Worst of all was the dung. The average horse produced about 24 pounds of manure a day. With 200,000 horses, that’s nearly 5 million pounds of horse manure. A day. Where did it go?
Decades earlier, when horses were less plentiful in cities, there was a smooth-functioning market for manure, with farmers buying it to truck off (via horse, of course) to their fields. But as the urban equine population exploded, there was a massive glut. In vacant lots, horse manure was piled as high as sixty feet. It lined city streets like banks of snow. In the summertime, it stank to the heavens; when the rains came, a soupy stream of horse manure flooded the crosswalks and seeped into people’s basements. Today, when you admire old New York brownstones and the elegant stoops, rising from street level to the second-story parlor, keep in mind that this was a design necessity, allowing a homeowner to rise above the sea of horse manure.
Her price hikes revealed another surprise: the more she charged, the less actual sex she was having. At $300 an hour, she had a string of one-hour appointments with each man wanting to get in as much action as he could. But charging $500 an hour, she was often wined and dined — “a four-hour dinner date that ends with a twenty-minute sexual encounter,” she says, “even though I was the same girl, dressed the same, and had the same conversations as when I charged $300.”
Allie had found that most people who bought her services were, in the language of economics, price insensitive. Demand for sex seemed relatively uncoupled from the broader economy.
Allie has never had any trouble with the police, and doesn’t expect to. The truth is that she would be distraught if prostitution were legalized, because here stratospherically high wage stems from the fact that the service she provides cannot be gotten legally.
“For years, I treated patients with no more information than the patients could tell me,” Feied says. “Any other information took too long, so you couldn’t factor it in. We often knew what information we needed, and even knew where it was, but it just wasn’t available in time. The critical piece of data might have been two hours away or two weeks away. In a busy emergency department, even two minutes away is too much. You can’t do that when you have forty patients and half of them are trying to die.”
The problem agitated Feied so badly that he had turned himself into the world’s first emergency-medicine informaticist. He believed that the best way to improve clinical care in the ER was to improve the flow of information.
To give the ER doctors and nurses what they really needed, a computer system had to be built from the ground up. It had to be encyclopedic (one missing piece of key data would defeat the purpose); it had to be muscular (a single MRI, for instance, ate up a massive amount of data capacity); and it had to be flexible (a system that couldn’t incorporate any data from any department in any hospital in the past, present, or future was useless).
It also had to be really, really fast. Not only because slowness kills in an ER but because, as Feied had learned from the scientific literature, a person using a computer experiences “cognitive drift” if more than one second elapses between clicking the mouse and seeing new data on the screen. If ten seconds pass, the person’s mind is somewhere else entirely. That’s how medical errors are made.
To build this fast, flexible, muscular, encyclopedic system, Feied and Smith turned to their old crush: object-oriented programming. They set to work using a new architecture that they called “data-centric” and “data-atomic.” Their system would deconstruct each piece of data from every department and store it in a way that allowed it to interact with any other single piece of data, or any other 1 billion pieces.
Many people who in previous generations would have died from heart disease are now living long enough to die from cancer instead.
An elderly parent in a retirement home is more likely to be visited by his grown children if they are expecting a sizable inheritance.
But wait, you say: maybe the offspring of wealthy families are simply more caring toward their elderly parents?
A reasonable conjecture — in which case you’d expect an only child of wealthy parents to be especially dutiful. But the data show no increase in retirement-home visits if a wealthy family has only one grown child; there need to be at least two. This suggests that the visits increase because of competition between siblings for the parent’s estate. What might look like good old-fashioned intrafamilial altruism may be a sort of prepaid inheritance tax.
If your only option in the lab is to give away some money, you probably will. But in the real world, that is rarely your only option. The final version of this experiment, with the envelop-stuffing, was perhaps most compelling. It suggests that when a person comes into some money honestly and believes that another person has done the same, she neither gives away what she earned nor takes what doesn’t belong to her.
Another factor that pollutes laboratory experiments is scrutiny. When a scientist brings a lump of uranium into a lab, or a mealworm or a colony of bacteria, that object isn’t likely to change its behavior just because it’s being watched by someone in a white lab coat.
For human beings, however, scrutiny has a powerful effect. Do you run a red light when there’s a police car — or, increasingly these days, a mounted camera — at the intersection? Thought not. Are you more likely to wash your hands in the office restroom if your boss is already washing hers? Thought so.
As we wrote earlier, the law of unintended consequences is among the most potent laws in existence. Governments, for instance, often enact legislation meant to protect their most vulnerable charges but that instead ends up hurting them.
Consider the Americans with Disabilities Act (ADA), which was intended to safeguard disabled workers from discrimination. A noble intention, yes? Absolutely — but the data convincingly show that the net result was fewer jobs for American with disabilities. Why? After the ADA became law, employers were so worried they wouldn’t be able to discipline or fire bad workers who had a disability that they avoided hiring such workers in the first place.
The Endangered Species Act created a similarly perverse incentive. When landowners fear their property is an attractive habitat for an endangered animal, or even an animal that is being considered for such status, they rush to cut down trees to make it less attractive.
Many governments have started to base their trash-pickup fees on volume. If people have to pay for each extra bag of garbage, the thinking goes, they’ll have a strong incentive to produce less of it. But this new way of pricing also gives people an incentive to stuff their bags ever fuller or just dump their trash in the woods. In Germany, trash-tax avoiders flushed so much uneaten food down the toilet that the sewers became infested with rats. A new garbage tax in Ireland generated a spike in backyard trash burning.
Traffic fatalities still claim more than 40,000 lives a year, but relatively speaking, driving isn’t that dangerous anymore. What makes the death toll so high is that so many Americans spend an enormous amount of time in their cars, racking up some 3 trillion miles per year. That translates into one death for every 75 million miles driven — or, put another way, if you drove 24 hours a day at 30 miles per hour, you could expect to die in a car accident only after driving for 285 straight years.
So don’t go throwing out your car seats just yet. (That would be illegal in all fifty states.) Children are such valuable cargo that even the relatively small benefit car seats seem to provide in preventing minor injuries may make them a worthwhile investment. There’s another benefit that’s hard to put a price tag on: a parent’s peace of mind.
Or, looking at it another way, maybe that’s the greatest cost of car seats. They give parents a misplaced sense of security, a belief they’ve done everything possible to protect their children. This complacency keeps us from striving for a better solution, one that may well be simpler and cheaper, and would save even more lives.
But as most economists know, people are generally unwilling to spend a lot of money to avert a future problem, especially when its likelihood is so uncertain. One good reason for waiting is that we might have options in the future to avert the problem that cost far less than today’s options.
Although economists are trained to be cold-blooded enough to sit around and calmly discuss the trade-offs involved in the global catastrophe, the rest of us are a bit more excitable. And most people respond to uncertainty with more emotion — fear, blame, paralysis — than might be advisable. Uncertainty also has a nasty way of making us conjure up the very worst possibilities. With global warming, the worst possibilities are downright biblical: rising seas, hellish temperature, plague upon plague, a planet in chaos.
It is understandable, therefore, that the movement to stop global warming has taken on the feel of a religion.
If the modern conservation movement has a patron saint, it is surely Al Gore.
But when it comes to actually solving climate-change externalities through taxes, all we can say is good luck. Besides the obvious obstacles — like determining the right size of the tax and getting someone to collect it — there’s the fact that greenhouse gases do not adhere to national boundaries. The earth’s atmosphere is in constant, complex motion, which means that your emissions become mine and mine yours. Thus, global warming.
When people aren’t compelled to pay the full cost of their actions, they have little incentive to change their behavior. Back when the world’s big cities are choked with horse manure, people didn’t switch to the car because it was good for society; they switched because it was in their economic interest to do so. Today, people are being asked to change their behavior not out of self-interest but rather out of selflessness. This might make global warming seem like a hopeless problem unless — and this is what Al Gore is banking on — people are willing to put aside their self-interest and do the right thing even if it’s personally costly. Gore is appealing to our altruistic selves, our externality-hating better angels.
When it comes to auto theft, fast is important. Once your car has been missing more than a few days, you generally don’t want it back, because it likely will have been stripped.
When a doctor fails to wash his hands, his own life isn’t the one that is primarily endangered. It is the next patient he treats, the one with the open wound or the compromised immune system. The dangerous bacteria that patient receives are a negative externality of the doctor’s actions — just as pollution is a negative externality of anyone who drives a car, jacks up the air conditioner, or sends coal exhaust up a smokestack. The polluter has insufficient incentive to not pollute, and the doctor has insufficient incentive to wash his hands.
This is what makes the science of behavior change so difficult.