Pennies from heaven.

I have realized what the simplest solution to the penny problem is. Since pennies cost more to make than they're worth, I had thought we should just divide our currency by five, and make a penny worth five cents, and so on. A much simpler solution would be to just drop the penny, and stop making the one dollar bill, replacing it with the dollar coin. Every time inflation erodes the value of the lowest denomination coin (except nickels are already more expensive than their face value), you make the lowest denomination bill into a new coin, and stop making the lowest denomination coin.

Book Review: The Gridlock Economy

The Gridlock Economy.

Michael Heller has a very good idea--that the tragedy of the commons has an equal and opposite counterpart, the tragedy of the anticommons. The tragedy of the commons is wasteful overuse of a shared resource. The tragedy of the anticommons is wasteful underuse of a privatized resource. This underuse comes about when ownership of a resource is divided in too many ways, and that a more profitable use is blocked by rent-seeking of the smaller parties. He gives examples of fragmented land use, bio-patents, and unbundled property ownership.

As with all books that have one good idea, it gets very repetitive. Comparative case studies are like that, but illustrating the same principle over and over to someone who understood the concept in the first few chapters is annoying. I should have stopped reading, but I didn't.

Heller also gets off track towards the end, as he discusses legal gridlock, ala Hernando De Soto (to whom he gives a nod). De Soto's work is distinct from Heller's, and Heller's attempt to fuse the two creates a misbegotten hybrid. It seems like his idea was too long for an article, but not big enough for a book, so he padded it extensively to get published.