Douwe Osinga's Blog: December 2005

Wednesday, December 14, 2005

Black Rebel Whiskey (Grass)

We're back from two weeks in Thailand and Laos. It was excellent as expected; This part of Asia has this perfect mix of tourist friendliness and mild exotic. One thing that was sort of remarkable, however, is how copied the guesthouses in Laos were (and the same thing was noticeable in Cambodia)

What I mean is that for example in Vien Vang, all guesthouses had little platforms for the guests to sit on with cusions and small couches on top of them. Very cozy, but quite unique for Vien Vang. Could be that it is part of the local culture, but more likely is that one guy came up with the concept and it was a success, so everybody copied it. The menus are the same thing; extremely similiar. Banana pancakes everywhere, but no banana poridge (another breakfast item popular with the backpack crowd). There were three places that continuously played Friends reruns on their DVD installation.

So what is this, a very efficient market where innovation spreads really fast or Intellectual Property Theft? I am tempted to go with the first, but it must be frustrating if you are the innovating guy in the backpackers town. All your innovations copied in just no time with people hanging around for only a few days so not much of a chance to build up a loyal customer collection either.

About the title of this post, it is from a Laos menu. At first I though that it was some sort of exotic Whiskey from the Indochina war times, made from jungle grasss. As it turns out, it was just some Asian confusion with Rs and Ls, and it should read Black Label Whiskey and Grass means nothing more than 1 glass of the stuff.

Saturday, December 3, 2005

Why high taxes don't make people work less hard

In conservative circles and more and more outside of them, it seems to be a popular thesis that lowering taxes is good because it gives people more of incentive to work; they get to keep more of the money they make, so clearly they'll work more. Sounds plausible, but if you think about it, it is of course rubbish. The other way around is much more likely; the higher the taxes, the harder people work, all things equal.

In the end people don't care about taxes and all that. They only care about how much money they make. And when it comes to money, it is just like anything else. The more you have of it, the less extra happy another dollar will make you. If you are starving then you'll gladly work long long hours to make enough not to starve. If you are quite affluent already, you need quite big incentive to start working more (luckily enough are society comes build in with all kinds of tricks to make us work harder anyway).

So what happens if we increase taxes to say 90%? It just means that people have only one tenth of the money, so they are a lot poorer and will suddenly have to work again for a car instead of getting one anyway.

The problem of course is with the other side of equation; governments have a tendency to spend money more wasteful than average people. If you raise taxes you put more money in the hand of the government and if then that money is wasted, the economy suffers. But it is not the low taxes for the rich that make the rich work so much harder that in the end everybody profits.