Knowledge that Transforms

Formal proof is presented of an earlier article (Northwestern Univ. Law Rev., 55; 62-95 (Apr. 1960)) in which Meyer Burstein argued that the variable-proportions incentive for vertical integration has relevance for antitrust enforcement. Burstein's proposition also argued that there are alternatives to vertical integration by tying nonmonopolized inputs. It also implies that the economic effects of vertical integration and tying are identical, which raises the question of why the two are treated differently by present antitrust laws. Both are found to improve downstream production efficiency, although the new welfare effects are ambiguous. 16 references.

One of the sophisticated financial arrangements available at your neighborhood bank is Savings. In this plan you are committed to regular weekly deposits until some date in November when all the money is there with accumulated interest to spend for Christmas. It doesn't accumulate quite as much interest as regular savings. The reason people accept less interest on Christmas savings is that the bank protects these funds a little more than it protects ordinary savings. Regular savings are reasonably well protected against robbery, embezzlement and insolvency; and insurance takes care of what protection cannot do. But there is one predator against whose ravages the bank is usually impotent-you. With a Christmas account, the bank assumes an obligation to create ceremonial and administrative barriers to protect your account from yourself. Some people cheat on the withholdingtax forms they fill out for their employers. They understate their dependents, so that the Internal Revenue Service takes more than it deserves all year-a free loan from the taxpayer-in return for which the taxpayer gets a reduced shock the following April. Many of us have little tricks we play on ourselves to make us do the things we ought to do or to keep us from the things we ought to foreswear. Sometimes we put things out of reach for the moment of temptation, sometimes we promise ourselves small rewards, and sometimes we surrender authority to a trustworthy friend who will police our calories or our cigarettes. We place the alarm clock across the room so we cannot turn it off without getting out of bed. People who are chronically late set their watches a few minutes ahead to deceive themselves. I have heard of a corporate dining room in which lunch orders are placed by telephone at 9:30 or 10:00 in the morning; no food or liquor is then served to anyone except what was ordered at that time, not long after breakfast, when food was least tempting and resolve was at its highest. A grimmer example of a decision that can't be rescinded is the people who have had their jaws wired shut. Less drastically, some smokers carry no cigarettes of their own, so they pay the higher price of bumming free cigarettes. In these examples, everybody behaves like two people, one who wants clean lungs and long life and another who adores tobacco, or one who wants a lean body and another who wants dessert. The two are in a continual contest for control; the iistraight one often in command most of the time, but the wayward one needing only to get occasional control to spoil the other's best laid plan. As a boy I saw a movie about Admiral Byrd's Antarctic expedition and was impressed that as a boy he had gone outdoors in shirtsleeves to toughen himself against the cold. I resolved to go to bed at night with one blanket too few. That decision to go to bed minus one blanket was made by a warm boy; another boy awoke cold in the night, too cold to retrieve the blanket, cursing the boy who had removed the blanket and resolving to restore it tomorrow. The next bedtime it was the warm boy again, dreaming of Antarctica, who got to make the decision, and he always did it again. I didn't realize then how many contests of that kind, some pretty serious, I would eventually have with myself, trying to stop smoking, to exercise, to study for an examination, to meet a deadline, or to turn off an old movie on TV. At a gathering like the annual meeting of the American Economic Association most of us are exquisitely aware of that form of academic delinquency that is probably our greatest occupational hazard: We cannot make ourselves write those papers, articles, and dissertations *Harvard University.

There have been a number of points at which anthropology and economics have come to confront one another over the last several decades-development theory; preindustrial history; colonial domination. Here I want to discuss another where the interchange between the two disciplines may grow even more intimate; one where they may come actually to contribute to each other rather than, as has often been the case, skimming off the other's more generalized ideas and misapplying them. This is the study of peasant market systems, or what I will call bazaar economies. There has been by now a long tradition of peasant market studies in anthropology. Much of it has been merely descriptiveinductivism gone berserk. That part which has had analytical interests has tended to

An abstract of this article, from a report by the authors, may be found in EAPA 1: 02316. It is re-announced here because of its better availability in Science. (LMT)

Analysis of longitudinal earning data indicates higher earnings growth for scientists of the same experience but more recent vintage. Theoretical justification for such a relation is suggested, and the implied biases in cross-section data are noted. Because of a basic identification problem, an alternative interpretation, time-experience interaction, is also considered. The general conclusion is that earning growth is not uniform or neutral. There is no simple mechanical method by which lifetime profiles can be inferred from single cross-section data.