Market power and "Running The Numbers"

Recently, I got a copy of Mankiw's Principles of Economics out of the library. (Some light summer reading! Yay!) I'm only 11 pages into the book, and he's already made two statements that I don't agree with:

• Seat belts cause more harm than good (p. 8): The book cites a 1975 study by economist Sam Peltzman, who states that auto-safety laws have produced fewer deaths per accident, but more accidents and more pedestrian deaths. According to Peltzman, this is because drivers who buckle up drive faster and less carefully. The general idea, of which seat-belt laws are a specific case, is known as the Peltzman Effect.
  
  Peltzman's claim that seat belt usage has had an adverse effect on safety is disputed by a paper by Steven D. Levitt and Jack Porter. An article by David Sklansky in the Harvard Law Review also states that Peltzman was mistaken.
  
  
• Rent control policies are harmful (p. 10). I won't argue this point here, other than to point out that nobody is building new apartments any more because builders can get a greater return on their investment by building condominiums. Rent control, or the lack of it, has nothing to do with it. As soon as the condo market becomes glutted - which should happen reasonably freaking soon, given how many of the damned things are going up in Toronto - builders might consider building apartments again.

Page 11 of the book contained a useful definition that I had not heard before: market power. This, according to Mankiw, is "the ability of a single person (or small group) to unduly influence market prices". Mankiw states that well-designed public policies can improve market efficiency if market power is present (which I agree with).

Extremist ideologues would probably make the following claims about market power (neither of which I agree with):

• Certain leftists would claim that market power is the inevitable result of unregulated capitalism.
• Certain right-wing extremists would claim that those who have achieved market power have acquired it because they deserve it. If you don't like it, the argument goes, why not go out and work hard and acquire some market power of your own? (To which I used to reply: success requires talent, opportunity and luck, as well as effort.)

Anyway, I'll keep reading the book, and see if I can pound any more useful information into my mush-like brain. If I do, I'll keep you posted.


Photographer Chris Jordan has created a series of photographs, called "Running The Numbers", which uses large photographic prints to illustrate American rates of consumption and other facts. For example, he has created a photograph of 9 million child's building blocks, which is equivalent to the number of American children with no health insurance coverage in 2007. He has also created photographs of:

• 8 million toothpicks, representing the number of trees harvested every month to make paper for mail-order catalogues;
• 2 million plastic beverage bottles, which is the number of these bottles used by Americans every five minutes;
• 65,000 cigarettes, representing the number of American teens hooked on tobacco every month;
• 11,000 jet trails, which is the number of commercial flights in the U.S. every eight hours;
• 426,000 cell phones, which is how many phones are retired in the U.S. every day;
• 29,569 handguns, which is the number of gun-related deaths in America in 2004;
• 1.14 million brown paper bags, which is the number of bags used in the U.S. every hour;
• 60,000 plastic bags, which is the number of plastic bags used every five seconds.

The most startling photograph is his Cans Seurat, which is a reproduction of a Seurat painting made from 106,000 aluminum cans. This is the number of cans used in the U.S. every thirty seconds.