I enjoyed Laura Miller on Baruch Spinoza, Jason Soon on road pricing & Joshua Gans on R&D.
(i) This nice article on the philosopher’s philosopher Baruch Spinoza. Ideas reviled and rejected but the 'athiest Jew' curiously respected.
(ii) A useful post on the case for road pricing rather than increasing road supplies by Jason Soon at Catallaxy. Many of the discussants focus on the political feasibility of pricing. An interesting related line of enquiry links road supply decisions with efficient pricing so its not really an either/or issue. For example if there are constant returns to investment in road infrastructure, and you are making a profit out of efficiently-priced roads, they should be expanded. This used to once be considered abstract theory but with comprehensive electronic road pricing it might become a practical proposal. Of course if you don’t have efficient pricing you will spend excessively on roads to mop up the congestion.
I am a strong supporter of comprehensive pricing of roads at short-run marginal cost. But I agree with those who recognise the political constraints in doing so. You can improve the acceptability of pricing if you offer people alternatives - for example, the chance to drive in an uncongested priced lane or a congested unpriced lane. Also improve acceptability if tolls are spent on visible public goods relevant to those affected by the tolls. And finally improved acceptability arises if you make it clear that tolls will result in taxes being cut elsewhere so that pricing is revenue neutral.
By the way, charges on roads yield a double dividend - they raise revenue and clean up a congestion externality. They are a better idea than relying on gambling taxes which are highly regressive and which rely on the social evil of problem gambling that destroys the lives of so many working people. Problem gambling is very much supply-determined (no venues, much fewer problems) so a swap from relying on poker machine taxes to congestion charges advances community welfare.
(iii) An intriguing post by Joshua Gans on a disappointingly inconclusive report by the Productivity Commission on the impact of R&D. There is nothing wrong with the report itself – it seems to be an honest piece of econometrics and that is what was sought – but doesn’t seem to involve much creativity in thinking through the basic ideas. Joshua quite rightly emphasizes the important issue of borrowing or leeching technology from overseas.
Australia faces a portfolio problem in allocating effort between various R&D priorities and leeching. We need to do our own R&D in specific Australian areas (agriculture, minerals industry, environmental management) and I suspect that a more general R&D effort helps us to more effectively leech. But apart from that – we are a small open economy and we should be able to leech a lot. Universities and groups such as the CSIRO I hope understand that.