a problem. So from time to time New Zealanders debate changing the rule: Quirky intersection rule set to face review - again

"AA motoring affairs manager Mike Noon said New Zealand's version was "most probably the most confusing and poorly understood rule that we have".
Although it was designed to reduce the risk of rear-end collisions for vehicles waiting to turn right, he believed that was outweighed by the hazards of side or head-on crashes.
One major hazard was when a vehicle swung right into the path of an opposing driver who might have inadvertently signalled a left-hand turn, but was continuing straight ahead."

Of course, switching from one equilibrium to another (even if superior) presents coordination problems of its own. Maybe September 3 should be Coordination Day, in memory of the day in 1967 when Sweden switched from driving on the left to driving on the right.

Auctions as tourist attractions

If you never visited the Tokyo morning fish auctions, it may be too late: Tourists banned from famous Tokyo tuna auctions at world's biggest fish market


"Today, Tokyo Metropolitan Government announced a ban on tourists attending the tuna auction, initially for the festive period from December 15 for a month, with a view to extending it in the New Year.
Guards will be deployed at the entrance of the tuna auction inside the market in order to enforce the ban, while hotels, embassies and travel agencies will also be informed in a bid to deter visitors from trying to gain entry.
"We have decided on a total ban as visitors are taking pictures with flash and touching tuna, which gets in the way of bidding," said Akiko Ueyama, a spokeswoman for the Tokyo Metropolitan Government."

Fortunately you can still visit the Dutch flower auction in Aalsmeer.

Assisted suicide and monarchy

I have blogged before about assisted suicide as a repugnant transaction that (along with some others) is undergoing changes in perception in some places. The latest news is from Luxembourg: Grand Duke Henri of Luxembourg opposes euthanasia and loses power

"Grand Duke Henri of Luxembourg is to be stripped of his executive power to veto laws passed by parliament after threatening to block a Bill to allow euthanasia in the tiny state.
The hereditary sovereign, 53, who is the last Grand Duke in the world, caused a constitutional crisis when he gave notice that he objected to Luxembourg following its neighbours Belgium and the Netherlands in permitting euthanasia before a second-reading vote in the Chamber of Deputies next week.
Jean-Claude Juncker, the Prime Minister, also opposed the Bill but decided that the Grand Duke had overstepped the mark in threatening to deny the will of parliament. "

Medical residents

The Institute of Medicine has issued a report on the training of new doctors: Expert Panel Seeks Changes in Training of Medical Residents (the link is to the NY Times story, the report is at
Resident Duty Hours: Enhancing Sleep, Supervision, and Safety)

The medical residency is the first step on a medical career, and is shaped by competing forces: the desire of the medical profession to limit new entry, the training needs of new docs, and the needs of patients. The latest report focuses on the latter by suggesting that residents should have some scheduled sleep time...

"...the worry is that the huge workload imposed on residents poses a risk to patient safety. The long hours of often unsupervised residents were found to have contributed to the 1984 death of 18-year-old Libby Zion in New York City, a finding that eventually led to a series of changes, including limiting residents to an 80-hour workweek and 30-hour shifts.
But the expert panel said those reforms were not enough. Caps on work hours are often not enforced, and many residents still do not get enough sleep, putting doctors and patients at risk for fatigue-related mistakes. While the new recommendations do not reduce overall working hours for residents, the report says no resident should work longer than a 16-hour shift, which should be followed by a mandatory five-hour nap period.
The committee also called for better supervision of the doctors-in-training; prohibitions against moonlighting, or working extra jobs; mandatory days off each month; and assigning chores like drawing blood to other hospital workers so residents have more time for patient care."

Elder care: household production

Jane Gross at the NY Times blogs on a recent AARP report, which points out that eldercare is mostly provided by families: Love’s Labor. (There's a reason why families are our most ancient unit of production.)

The report, Valuing the Invaluable: The Economic Value of Family Caregiving, 2008 Update, by Ari Houser and Mary Jo Gibson begins by noting that
"In 2007, about 34 million family caregivers provided care at any given point in time, and about 52 million provided care at some time during the year. The estimated economic value of their unpaid contributions was approximately $375 billion in 2007, up from an estimated $350 billion in 2006."
...
"The economic value of caregiving exceeded total Medicaid long-term care (LTC) spending in all states, and was more than three times as high in 36 states. Compared with Medicaid home- and community-based service spending, the economic value of family caregiving was at least three times as high in all states, and more than 10 times as high in 19 states."

Pirate ransom: counterparty risk

Arranging to deliver the ransom for the Ukranian ship captured by Somali pirates, and to receive the ship and hostage crew in return is a delicate matter without a legal framework to reduce the counterparty risk (sort of like a drug buy): Mediator Says Ransom Deal Has Been Reached for Pirated Ukrainian Freighter

"Andrew Mwangura, who as head of a Kenyan maritime association has helped mediate the situation, said Sunday that the Somali pirates who captured the freighter more than two months ago and the ship’s owners had agreed on a ransom. He would not reveal the figure, but he said that the only thing left was to figure out how to get the money to the pirates and hand over the ship.
Still, that is no simple feat, given the band of jumpy pirates on board and the half-dozen American and European naval vessels circling the freighter."

The related story in the Telegraph notes that
"The US military has overflown the hijacked vessel several times to take pictures of the crew lined up on the bridge and verify that all were in good health. "

Signaling on the Economics Job Market

The signaling mechanism run by the American Economic Association closes on Monday at midnight (but signalers must register by Sunday). Economists may use it to send up to two signals of interest to potential employers. The mechanism is described here, together with some advice for candidates and departments.

My advice to candidates: read the advice, talk to your advisor, think about where to send your signals, but don't stress out about it; signals are just one small factor in your overall campaign. Good luck to all.

The changing market for surrogate wombs

Here is a longish set of excerpts from a very interesing NY Times Magazine story about surrogacy: Her Body, My Baby . It touches on a number of issues that also come up in discussions of organ transplantation, and the controversy about compensation for donors.

"Before I.V.F. became a standard fertility treatment, about 15 years ago, the only surrogacy option available to infertile couples who wanted some genetic connection to their child was what is now called traditional surrogacy. That is when the woman carrying the baby is also the biological mother; the resulting child is created from her egg and sperm from the donor father. When the surrogate mother is carrying a child genetically unrelated to her, she is gestating the child, and the process is called gestational surrogacy. Now that there are hundreds, if not thousands, of doctors in the United States who can perform I.V.F., surrogacy agencies report that the numbers have shifted markedly away from traditional surrogacies toward gestational surrogacies.
There are no national statistics documenting this shift, however, or documenting much of anything about surrogacy. Shirley Zager, director of the Organization of Parents Through Surrogacy, a national support group, told me that there have probably been about 28,000 surrogate births since 1976, a figure that includes gestational and traditional surrogacies. Sherrie Smith, the program administrator for the East Coast office of the Center for Surrogate Parenting, a surrogacy and egg-donation agency, said that of the 1,355 babies born in their program since 1980, 226 were created through artificial insemination — traditional surrogacies — and the rest were gestational surrogacies, using either a donor egg or the intended mother’s own egg."
...
"Surrogacy is unregulated, and laws vary by state. In the states where it is legal, there is no box on the birth certificate to check “surrogate birth.” In many states that don’t expressly prohibit surrogacy — like Pennsylvania, where our child was eventually born — the genetic parents’ names could be the only ones that appear on the birth certificate. If, however, our baby had been born in New York, where we live and where it is illegal to compensate someone for surrogacy, we would have had to adopt our biological child from Cathy, the woman who carried our child, and her husband. But our contracts were signed in New Jersey, and the consent form that Dr. Fateh had Cathy sign skirted any remaining legal issues."
...
Of the potential surrogate moms:
"None were living in poverty. Lawyers and surrogacy advocates will tell you that they don’t accept poor women as surrogates for a number of reasons. Shirley Zager told me that the arrangement might feel coercive for someone living in real poverty. Poor women, she also told me, are less likely to be in stable relationships, in good health and of appropriate weight. Surrogates are often required to have their own health insurance, which usually means the surrogate or her spouse is employed in the kind of secure job that provides such a benefit.
While no one volunteering to have our baby was poor, neither were they rich. The $25,000 we would pay would make a significant difference in their lives. Still, in our experience with the surrogacy industry, no one lingered on the topic of money. We encountered the wink-nod rule: Surrogates would never say they were motivated to carry a child for another couple just for money; they were all motivated by altruism. This gentle hypocrisy allows surrogacy to take place. Without it, both sides would have to acknowledge the deep cultural revulsion against attaching a dollar figure to the creation of a human life.
In fact, charges of baby selling have long tarnished the practice of traditional surrogacy, and charges of exploiting women have lingered even as more couples opt for gestational surrogacy. We were not disturbed by the commercial aspect of surrogacy. A woman going through the risks of labor for another family clearly deserves to be paid. To me, imagining someone pregnant with the embryo produced by my egg and my husband’s sperm felt more similar to organ donation, or I guess more accurately, organ rental. That was something I could live with. "
...
"THE PREVIOUS WINTER, a Catholic priest, upon hearing of our impending birth and my plans to raise the boy in the same liberal Catholic tradition in which I was raised, sniffed and said to me, “You know, the church frowns on science babies.” "

Market for wind, and information

A Land Rush in Wyoming Spurred by Wind Power
"The man who came to Elsie Bacon’s ranch house door in July asked the 71-year-old widow to grant access to a right of way across the dry hills and short grasses of her land here. Ms. Bacon remembered his insistence on a quick, secret deal (emphasis added). ...
"Ms. Bacon did not agree to the deal from the Little Rose representative, Ed Ahlstrand Jr. Instead, she joined her neighbors in forming the Bordeaux Wind Energy Association — among the new cooperative associations whose members, in a departure from the local culture of privacy and self-reliance, are pooling their wind-rich land.
This allows them to bargain collectively for a better price and ensures that as few as possible succumb to high-pressure tactics or accept low offers. Ranchers share information about the potential value of their wind."

"The financial arrangements of each association are unique, but in the case of the Slater Wind Energy Association, 55 percent of the total annual royalties is to be distributed among the landowners who have turbines on their properties. The rest is to be distributed among all association members, both those with turbines and those without. "

Market for recorded music

Digital Sales Surpass CDs at Atlantic
"Atlantic, a unit of Warner Music Group, says it has reached a milestone that no other major record label has hit: more than half of its music sales in the United States are now from digital products, like downloads on iTunes and ring tones for cellphones. "

"At the Warner Music Group, Atlantic’s parent company, digital represented 27 percent of its American recorded-music revenue during the fourth quarter. (Warner does not break out financial data for its labels, but Atlantic said that digital sales accounted for about 51 percent of its revenue.)
With the milestone comes a sobering reality already familiar to newspapers and television producers. While digital delivery is becoming a bigger slice of the pie, the overall pie is shrinking fast. Analysts at Forrester Research estimate that music sales in the United States will decline to $9.2 billion in 2013, from $10.1 billion this year. That compares with $14.6 billion in 1999, according to the Recording Industry Association of America.
As a result, the hope that digital revenue will eventually compensate for declining sales of CDs — and usher in overall growth — have largely been dashed....
Instead, the music industry is now hoping to find growth from a variety of other revenue streams it has not always had access to, like concert ticket sales and merchandise from artist tours. “The real question,” Mr. Rose said, “is how does the record industry change its rights structure so it captures a fairer percent of the value it creates in funding, marketing and managing the launch of artists?” "

In related news, a Boston judge has thrown out a suit by the RIAA (Recording Industry Association of America) against Boston U., seeking to subpoena IP addresses at which illegal downloads may have been made, on the grounds that
"The University has adequately demonstrated that it is not able to identify the alleged infringers with a reasonable degree of technical certainty. As a result, the Court finds that compliance with the subpoena as to the IP addresses represented by these Defendants would expose innocent parties to intrusive discovery."

Marriage market

In an effort to make sure the marriage market is two-sided, British Law Aims at Preventing Forced Marriage

"A British law went into effect Tuesday that allows courts to prevent someone from being forced into marriage -- a move that comes as governments across Europe confront immigrant practices that sometimes clash with more liberal values...
"It is not a crime in Britain to force someone into marriage. But the practice often includes offenses such as abuse, assault, rape and kidnapping...
"Under Islamic law, consent is required for marriage, but forced unions do occur, especially in the more conservative and traditional countries of the Middle East."

The Big Donor Show wins an Emmy

A hoax Dutch television show in which three desperately ill contestants vied with each other to be given a donor kidney has won an Emmy in New York.

Before (and after) the hoax was revealed, the show sparked a good deal of discussion of organ donation rules in the Netherlands.

HT Ivo Welch

Inter-caste marriage in India

Old repugnancies die hard:
Indian Government Supports Mixed Unions, But Couples Who Defy System Face Violence

"Even though India legalized inter-caste marriage more than 50 years ago, newlyweds are still threatened by violence, most often from their families. As more young urban and small-town Indians start to rebel and choose mates outside of arranged marriages and caste commandments, killings of inter-caste couples have increased, according to a recent study by the All India Democratic Women's Association. "
...
"As part of a controversial incentive for inter-caste couples to marry, the government recently began offering $1,000 bonuses. That's nearly a year's salary for the vast majority of Indians. Smaller cash payments first started in 2006 after a Supreme Court ruling in which judges described several high-profile honor killings as acts of "barbarism" and labeled the caste system "a curse on the nation." "

Early decision and early action college admission

The Times updates us on the thriving state of binding early decision, single choice early action, and early action in this year's college admissions: Early-Decision Applications Are Up at Colleges, in Spite of the Economy

Market for major league baseball players: international trade

The NY Times reports: Japanese Irked at U.S. Interest in Pitching Phenom

"Many Japanese baseball officials are outraged that United States teams are courting Tazawa, a hard-throwing right-handed pitcher, because they insist it is long-established practice for amateurs like him to be strictly off limits to major league clubs..."
"“This was more than just a gentleman’s agreement, but rather an implicit understanding that the major leagues would do no such thing,” Nippon Professional Baseball said in a news release on signing Japanese baseball amateurs. “That a handful of clubs from the majors is trying to break this gentlemen’s agreement is truly regrettable.”
..."The protocol agreement between Major League Baseball and Nippon Professional Baseball does not address the signing of either nation’s amateur players. It does formalize how Japanese veterans may switch continents: on the open market after nine seasons in the Japan major leagues, or earlier if a player’s club chooses to auction off his rights through a procedure commonly known as posting. Established in 1998, posting established stars like Daisuke Matsuzaka has generated as much as $51 million for their Japanese clubs, and losing top amateurs could hurt that pipeline."
..."The Yomiuri official Hidetoshi Kiyotake has said he fears for the viability of the entire Japanese majors should the major leagues descend on his nation’s amateur talent. In a recent issue of the Japanese magazine Weekly Baseball, he wrote that South Korea’s major league has been seriously harmed by 38 amateur players signing directly with major league clubs since 1994.
..."Fearful that Tazawa’s signing such a contract would encourage more Japanese amateurs to follow him, Nippon Professional Baseball recently passed a rule that requires any amateur who jumps to a major league team to sit out two or three years before being able to return to play in Japan."

Europe's first auction of carbon emissions permits

The London Times reports controversy about how the auction revenue should be spent:
Protests as carbon permits auction raises £54m
The Government has provoked anger by saying proceeds of sale will not necessarily be used to tackle climate change issues

"Yesterday's auction marked a departure from the policy of handing out the permits to industry for free."
...
"Campaigners said that the Treasury's decision to put the proceeds into its coffers rather than ringfencing them for use in environmental projects plays into the hands of critics, who fear that the ETS will be treated as little more than a green tax. "

I gather "ringfenced" is an antonym of "fungible."

Market for kidneys: Singapore

The Straits Times reports on proposed new kidney legislation in Singapore.

The new legislation would raise penalties for third party brokers, allow compensation for donors (from a single payer, state fund I think), and allow kidney exchange.

"ORGAN trading syndicates and middlemen will be punished more severely if the proposed changes to the Human Organ Transplant Act (Hota) are approved by Parliament.
They will be fined up to $100,000 or jailed up to 10 years or both - 10 times the current penalties.
In Singapore's first-ever organ trading conviction in September this year, Wang Chin Sing, 44, who was fingered as the middleman was jailed a year and two months. "
...
"Two other changes include removing the age limit for cadaveric donation, now set at 60 years, and allowing paired donations. This is where a donor, whose kidney is not a match for a relative, gives it to someone else who also has a relative willing to give up a kidney [kidney exchange]. "

"Earlier this month, an 18-member national committee on medical ethics had supported reimbursing donors so long as the sum is not so large as to become 'an undue inducement, nor amounting to organ trading'.
The draft Bill spells out measures to protect donors' welfare. These include providing them with long-term follow-up care and short-term life insurance coverage for risks linked to surgery. They will also get priority for receiving an organ in case of any organ failure.
On the issue of compensation, it says that this should be for expenses incurred as a result of the donation, and indirect losses such as lost earnings.
Reactions to the proposed changes have been mixed. Religious bodies like the National Council of Churches of Singapore support 'the provision of reasonable compensation' that helps donors allay fears of incurring high medical costs before, during and after the donation.
'These compensations should not provide incentives for donors out to make a financial gain from their donation,' said the council which represents 193 churches and Christian organisations.
Dr Lam Pin Min, deputy chairman of the Government Parliamentary Committee for Health, said that while changes to the upper age limit and allowing paired matching are 'straightforward and non-controversial', he felt the amendment to allow reimbursement remains contentious for several reasons.
'How are we going to determine what is a fair amount to compensate donors and how do we draw a clear line between compensation and inducement?' he asked.
A spokesman for the ministry told The Straits Times that a committee comprising medical professionals and lay persons will be formed once the amended law is passed 'to look into what is considered fair value in terms of compensation and what should or should not be reimbursed'.
Mr Khaw had hinted at a five- or six-figure sum. "

HT to Marginal Revolution, who focus on the latter.

Market for sex workers, and human trafficking

The AP reports UK Government Unveils Plan for Sex Trade Crackdown, which has drawn some nuanced reactions from sex workers and others.

"The British government announced plans Wednesday to make it illegal to pay for sex with women forced into prostitution and to name men who solicit sex on the streets -- measures that prostitutes say will put more women at risk.
As part of the Home Office's ''name and shame'' campaign, people who pay for sex with a prostitute ''controlled for another person's gain'' could face criminal charges and a fine of 1,000 pounds ($1,500).
The crime would be a ''strict liability offense,'' which means men would be held accountable even if they didn't know a woman had been trafficked or was working for a pimp, according to the Home Office."
...
"Sex trade workers, however, said the wording of the proposed law would make it illegal for men to use prostitutes who work for other women at brothels or in other voluntary arrangements.
''This is a very dangerous moral crusade,'' Cari Mitchell, spokeswoman for the English Collective of Prostitutes, said Wednesday. ''What this will ultimately do is drive the sex trade further underground and put the focus on criminalizing clients that, for the most part, women aren't complaining about. This plan is of no benefit to women.'' "
...
"[Home Secretary] Smith said there was no public support for a ''wholesale ban'' on paying for sex and the measures were aimed at cutting down on exploitation."
...
"Under current laws in England and Wales, it is illegal to loiter and sell sex on the streets or elsewhere in public. Keeping a brothel is unlawful, but a lone woman selling sex inside is not. Similarly, paying for sex is legal. But solicitation has largely been tolerated."