Baptist and the Bootlegger

Marc Andreessen was a guest on the Lex Fridman podcast a few months ago. Among the many interesting topics they discussed was a conversation about the Baptist and Bootlegger theory. In short, this theory illustrates how disparate groups may unexpectedly align to support and/or lobby for the same regulations or policies. The most classic example is how the Baptists and Bootleggers aligned in their interests of banning alcohol during the Prohibition era. The Baptists for moral reason and Bootleggers to increase their alcohol sales.

Recently, Sam Altman appeared in front of congress begging for regulations against open source AI. These big AI companies are asking the government to regulate the development of AI to a few "trusted" tech companies. 

Marc then compares this theory to Sam Altman, and the leaders of other Big Tech companies, begging for regulations against open source AI, saying "Economists will tell you it's the same pattern every time ... this is what's happened dozens and dozens of times throughout the last 100 years". 

It is clear that Andreessen is referring to these big AI companies rent seeking and riding off the backs of the general public's fear of the possibilities of AI, to get regulations passed that create barriers of entry into the AI field. Big Tech companies are known for being extremely slow to change and adapt, which is why new successful tech startups are constantly emerging. These AI regulations would efficiently make it impossible for new startups to enter the space and compete against these tech giants. 

Aint No Rest for the Wicked

    Saturday night, the night of the historical UVA upset over UNC, I ordered a couple of pizzas to eat with my friends. When I went to pick up the pizza from the delivery women at our front door, I greeted her with a pleasant, "Hi, how are you doing tonight?". This prompted her to begin telling me all about her week, which she complained about having her hours cut at a different job and having to pick up another job delivering pizzas. I expressed sympathy as I know no one wants to be delivering pizzas at 10 pm on a Saturday night, but she responded with "It's ok, it's free money". As I closed the door, the Coppock voice inside my head screamed, "There aint nothing in this life for free!" (shoutout Cage the Elephant). 

    For this delivery women, the money earned was not free. The cost of the money she made is the opportunity cost of what else she could have been doing with that time. Now, for some people, the opportunity cost of their time would be too high to pick up a lower paying job like delivering pizzas. This could be because they have a higher paying/valued opportunity, or it could be their marginal utility per extra dollar is low enough that leisure time is more valuable than an extra dollar would be. Even for this delivery women, she may have higher valued activities she could be doing (activities that bring her utility but not necessarily money); but, in her precarious position, any extra dollar is extremely valuable for her and her family. I was able to restrain myself from telling her she was wrong when she said the money is free, but in the future it is going to be difficult to subdue my inner economist.  

Coase's Theorem...Apply to Roommates

 This week I was slammed with work, and at some point had to find time to fit in a 3 hour take-home midterm for my memory distortions class. The only time that I could carve out 3 consecutive hours to take this test before the deadline was unfortunately Thursday night from 7-10 pm. My roommates were out for most of the time that I was taking the test, but they started coming back in with our other friends around 9, right when I was starting to feel the time crunch as I started my essay question on retrieval practice. For them, it was a regular Thursday night, and they were having fun in the living room, which is right next to my room, meaning I could hear everything and kept getting distracted.

I thought of the Coase theorem and his two key assumptions about the nonexistence of transaction costs and clearly defined property rights. I considered striking a deal with them, in which they compensated me for every minute they spent talking in the living room and disrupting the silence. I realized, however, that we did not have clearly defined property rights. We all live in the apartment and pay for equal ownership of areas such as the living room, and I could not be sure if they would have to pay me, or if I would be stuck paying them for some peace and quiet. I only had an hour left to finish my test at this point, so instead of spending my time working out the correct Coasian solution, I just opened my door and politely asked them to be a little quieter.

Please Fix My Broken Dorm Light

    We have a system for reporting maintenance requests in the UVA dorms. If a particular shower is clogged or a door alarm is wonky or a light is broken, you can simply file a request and maintenance will take care of it within two days. It is an impressive system and an advantage over living off-grounds where you are lucky if the landlord even responds to your email asking for repairs. But such a system is akin to the example in Chapter 6 in The Calculus of Consent where “any individual in the municipal group under consideration may secure road or street repairs or improvements when he requests it from the city authorities”.  

    In such a system, even a remote road traveled by only a few people would lead to repairs whose benefits are not shared evenly. Since only one individual is needed to take collection action to request repair and a student is rarely charged for the service, the expected external costs are high. There is an over investment because repairs for the smallest issues are filed, and the facilities staff size is likely larger than it would need to be. We likely see the external cost of such a system in the form of higher housing costs than would be if these expenses were charged to the individual rather than collectively. Nonetheless as someone with free housing as an RA, I am quite content with the current system.