No Fat Tax

By Russ Roberts

From the St. Louis Post Dispatch

I wish I weighed a little bit less. Or a lot less. And I often fear, to paraphrase Kingsley Amis, that I'm heading in the wrong direction, that inside of me is an even fatter me waiting to get out.

I'm not alone. A recent study found that 80% of the American people are overweight. Many of us seem to have trouble saying no to that second piece of pie, the super-sizing of fries and the longing to lay on the couch burning up as few calories as possible.

I have always thought of my weight as kind of personal. It often is. When I get my driver's license and the clerk ask my weight, I'm on the honor system. The clerk demands an eye test, but there's no scale. A confession—I take what I actually weigh and what I'd like to weigh and split the difference. So far, even the security people at the airport let me get away with this deception.

But like everything else these days, the personal is political. Some people say my weight problem is your problem and vice versa. Obesity is related to higher risks of heart disease, cancer, stroke, diabetes and lots of other unpleasant outcomes.

Take My Used Book, Please!

By Russ Roberts

From the Wall Street Journal

The Author's Guild is mad at Amazon—the online bookseller. Getting mad at the river might have been more productive.

It seems that Amazon is helping its customers sell—kids, cover your ears—used books. With increasing frequency, when shopping for a book at Amazon, you'll find that in addition to offering new copies at those phenomenally low prices, they might even offer a price if someone out there has decided to ditch their once-new copy for a little bit of cash.

This upsets the Author's Guild, which supposedly represents the interests of writers. The Guild thinks it awfully naughty of Amazon to encourage people to buy used books. After all, authors don't make royalties on used books. What in the world was Amazon thinking?

Next thing you know, the Guild will be picketing libraries. You sell a copy of your book to a library and they have the nerve to let more than one person read it. Can you imagine? If the book is really popular, maybe five, ten or even 100 people might read it. (The sound you hear is the author weeping softly as those 100 readers yield only a single royalty payment.)

What's an author to do? Authors have been known to get on the Amazon site and check their sales rank. Authors of America unite! The next time you check your sales rank and a used copy pops up as an option, buy it. When it arrives in the mail, bury it in the ground or burn it. Certainly don't let anyone read it. Then you can sleep easy knowing that the next person who searches for your book won't have a used copy to choose from.

When you're done at Amazon, get on www.bookfinder.com and find all the other used copies available on line. Buy those too. Burn em. Boy, are you going to be happy. Then get in your car and scour all the used book stores around the countryside. Buy any copies of your book that you find there. Next, it's off to the local libraries. I won't encourage you to steal books from the library. But you might want to misfile your book so readers can't find it. That way they'll all go and pay full price at Amazon.

There's only one problem with this strategy. It might actually result in fewer people reading your book. Most authors I know, including yours truly, write for all kind of reasons. Nobody writes to maximize the number of full price sales. In fact, most of us wish our publishers would charge lower prices so more people would read our books. We're not just interested in money. We're interested in truth and spreading it. We're interested in fame and glory. We actually want people to read our books and to hear our voice.

Most of us love Amazon because it helps people find out about our books and avoids the hideous distribution system which works fine for Clancy, King and Grisham but not so smoothly for the rest of us. And some of us are smart enough to realize that not every reader who hears about our book is willing to buy it, even at Amazon's discount prices.

I can't speak for all of my fellow authors, but I'm happy to see a used copy of one of my books for sale. (In fact, if you can find one at your local bookstore or on the Web, please help yourself.) I may be sad that someone wanted to part with the little gem, but I'm thrilled to know it might find a home where it may be loved and cherished, and perhaps even read.

In Praise of That Ugly Box On the Edge of Town

By Russ Roberts

From the St. Louis Post Dispatch

Wal-Mart has become the biggest corporation in the world, measured in annual sales. To some, Wal-Mart's success is the ultimate symbol of the hollowing out of the U.S. economy. We were once the workshop of the world. Now we're nothing but a service economy of minimum wage jobs.

When did the "hollowing-out" begin that so alarms the critics? It's hard to pin down a precise date, but manufacturing employment has fallen steadily while service employment has increased steadily since the end of World War II. In 1950, 34% of non-farm employment was in manufacturing. Today it's under 14%. What is left are those manufacturing jobs that are still best done in America-those that apply cutting-edge information technology to the manufacturing process. And those technologies inevitably require fewer people to do the work.

Yet the last half of the twentieth century transformed the standard of living in America. Maybe a large manufacturing sector is not the key to wealth. Maybe an economy can thrive by success in health care or education or telecommunications or computer software or even retailing. America has been doing it for 50 years.

But can we say anything even remotely nice about Wal-Mart? Surely, say the critics, those are the retail jobs we don't want. Goodbye, quaint general store on Main Street. Hello, ugly box on the edge of town.

Sam Walton had a lot of charm, but he couldn't force people to shop in his stores. People shop at Wal-Mart because they like the prices and the quality. When a Wal-Mart comes to town, everyone celebrates except the folks who run that store on Main Street. They will probably go out of business. But they will go out of business because consumers prefer shopping elsewhere.

Sam Walton had more than charm. He understood how to harness information systems and technology to reduce inventory costs. He also understood how to outsource—how to buy low-cost goods made all over the world. He passed the savings on to the customer.

Has it been a good deal for the customer, this world of lower prices and a less quaint Main Street? I'd leave that for the customer to decide. But even if you don't like the customer's preference for Wal-Mart, know that there are other benefits to Wal-Mart than cheap socks and underwear.

Those benefits are harder to see. But they are real. Because of Wal-Mart's relentless pursuit of profit through lower prices, consumers have more money left over to spend on other things. That means more music lessons for the kids, more evenings at romantic restaurants. Does that make up for the ugly box that ruins the view of the meadow and leaves a hole on Main Street? I can't judge that. I only know that the full effects of Wal-Mart are a little more life-enhancing than they appear at first glance.

Because of the efficiency of the retail sector and a slimmer but still successful manufacturing sector, we as a nation have more resources for both sublime and ridiculous ends-a health care revolution and better special effects at the movies. Gourmet coffee and drugs that prevent heart attacks. Viagra and Amazon. More of everything. More life. Literally. Today, life expectancy is more than eight years longer than it was in 1950.

What does Wal-Mart's success and the growth of retailing and other services have to do with living longer? Our increased life expectancy isn't a natural phenomenon. It's an economic phenomenon. It requires venture capital and investments in research and development. It requires better nutrition and knowledge about disease and how to cure it. It takes money. The wealth we have accumulated over the last fifty years has let us create better health care. It has let us have the resources to make our air and water cleaner. It has let us produce more of everything.

The critics said the shrinking of the manufacturing sector would hollow us out and make us poor. The critics called for subsidies and protectionism to preserve manufacturing jobs. Most of the time, the government didn't listen. And we have thrived as a result of that decision.

If we had decided back in 1950 to preserve the size of the manufacturing sector and choke off the move to the service sector, we would be dramatically poorer. We wouldn't have the resources or standard of living to fund all of the new industries and products that have changed our lives over the last half-century.

Not everyone has benefited from that transition. But for the overwhelming mass of Americans-black and white, rich and poor, young and old-life is much better today than it was 50 years ago. And some of that improvement is due to Wal-Mart. Wherever you are Sam, congratulations.