Cafe Hayek

The imperfect market for passports

Plenty of fodder here (HT: Doug Ransom) for an Econ 101 class discussion or exam. Because of a new requirement that Canadians visiting the US need a passport, there's been an increase in demand to get a passport and the Canadian bureaucracy hasn't responded as briskly as they might. The result is excess demand for a passport on short notice and that means price gets paid in other

Pat has a layer of cardboard beneath him, a wool blanket on top of him, two paperbacks found in a dumpster in his hand and the promise of $80 when he wakes up.

     “I’m a lucky guy,” the 40-year-old homeless man said, from one of the most coveted spots in town these days.

Pat was first in line at the Fort Street passport office lineup yesterday. He claimed his spot at 1 p.m. the afternoon before, and slept out on the sidewalk with about 15 other homeless people who have put themselves to work holding space in line for those a little more fortunate.

“I’m taking advantage of an opening in the marketplace,” Pat said. “Capitalism is what our whole society is based on. It’s the foundation of what we are and what we’ve become.”

If people don’t want to wait the hours in line that it’s taking to get passports processed, Pat and others are willing to sleep on the street — as many of them would be anyway — and get paid for it.

One of the nice lessons here is that even though the homeless are willing to sleep on the street for nothing, the market is rewarding them. I'll leave as a homework question (use the comments if you'd like) why the market works this way. Another lesson comes from Pat's analysis:

"I’m taking advantage of an opening in the marketplace,” Pat said. “Capitalism is what our whole society is based on..."

The first sentence is true. The second? Let's just say the decision of how many clerks to put int he passport office isn't exactly capitalism in action.

Breast milk for lodging

Boing Boing reports on this Craig's List opportunity:

We are offering a free room for a woman who is willing to provide breast milk for consumption to the household. We are an otherwise vegan house but have recently read A.O. Wilson's study of the benefits of human breast milk to all human beings of any age. This is not sexual. Neither appearance nor sexual preference are of any concern to us.

We are willing to accept one child into the house as well. We do not want to take breast milk away from a nursing child however. We also don't need gallons of breast milk but whatever you can muster; it is a nutritional supplement for members of the house who want to partake.

I can't say it's my cup of tea. But if the appeal of breast milk catches on, it's only a matter of time before it goes commercial and you can buy it at your local grocer. There will an organic option, a vegan option, and an imported (but fair trade, of course) version. My suggested brand name is Mama Milk. When it hits the market, connoisseurs will complain that the stuff in the store isn't as good as what you used to get at the local farmer's market.

Surprisingly, the apartment is in Berkeley. Go figure.

Private Creation of Private Property Rights (Or, Curing the Boston Commons)

Editorialists at the Boston Globe are skeptical of the plan -- for rather vague reasons of "fairness" -- but here's a neat way that private, innovative entrepreneurship might cause scarce parking spaces in Boston to be used more efficiently.

Although the details differ enormously, this idea reminds me of Fred McChesney's article on parking spaces in snow-bound Chicago.  In both cases, as a valuable commodity (parking spaces) becomes more scarce, private efforts and coordination develop ways of creating private property rights in goods that otherwise would remain free-access goods.

Monsanto Saves Lives

Want to know one way that a multinational corporation and the profit motive combine to save the lives of many Africans?  You can find out here.

Lice Guys Finish First

Hayek made the essential point in The Fatal Conceit that family life and market life require us to be schizophrenic:

Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within the different kinds of orders according to different rules.  If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e. of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilisation), as our instincts and sentimental yearnings often make us wish to do, we would destroy it.  Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them.  So we must learn to live in two sorts of world at once.

We continue to blur those lines as this report from the San Francisco Chronicle makes clear:

These days, it's possible to outsource nearly every part of parenting  --  except maybe the hugs  --  as a burgeoning industry springs up in the Bay Area and major cities around the country to help busy, well-financed moms and dads who lack either the time or the self-confidence to do what past generations of parents did by themselves.

This new growth industry also includes potty trainers, party planners who specialize in the under-10 set and lice removal experts. Yes, Bay Area parents can even hire someone to come to their house and pick the nits out of their loved ones' locks.

Markets in Everything

Ogre slaying. (NYT: rr)

(ht to Marginal Revolution for the category)