How will California meet the ambitious goals defined by AB32? Here is a long answer; California's ARB's Scoping Plan for Climate Change Mitigation . Will implementing this plan increase the state's economic growth?

Want to see capitalism in action? Metal Recycling becomes Profitable


Localized "Consumer City" and the New York South Street Seaport . When does a green amenity district take off and succeed as a destination for people with $ to spend? Versus when does it not?

Starting with this important paper http://www.nber.org/papers/w7682, economists have been fascinated by whether the "default option" plays a key role in consumer choice. Do even the smallest transaction costs affect important choices such as retirement planning? Does inertia keep you from making choices that would improve your overall well being?

I've run into this issue on a very mundane issue. Prof. Costa and I will soon publish our new book. We want all NBER economists to read our book. As you will see below, the NBER offers the book for free to all of its members but you have to "opt in". You need to click on the link.


Dear Bureau Family Members:

The following NBER book will be available from the publisher soon. If you would like a copy, please click this link to place your order:
https://www.nber.org/login/login?u=matthew_kahn

Helena

*****
Heroes and Cowards: The Social Face of War
Dora L. Costa and Matthew E. Kahn
Princeton University Press


I had hoped that the NBER would consider an experiment with our book where they would send a NBER member a copy of the book and only not send you a copy if you click the link. So this would be an "opt out".

Would more NBER people read our book under the 2nd regime?

Tomorrow, I'll have a quote in a New York Times Article from June 25th 2008 . The article is about the impact of high gas prices on housing in the distant suburbs of major cities such as Denver. Ed Glaeser and I will release our paper that ranks metropolitan areas with respect to their household carbon dioxide emissions as a NBER Working Paper pretty soon. Los Angeles looks pretty green based on our ranking. Temperate climate and clean electric utilities (running on natural gas) help to offset the driving.

If you are real eager to see the short version of the paper, go to

www.hks.harvard.edu/rappaport/downloads/policybriefs/greencities_final.pdf

UPDATE: I've been humbled. I woke up this morning and got my New York Times and
I see that my quote was edited out of the article. I've been replaced by a photo of a happy kid. Serves me right for boasting prematurely!

Substitution Effects and Homelessness

In other news, some Duke Univ. Researchers have decided to teach us about hyperbolas.
Apparently, Gallons of gas consumed = miles*(gallons per mile)

June 24, 2008
Observatory
M.P.G. Can Mislead When Searching for Fuel Efficiency
By HENRY FOUNTAIN

In an era of climate change and expensive gasoline, a vehicle’s fuel efficiency, measured in miles per gallon, is an increasingly important factor to consider when shopping for a car.

But two Duke University business school professors say m.p.g. is a flawed measure and leads to a fundamental misconception about efficiency. They say the United States should do what some other countries do, which is rate cars by amount of fuel consumed for a given distance, gallons per 100 miles, for example.

The problem, Richard P. Larrick and Jack B. Soll write in Science, is that people perceive that fuel consumption falls in a linear fashion as m.p.g. increases. Surveys by the professors of college students found the perception that trading in a car that registers, say, 34 m.p.g. for one with 50 produces a greater savings than swapping an 18 m.p.g. vehicle for a 28 m.p.g. model.

In fact, the researchers say, the relationship between consumption and m.p.g. is curvilinear, and there is a greater savings at lower m.p.g.’s. Over 10,000 miles, the 28 m.p.g. car uses 198 fewer gallons than the 18 m.p.g., more than double the savings of the 50 m.p.g. car compared with the 34 m.p.g. one.

With this new measure, the researchers suggest, consumers would more easily see the value of swapping an inefficient car for one that is even just modestly more efficient.

This is funny. We detectives are always looking for clues. Sewage may smell but it offers important evidence for what its producers have been up to. In a city of 8 million people, one is likely to find traces of everything in the waste.


One big drug test for L.A.: sewage analysis
Experts are examining the outflow in several U.S. and European cities, and the data can be revealing.
By Marla Cone, Los Angeles Times Staff Writer
June 24, 2008

Which city uses more cocaine: Los Angeles or London? Is heroin a big problem in San Diego? And has Ecstasy emerged in rural America?

Environmental scientists are beginning to use an unsavory new tool -- raw sewage -- to paint an accurate portrait of drug abuse in communities. Like one big, citywide urinalysis, tests at municipal sewage plants in many areas of the United States and Europe, including Los Angeles County, have detected illicit drugs such as cocaine, methamphetamine, heroin and marijuana.

Law enforcement officials have long sought a way to come up with reliable and verifiable calculations of narcotics use, to identify new trends and formulate policies. Surveys, the backbone of drug-use estimates, are only as reliable as the people who answer them. But sewage does not lie.

Since people excrete chemicals in urine and flush it down toilets, measuring raw sewage for street drugs can provide quick, fairly precise snapshots of drug use in communities, even on a particular day.

The results have been intriguing: Methamphetamine levels in sewage are much higher in Las Vegas than in Omaha and Oklahoma City, Okla. Los Angeles County has more cocaine in its sewage than several major European cities. And Londoners apparently are heavier users of heroin than people in cities in Italy and Switzerland.

"Every sample has one illicit drug or another, regardless of location," said Jennifer Field, an environmental chemist at Oregon State University who has tested sewage in many U.S. cities. "You may see differences from place to place, but there's always something."

The new practice of testing sewage has illuminated an environmental threat: Many urban waterways around the world are contaminated with low doses of cocaine and other illicit drugs from treated sewage.

So far, this "sewage forensics" or "sewage epidemiology" has not been widespread. Treatment plants do not regularly monitor sewage for street drugs. The Environmental Protection Agency is planning to add illicit drugs to the array of substances that could be monitored daily at treatment plants.

Unlike prescription drugs and personal care products, which are a hot topic in environmental contamination, illicit drugs have long been below the radar.

Christian Daughton, chief of environmental chemistry at the EPA's National Exposure Research Laboratory, first proposed the tests in 2001.

"To me, chemicals are chemicals. All chemicals, whether legal or illegal, have the potential to get into the environment, and living organisms have a potential to be exposed," Daughton said.

Daughton, who was interested in environmental ramifications, realized that the data could help law enforcement, sociologists and others trying to gauge trends in drug abuse.

Most of those experts rely on door-to-door annual surveys, which are based on questioning of 70,000 people nationwide. Based on that, they estimate that more than 20 million Americans used illicit drugs in 2006.

Scientists in Italy, led by Roberto Fanelli and Ettore Zuccato, were the first to implement his idea, testing sewage in London; Milan, Italy; and Lugano, Switzerland, in 2005.

Amphetamines, including Ecstasy, were the least prevalent drugs in the three cities, whereas marijuana was widely detected, the Mario Negri Institute for Pharmacological Research reported in the online version of the journal Environmental Health Perspectives on their work, published last month.

For every 1,000 people, about 210 milligrams of heroin were used daily in London, compared with 70 in Milan and 100 in Lugano. Amphetamine use also was higher in London.

The scientists were even able to use sewage to estimate individual use and weekly trends. For instance, they estimated that people in Milan used twice as much cocaine, about 35 grams per person per year, than Italy's government surveys had suggested. Cocaine use peaked on Saturdays, while heroin and marijuana use remained steady weeklong.

In the United States, officials at the Office of National Drug Control Policy looked for cocaine in sewage from Los Angeles County and 23 other regions in 2006.

Untreated sewage at all eight treatment plants tested in Los Angeles County contained cocaine metabolite, according to data obtained from the Los Angeles County Sanitation Districts. Palmdale and Lancaster had the highest concentrations, averaging 3.5 parts per billion. The lowest, averaging 1.4 ppb, were from Long Beach and Valencia.

In all the Los Angeles County locations, the cocaine metabolite was more concentrated than in Omaha and in Italian, Swiss and British cities, which all had less than 1 ppb, according to a comparison of several studies.

Other tests have shown that some U.S. cities have a bigger methamphetamine problem than Europe. Within the U.S., Las Vegas' concentrations were five times higher than Omaha's and twice Oklahoma City's, said Field, who conducted those tests.

Comparing cities can be tricky. Concentrations can fluctuate because of volumes of flow, time of day and how long waste travels through sewers, which gives drugs a chance to degrade.

"This has caught on only recently, and people are still trying to understand the uncertainties," said Field, who is currently analyzing data from 96 locations in Oregon.

Jennifer de Vallance, spokeswoman for the White House's Office of National Drug Control Policy, said the testing of sewage in 2006 was an experiment to see if it could provide useful data to federal drug officials at a low cost.

"It came back very favorable. Our determination was that it probably could be done on a larger scale," she said.

EPA Assistant Administrator Benjamin Grumbles said that the EPA and the national drug office are "working on the details" of a voluntary program at sewage plants that will test for illicit drugs.

"This is sensitive for various communities because these substances do have a stigma attached to them," Daughton said. San Diego, for example, refused to grant permission to researchers.

The Sanitation Districts of Los Angeles County don't test for illicit drugs because iDrug Enforcement Administration permits to handle controlled substances would be needed, said supervising engineer Ann Heil.

"It's too hard to test for it. We can't have morphine lying around to calibrate equipment," she said.

Some researchers are now checking the environment for illicit drugs. Traces of prescription drugs have been detected in some drinking water supplies, and cocaine and other drugs have been found in rivers. No one has tested drinking water for illicit drugs.

"Since most of these residues still have potent pharmacological activities, their presence in the aquatic environment may have potential implications for human health and wildlife," the scientists from Milan reported in February.

Although few researchers are studying the effect of these ultra-low doses, scientists say the threat to people is probably minimal. To get a typical dose of cocaine, someone would have to drink 1,000 liters of raw sewage, Field said.

For now, this new drug test remains anonymous. Wastewater from thousands, sometimes millions, of people is pooled at treatment plants, so it cannot be tracked to any individual or specific location.

But because waste also can be tested in local sewers, questions about privacy have been raised.

"You could take this down to a community, a street, even a house," Daughton said. "You can do all kinds of stuff with this. It's sort of unlimited."

marla.cone@latimes.com

The next generation of Kahns are cute and happy. This is progress relative to our recent past. I congratulate my brother. I'm trying to be a good uncle.




This young lady can be united with her first cousin.



My only regret in this life is that I'm not at the UCEI Energy Camp right now.

Everybody knows that our nation's Capitol is a delightful place to be during the summer time. My wife loves humidity so I hope you attend her talk about our new Princeton Press book. As a bonus, you'll also hear from Robert Fogel.

Press Release
June 4, 2008
National Archives Holds Program on Military Records June 24
Heroes and Cowards: The Social Face of War

Washington, DC…On Tuesday, June 24 at 11:30 AM, the National Archives will host Heroes and Cowards: The Social Face of the War. The program, which is free and open to the public, will be held in Room G-24 of the National Archives Building, located on Pennsylvania Avenue between 7th and 9th Streets, NW (enter at 700 Pennsylvania Avenue, NW).

Economic historians Dora Costa and Robert Fogel will discuss how they use military records from the National Archives in their ongoing research. Dora Costa will also discuss her forthcoming book, Heroes and Cowards: The Social Face of War, written with her husband, Matthew E. Kahn. Based on government documents and Civil War soldiers' journals, the book explores the role social capital plays in people's decisions. The book also examines the experience of African-American soldiers and makes important observations about how their comrades shaped their lives.

Dora L. Costa is Professor of Economics at MIT where she teaches economic history. She is also a research associate in the National Bureau of Economic Research's programs on the Development of the American Economy and on Aging and the co-director of the working group Cohort Studies. Professor Costa is coauthoring Heroes and Cowards: The Social Face of the War with her husband Matthew E. Kahn, a professor of Economics at the University of California, Los Angeles.

Robert W. Fogel, a Nobel laureate in economics, is an economic historian and scientist. Fogel serves on the faculty of the University of Chicago’s Economics Department and School of Business. He is also a Research Associate at the National Bureau of Economic Research.

For information on other National Archives records-related programs and workshops, see the Know Your Records web page.

The National Archives is fully accessible. To request an accommodation (e.g., sign language interpreter) from the Know Your Records (KYR) program staff, please e-mail KYR@nara.gov or call 202-357-5333 two weeks prior to the event.

# # #

For press information contact the National Archives Public Affairs staff at 202-357-5300.

08-117

Prof. Magali Delmas and I are getting ready to launch a new center at UCLA's Institute of the Environment. Pretty soon when you go to www.ioe.ucla.edu, you'll be able to read about what our new Center for Corporate Environmental Performance is up to. We are currently seeking out firms who are interested in partnering with us. We believe that we have some interesting things to tell you.

In thinking broadly about the big think issue of how modern firms address the opportunities and challenges posed by environmental issues, it is important to keep in mind what some of the best thinkers have had to say. Let's listen to Dr. Friedman.


The Social Responsibility of Business is to Increase its Profits
by Milton Friedman

The New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company.

When I hear businessmen speak eloquently about the "social responsibilities of business in a free-enterprise system," I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free en­terprise when they declaim that business is not concerned "merely" with profit but also with promoting desirable "social" ends; that business has a "social conscience" and takes seriously its responsibilities for providing em­ployment, eliminating discrimination, avoid­ing pollution and whatever else may be the catchwords of the contemporary crop of re­formers. In fact they are–or would be if they or anyone else took them seriously–preach­ing pure and unadulterated socialism. Busi­nessmen who talk this way are unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades.

The discussions of the "social responsibili­ties of business" are notable for their analytical looseness and lack of rigor. What does it mean to say that "business" has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but "business" as a whole cannot be said to have responsibilities, even in this vague sense. The first step toward clarity in examining the doctrine of the social responsibility of business is to ask precisely what it implies for whom.

Presumably, the individuals who are to be responsible are businessmen, which means in­dividual proprietors or corporate executives. Most of the discussion of social responsibility is directed at corporations, so in what follows I shall mostly neglect the individual proprietors and speak of corporate executives.

In a free-enterprise, private-property sys­tem, a corporate executive is an employee of the owners of the business. He has direct re­sponsibility to his employers. That responsi­bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con­forming to the basic rules of the society, both those embodied in law and those embodied in ethical custom. Of course, in some cases his employers may have a different objective. A group of persons might establish a corporation for an eleemosynary purpose–for exam­ple, a hospital or a school. The manager of such a corporation will not have money profit as his objective but the rendering of certain services.

In either case, the key point is that, in his capacity as a corporate executive, the manager is the agent of the individuals who own the corporation or establish the eleemosynary institution, and his primary responsibility is to them.

Needless to say, this does not mean that it is easy to judge how well he is performing his task. But at least the criterion of performance is straightforward, and the persons among whom a voluntary contractual arrangement exists are clearly defined.

Of course, the corporate executive is also a person in his own right. As a person, he may have many other responsibilities that he rec­ognizes or assumes voluntarily–to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He ma}. feel impelled by these responsibilities to de­vote part of his income to causes he regards as worthy, to refuse to work for particular corpo­rations, even to leave his job, for example, to join his country's armed forces. Ifwe wish, we may refer to some of these responsibilities as "social responsibilities." But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are "social responsibili­ties," they are the social responsibilities of in­dividuals, not of business.

What does it mean to say that the corpo­rate executive has a "social responsibility" in his capacity as businessman? If this statement is not pure rhetoric, it must mean that he is to act in some way that is not in the interest of his employers. For example, that he is to refrain from increasing the price of the product in order to contribute to the social objective of preventing inflation, even though a price in crease would be in the best interests of the corporation. Or that he is to make expendi­tures on reducing pollution beyond the amount that is in the best interests of the cor­poration or that is required by law in order to contribute to the social objective of improving the environment. Or that, at the expense of corporate profits, he is to hire "hardcore" un­employed instead of better qualified available workmen to contribute to the social objective of reducing poverty.

In each of these cases, the corporate exec­utive would be spending someone else's money for a general social interest. Insofar as his actions in accord with his "social responsi­bility" reduce returns to stockholders, he is spending their money. Insofar as his actions raise the price to customers, he is spending the customers' money. Insofar as his actions lower the wages of some employees, he is spending their money.

The stockholders or the customers or the employees could separately spend their own money on the particular action if they wished to do so. The executive is exercising a distinct "social responsibility," rather than serving as an agent of the stockholders or the customers or the employees, only if he spends the money in a different way than they would have spent it.

But if he does this, he is in effect imposing taxes, on the one hand, and deciding how the tax proceeds shall be spent, on the other.

This process raises political questions on two levels: principle and consequences. On the level of political principle, the imposition of taxes and the expenditure of tax proceeds are gov­ernmental functions. We have established elab­orate constitutional, parliamentary and judicial provisions to control these functions, to assure that taxes are imposed so far as possible in ac­cordance with the preferences and desires of the public–after all, "taxation without repre­sentation" was one of the battle cries of the American Revolution. We have a system of checks and balances to separate the legisla­tive function of imposing taxes and enacting expenditures from the executive function of collecting taxes and administering expendi­ture programs and from the judicial function of mediating disputes and interpreting the law.

Here the businessman–self-selected or appointed directly or indirectly by stockhold­ers–is to be simultaneously legislator, execu­tive and, jurist. He is to decide whom to tax by how much and for what purpose, and he is to spend the proceeds–all this guided only by general exhortations from on high to restrain inflation, improve the environment, fight poverty and so on and on.

The whole justification for permitting the corporate executive to be selected by the stockholders is that the executive is an agent serving the interests of his principal. This jus­tification disappears when the corporate ex­ecutive imposes taxes and spends the pro­ceeds for "social" purposes. He becomes in effect a public employee, a civil servant, even though he remains in name an employee of a private enterprise. On grounds of political principle, it is intolerable that such civil ser­vants–insofar as their actions in the name of social responsibility are real and not just win­dow-dressing–should be selected as they are now. If they are to be civil servants, then they must be elected through a political process. If they are to impose taxes and make expendi­tures to foster "social" objectives, then politi­cal machinery must be set up to make the as­sessment of taxes and to determine through a political process the objectives to be served.

This is the basic reason why the doctrine of "social responsibility" involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scarce re­sources to alternative uses.

On the grounds of consequences, can the corporate executive in fact discharge his al­leged "social responsibilities?" On the other hand, suppose he could get away with spending the stockholders' or customers' or employees' money. How is he to know how to spend it? He is told that he must contribute to fighting inflation. How is he to know what ac­tion of his will contribute to that end? He is presumably an expert in running his company–in producing a product or selling it or financing it. But nothing about his selection makes him an expert on inflation. Will his hold­ ing down the price of his product reduce infla­tionary pressure? Or, by leaving more spending power in the hands of his customers, simply divert it elsewhere? Or, by forcing him to produce less because of the lower price, will it simply contribute to shortages? Even if he could an­swer these questions, how much cost is he justi­fied in imposing on his stockholders, customers and employees for this social purpose? What is his appropriate share and what is the appropri­ate share of others?

And, whether he wants to or not, can he get away with spending his stockholders', cus­tomers' or employees' money? Will not the stockholders fire him? (Either the present ones or those who take over when his actions in the name of social responsibility have re­duced the corporation's profits and the price of its stock.) His customers and his employees can desert him for other producers and em­ployers less scrupulous in exercising their so­cial responsibilities.

This facet of "social responsibility" doc­ trine is brought into sharp relief when the doctrine is used to justify wage restraint by trade unions. The conflict of interest is naked and clear when union officials are asked to subordinate the interest of their members to some more general purpose. If the union offi­cials try to enforce wage restraint, the consequence is likely to be wildcat strikes, rank­-and-file revolts and the emergence of strong competitors for their jobs. We thus have the ironic phenomenon that union leaders–at least in the U.S.–have objected to Govern­ment interference with the market far more consistently and courageously than have business leaders.

The difficulty of exercising "social responsibility" illustrates, of course, the great virtue of private competitive enterprise–it forces people to be responsible for their own actions and makes it difficult for them to "exploit" other people for either selfish or unselfish purposes. They can do good–but only at their own expense.

Many a reader who has followed the argu­ment this far may be tempted to remonstrate that it is all well and good to speak of Government's having the responsibility to im­pose taxes and determine expenditures for such "social" purposes as controlling pollu­tion or training the hard-core unemployed, but that the problems are too urgent to wait on the slow course of political processes, that the exercise of social responsibility by busi­nessmen is a quicker and surer way to solve pressing current problems.

Aside from the question of fact–I share Adam Smith's skepticism about the benefits that can be expected from "those who affected to trade for the public good"–this argument must be rejected on grounds of principle. What it amounts to is an assertion that those who favor the taxes and expenditures in question have failed to persuade a majority of their fellow citizens to be of like mind and that they are seeking to attain by undemocratic procedures what they cannot attain by democratic proce­dures. In a free society, it is hard for "evil" people to do "evil," especially since one man's good is another's evil.

I have, for simplicity, concentrated on the special case of the corporate executive, ex­cept only for the brief digression on trade unions. But precisely the same argument ap­plies to the newer phenomenon of calling upon stockholders to require corporations to exercise social responsibility (the recent G.M crusade for example). In most of these cases, what is in effect involved is some stockholders trying to get other stockholders (or customers or employees) to contribute against their will to "social" causes favored by the activists. In­sofar as they succeed, they are again imposing taxes and spending the proceeds.

The situation of the individual proprietor is somewhat different. If he acts to reduce the returns of his enterprise in order to exercise his "social responsibility," he is spending his own money, not someone else's. If he wishes to spend his money on such purposes, that is his right, and I cannot see that there is any ob­jection to his doing so. In the process, he, too, may impose costs on employees and cus­tomers. However, because he is far less likely than a large corporation or union to have mo­nopolistic power, any such side effects will tend to be minor.

Of course, in practice the doctrine of social responsibility is frequently a cloak for actions that are justified on other grounds rather than a reason for those actions.

To illustrate, it may well be in the long run interest of a corporation that is a major employer in a small community to devote resources to providing amenities to that community or to improving its government. That may make it easier to attract desirable employees, it may reduce the wage bill or lessen losses from pilferage and sabotage or have other worthwhile effects. Or it may be that, given the laws about the deductibility of corporate charitable contributions, the stockholders can contribute more to chari­ties they favor by having the corporation make the gift than by doing it themselves, since they can in that way contribute an amount that would otherwise have been paid as corporate taxes.

In each of these–and many similar–cases, there is a strong temptation to rationalize these actions as an exercise of "social responsibility." In the present climate of opinion, with its wide spread aversion to "capitalism," "profits," the "soulless corporation" and so on, this is one way for a corporation to generate goodwill as a by-product of expenditures that are entirely justified in its own self-interest.

It would be inconsistent of me to call on corporate executives to refrain from this hyp­ocritical window-dressing because it harms the foundations of a free society. That would be to call on them to exercise a "social re­sponsibility"! If our institutions, and the atti­tudes of the public make it in their self-inter­est to cloak their actions in this way, I cannot summon much indignation to denounce them. At the same time, I can express admiration for those individual proprietors or owners of closely held corporations or stockholders of more broadly held corporations who disdain such tactics as approaching fraud.

Whether blameworthy or not, the use of the cloak of social responsibility, and the nonsense spoken in its name by influential and presti­gious businessmen, does clearly harm the foun­dations of a free society. I have been impressed time and again by the schizophrenic character of many businessmen. They are capable of being extremely farsighted and clearheaded in matters that are internal to their businesses. They are incredibly shortsighted and muddle­headed in matters that are outside their businesses but affect the possible survival of busi­ness in general. This shortsightedness is strikingly exemplified in the calls from many businessmen for wage and price guidelines or controls or income policies. There is nothing that could do more in a brief period to destroy a market system and replace it by a centrally con­trolled system than effective governmental con­trol of prices and wages.

The shortsightedness is also exemplified in speeches by businessmen on social respon­sibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal impulse.

The political principle that underlies the market mechanism is unanimity. In an ideal free market resting on private property, no individual can coerce any other, all coopera­tion is voluntary, all parties to such coopera­tion benefit or they need not participate. There are no values, no "social" responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form.

The political principle that underlies the political mechanism is conformity. The indi­vidual must serve a more general social inter­est–whether that be determined by a church or a dictator or a majority. The individual may have a vote and say in what is to be done, but if he is overruled, he must conform. It is appropriate for some to require others to contribute to a general social purpose whether they wish to or not.

Unfortunately, unanimity is not always feasi­ble. There are some respects in which conformity appears unavoidable, so I do not see how one can avoid the use of the political mecha­nism altogether.

But the doctrine of "social responsibility" taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. That is why, in my book Capitalism and Freedom, I have called it a "fundamentally subversive doctrine" in a free society, and have said that in such a society, "there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

The neuroscientists get to have a lot of fun with fMRI machines. This article below based on UCLA research sketches a simple experimental design for figuring out what parts of a person's brain "light up" when exposed to different grief stimuli. Due to cost, the sample size in these experiments are really small. Does this raise issues concerning how one formally tests hypotheses?

I have some notes on how to use fMRI technology for studying preference issues in environmental economics. Some people have found my proposed experiment to be pretty interesting while others have just found it to be disturbing. Please get in touch with me if you have a spare fMRI machine that I can borrow.


June 20, 2008


Study shows that chronic grief activates pleasure areas of the brain
Findings could change how health professionals treat the disorder



Mark Wheeler, mwheeler@mednet.ucla.edu

310-794-2265


Grief is universal, and most of us will probably experience the pain grief brings at some point in our lives, usually with the death of a loved one. In time, we move on, accepting the loss.



But for a substantial minority, it's impossible to let go, and even years later, any reminder of their loss — a picture, a memory — brings on a fresh wave of grief and yearning. The question is, why? Why do some grieve and ultimately adapt, while others can't get over the loss of someone held dear?



Reporting in the journal NeuroImage, scientists at UCLA suggest that such long-term or "complicated" grief activates neurons in the reward centers of the brain, possibly giving these memories addiction-like properties. Their research is currently available in the journal's online edition.



This study is the first to compare those with complicated and noncomplicated grief, and future research in this area may help psychologists do a better job of treating those with complicated grief, according to Mary-Frances O'Connor, UCLA assistant professor of psychiatry and lead author of the study.



"The idea is that when our loved ones are alive, we get a rewarding cue from seeing them or things that remind us of them," O'Connor said. "After the loved one dies, those who adapt to the loss stop getting this neural reward. But those who don't adapt continue to crave it, because each time they do see a cue, they still get that neural reward.



"Of course, all of this is outside of conscious thought, so there isn't an intention about it," she said.

The study analyzed whether those with complicated grief had greater activity occurring in either the brain's reward network or pain network than those with noncomplicated grief. The researchers looked at 23 women who had lost a mother or a sister to breast cancer. (Grief is very problematic among survivors of breast cancer patients, particularly among female family members who have increased risk based on their family history). They found that, of that number, 11 had complicated grief, and 12 had the more normal, noncomplicated grief.



Each of the study participants brought a photograph of their deceased loved one and were shown this picture while undergoing brain scanning by functional magnetic resonance imaging (fMRI). Next, they were scanned while looking at a photograph of a female stranger.



The authors looked for activity in the nucleus accumbens, a region of the brain most commonly associated with reward and one that has also been shown to play a role in social attachment, such as sibling and maternal affiliation. They also examined activity in the pain network of the brain, including the dorsal anterior cingulate cortex and the insula, which has been implicated in both physical and social pain. They found that while both groups had activation in the pain network of the brain after viewing a picture of their loved one, only individuals with complicated grief showed significant nucleus accumbens activations.



Complicated grief can be debilitating, involving recurrent pangs of painful emotions, including intense yearning, longing and searching for the deceased, and a preoccupation with thoughts of the loved one. This syndrome has now been defined by an empirically derived set of criteria and is being considered for inclusion in the DSM-V, the psychiatric manual for diagnosing mental disorders.



O'Connor, who is a member of UCLA's Cousins Center for Psychoneuroimmunology, cautions that she is not suggesting that such reveries about the deceased are emotionally satisfying but rather that they may serve in some people as a type of craving for the reward response that may make adapting to the reality of the loss more difficult.



The study was funded by the California Breast Cancer Research Program. Other authors included David K. Wellisch, Annette L. Stanton, Naomi I. Eisenberger, Michael R. Irwin and Matthew D. Lieberman, all of UCLA.



The UCLA Cousins Center for Psychoneuroimmunology brings together research expertise in the behavioral sciences, neuroscience and immunology to understand the interplay of psychological and biological factors in disease and how the resiliency of the human body can be aided by positive behaviors, attitudes and emotions. The center is part of the Semel Institute for Neuroscience and Human Behavior at UCLA, an interdisciplinary research and education institute devoted to the understanding of complex human behavior, including the genetic, biological, behavioral and sociocultural underpinnings of normal behavior, and the causes and consequences of neuropsychiatric disorders.

We keep hearing about the housing price meltdown. www.zillow.com has some facts about the ritzy 90210 zip code on the west side of Los Angeles (1 mile east of UCLA). You can double difference the data presented below. The blue line presents time trends over the last 5 years in average home prices in 90210 while the red line presents average home prices in Los Angeles county. I see divergence big time. What will President Obama do about this inequity? Is this just a bubble? Have you sold short your shares in Beverly Hills real estate?