Tuesday, February 28, 2006

A Hat-trick for Globalization

by Berly

All the world is a football field,
And all the men and women merely players

Forgive my pun on that Shakespeare sonnet, but if you live in Italy football is everywhere. Even if those magnificent churches are empty on Sunday, the stadium and pubs are never empty when a game is on. Sunday night’s TV is full with football coverage and Monday morning in class in time to tease between supporters of different teams.

I came across an excellent essay by Branko Milanovic, an economist at the Carnegie Endowment for International Peace, entitled Learning Globalization From Football.

So, let us set to watch a football match between near-ideal globalization represented by football (F) and real world (RW) globalization.

In football the markets works since supply met their demand. A team can hire any player they like if they can pay the price and a player can look for team that suits its taste after the contract expire (one can even break the contract, for a price). No monopoly and price fixing. Compare that with real world oligopolistic business arrangement and trade restrictions.

The whistle is sounded and the game begins… the F team make a beautiful breakthrough and Inzaghi scored with high curve that elude the goal keeper. 1-0!

In football, there is no limitation of player mobility. All of Arsenal’s players are non-British nationals and the coach is French. Most of top European clubs employed non European in their team. And how does an African or Asian get spotted? Just play well in World Cup or regional cup and flood of offers will come. Meritocracy is at work here and eveyone has a chance. Compare with real world where it’s very difficult (especially for non western) to work across countries with all the licenses and legal limitations.

The keeper of RW is making illegal move and resulted in Penalty. Totti took the shoot and make a powerful curving banana. 2-0!

Remember when Senegal beat France in 2002 World Cup? A French friend of mine give excused that it’s actually French against French since most of Senegal team play on French league. In football, after learning to play with the best and in the toughest league the players will go back to play for their own countries in World Cup and Olympics. Thus, spreading their hard gained skills to their fellow countrymen and brings pride for their country. Similar arrangement need to be made in globalization where the ex-pat from developing countries can share their skill and network to their countrymen beside sending remittance to their immediate family.

Ibrahimovic and Del Piero bring the ball crossing defensive line and work toe-to-toe in order to face the lonely goal keeper. A soft touch by Ibrahimovic brings the score to 3-0! ... Long wistle is sounded and time is up.

If only the whole globalization is a football field…

There are still 3 British citizens on current Arsenal team.

Saturday, February 25, 2006

Tragedy of The Commons: Downloading Movie

by Alief
Salah satu hal yang paling kami (Norway's Folks, saya+kak dewa) banggakan di student housing NULS adalah fasilitas internet 24 jam, 7 hari seminggu, 10 Mbps di kamar masing-masing. Semua jadi indah karena hampir semua bisa kita dapatkan di dunia maya ini. Dari mengunduh jurnal - jurnal yang dilanggan oleh kampus, sampai dengan tindakan - tindakan ilegal khas negara berkembang, mengunduh lagu, majalah dalam format pdf dan yang paling menyenangkan FILM baru. Pernah suatu masa kak Dewa dengan bangga bercerita, di kala Star Wars paling baru belum tayang perdana, dia sudah asyiknya menonton hasil mengunduh di internet. Saya rasakan kegembiraan itu juga akhirnya disini, semua film baru, sebut apa saja, mulai Harry Potter-Goblet of Fire, The Chronicles of Narnia, sampai terakhir Munich, kami tonton dengan kualitas DVD dengan cara yang sama.
Tentu, kami bayar sewa bulanan flat yang termasuk di dalamnya fasilitas internet tanpa batas ini. Dan sebagai orang timur yang suka berbagi kebahagiaan, kadang kala saya membagi informasi cara mengunduh ini kepada teman - teman flat satu gedung. Saya mengira informasi ini layak dibagi karena dia adalah public goods. Suatu kebodohan, karena saya baru menyadari bahwa informasi ini berada di posisi common goods.
Ekonom mengelompokkan barang berdasarkan sifat rivalry dan excludability (mungkin ada yang bisa menemukan padanan kata yang tepat di bahasa Indonesia?). Jika ia secara bersamaan rivalry dan excludability, ia adalah private goods. Jika ia bersamaan non rivalry dan non excludability dia jadi public goods (contoh:TNI, Polisi). Yang sumir diantaranya sedikit rumit: rivalry saja tapi non excludable disebut common goods (contoh: SDA), dan excludability saja-non rivalry disebut club goods (contoh: klub). Awam, seringkali club goods dan common goods dimasukkan ke dalam public goods.
Kembali ke cerita, informasi tentang film gratis ini mengundang banyak orang untuk ikut bergabung dan memaksimalkan konsumsi. Beban jaringan gedung makin lama makin besar, dan bulan ini jaringan harus putus beberapa kali karena overload. Ekonom percaya there is no free lunch, sesuatu yang nyaris gratis ternyata harus dibayar dalam bentuk lain, dalam hal ini jaringan yang putus dan, untuk saya pribadi, kesal luar biasa karena saya berasa jadi ekonom paling bodoh sedunia.
Namun pengalaman saya adalah hal kecil dibanding tragedi kemanusiaan dalam Tragedy of Easter Island yang mengilhami paper terkenal Tragedy of the Commons. Keterbatasan sumber daya alam, populasi yang meningkat, dan kesalahan memposisikan sumber daya alam dalam perekonomian membuat penduduk satu pulau punah setelah sebelumnya terjadi kanibalisme untuk bertahan hidup.
Ah, saya baru sadar arti mimpi saya beberapa hari ini. Ada orang tak henti - hentinya mentertawakan saya. Mungkin dia Thomas Robert Malthus...

The Political Economy of Venice Carnival

by Berly

My first knowledge about Venice was from Donal Duck comics from childhood time. It is suppose to be a place where a romantic couple (even though Daisy Duck could be annoying some times) leaving a masked carnival to get into a gondola slowly moving in the canals while listening to the gondolier (yes, it’s how they are called) singing o’ sole mio.

So it is quite a disappointment to visit Venice and find the gondolier are not singing (by the way, you’ll need 50 euro for a ride) and gondola is just an over-glorified canoe/getek.

But the masked carnival is way underrated. Since my university organized a daytrip, I went there last week for the opening of the carnival.

Amidst all the captivating sights and hurly-burly of thousands of exuberance tourist, this extravagant carnival is a resulted from proper response to market failure.

Imagine your city has a long history of certain activity that can be re-enacted and bring tons of tourists (read: profit) but some money is needed to organize the festival. Those elaborate costumes, artist performances and massive stage do not come for free. Since the cost of organizing the festival is much less than the benefit from tourist then wouldn’t each citizen of the city (assuming all will benefit, quite true in the case of Venice) will hurry to contribute right?

Wrong! The benefit of carnival is felt to all through higher sales of handicraft gallery, souvenir shop, restaurant, etc (which Venice are full of) but each is better of if a carnival is set up without they are paying for it. Why not let others pay and just sit down waiting for the tourists to come?

This is a classic case of public good where the voluntary free market will not provide the best solution since the money collected will be below the optimal level. A public good is a something that once already set up (ex: bridge) can not limit the use only for those who pay for it (hence, free rider). The free rider problem is so severe that even neo-classic school (the poster boy of economics) is admitting it, albeit putting the topic in obscure last pages used to be skip by lectures catching deadline on covering more “important” topics.

Here is a description from the official website
“The Carnival of Venice officially began in 1296, when the Senate of the Republic authorized the carnival with an edict declaring the day before Lent as a day of celebration. After a break of almost two centuries, the traditions of the carnival were recovered by the Municipality in 1980 and since then the event has been held with great success each year”

So, it takes a government to start it all. There is roughly two ways to deal with public good, either to make it totally private or totally public. The government (except when under occupation, Venice always been a republic with elected government) has the coercive power to issue taxes and gather the needed money to cover the cost of carnival. Mancur Olson (The Logic of Collective Action) and Amartya Sen (Hunger and Public Action) have pointed out the possible divergence between private and public actions long time a go.

Another interesting feature of this carnival is the theme, which is “The Dragon and The Lion”. The Winged Lion is the symbol of Venice. The Dragon? You guess it right. It’s for China. Even a 710 years old tradition can not ignore the newly awakened economic power of middle kingdom.

Enjoy the weekend.. It’s carnival time… La dolce vita!

Thursday, February 16, 2006


Kantin FE Depok: a place for "ser-san" discussion of Depok cross continent generation. We served various foods and drinks of topics, with free 'musik kantin' and 'puisi air mancur', plus some garink-nomics stuff.

Just sit, eat and read...

"Keset!" (read: Welcome)