Prisons and Asylums, what’s the difference?

Arnold Kling at Econlog, quoted and linked to Bernard Harcourt at Volokh Conspiracy. Prisons and mental health institutions seem to be substitutes for one another. Today and always in this country anyways.
My comment:
David Rothman’s The Discovery of the Asylum, is probably the most exhaustive history of incarceration institutions in America. He explicitly parallels the birth and growth of asylums with prisons in the US.
By the way, the functions of both institutions appear to have been achieved effectively by private means long before state, regional, or national provision.

Are R & D investments responsive to the interest rate?

I’m trying to wrap up my first semester of teaching intermediate macro. After surveying all of the major schools of thought I’m concluding with discussions about spontaneous order and some Austrian business cycle theory.
One of my students has brought up, what I have come to realize is a brilliant question:
What if the knowledge benefits of a new technology produced during the boom outweigh the physical capital losses of the bust?
If they do then new money is less disruptive to the economy when it is spent on R & D development. But the question could be a moot point if empirically R & D is not responsive to changes in interest rates. I would assume that this data is easily available, but if anyone knows specifically where I could track it down or knows of anyone writing on similar topics I’d appreciate a note.
PS–Hat tip to Adam Martin for the helpful discussion.

Profiting off retro imagery

I have a theory about music something akin to Hillary Clinton’s view of child education (I promise never to make a positive reference to Hillary Clinton again): it takes a village. In other words for every super group like the Beatles or the Rolling Stones, there’s several dozens of other bands back in the UK who form an entire cultural community that built the genre.

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More Tullockisms

If you enjoyed these oldies but goodies, you’ll love these two new gems (hat tip to Adam Martin for recording them in last years special topics of Public Choice class).
“I’m sure most of you don’t read the newspaper. If you did, you would know that Ecuador just elected a new president. He has a PhD from the University of Illinois, and the main plank of his campaign was a high protective tariff, which shows what they teach at the University of Illinois.”
“There don’t seem to be any effects of global warming except making it harder to kill seals, and since I’m pro-seal I don’t really care.”

There are no terrorists.

This post may not be appreciated or agreed with by many people, but it’s something that has come to mind that I feel compelled to write down nonetheless. In breaking news there has been a terrible school shooting at Virginia Tech. I’d like to start by saying that this is a terrible tragedy and my heart goes out to the victims, their families and everyone effected.

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Some thoughts on IP

I’m unsatisfied with the argument that pharmaceutical companies need patents on their new drugs because otherwise their R and D is so expensive and long term that a removal of their patent privilege would greatly reduce the number of new drugs that hit the market. The argument then implies that keeping this amount of drugs from dropping is well worth whatever innovations and losses the monopoly restrictions bring along.

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Hart, Shleifer and Vishny on “Private” Prisons

In the case of prisons, concern that private providers hire unqualified gaurds to save costs, thereby undermining safety and security of prisoners why private contracting is generally cheaper, and why in some cases it may deliver a higher, while in others a lower, quality level than in-house provision by the government…
In contrast, if the provider is a private contractor, he has the residual control approval for a cost reduction. At the same time, if a private contractor wants to improve quality and get a higher price, he needs to negotiate with the government since the government is the buyer of the service. As a consequence, the private contractor generally has a stronger incentive both to improve quality and to reduce costs than the government employee has. But, the private contractor’s incentive to engage in cost reduction is typically too strong since he ignores the adverse impact on quality (Hart, Shleifer, and Vishny, 1997, pp. 1128 and 1129).

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