GMO Memories

All the talk about nutty California regulations around GMO labelling reminds me of the summer of '98.

I'd only applied to George Mason University for grad school and I sure wasn't going unless I was funded. I picked up a job as legislative assistant in M.P. Howard Hilstrom's office in Ottawa; he was pretty happy to have me on only for the summer if GMU funded me or to continue on if not. He was the Reform Party Agriculture Critic, newly elected from Selkirk-Interlake. My undergrad had been a double honours in economics and politics. Hilstrom won by a pretty slim majority, so one of the first things I started working on was getting stuff out to the riding showing what he'd been doing in Question Time and the like - using the Franking privilege to send out as much persuasively informative but still non-partisan material as seemed reasonable. But the one policy area I got to play around with a bit was GMO labelling.

There was some pressure from some parts of the party membership to endorse mandatory GMO labelling. And there wasn't anything on it in the Blue Book - the set of policies endorsed at the conventions that gave the party line. So I got to write up something for the interim. I have no clue what happened to it afterwards; it was one of the last things I finished before heading back to Manitoba to pack up to drive down to Fairfax, Virginia. But if my memory isn't too terrible,* the bottom lines were something like:

• Markets in organic foods flourish (where not constrained by supply management) despite there not being "Includes Chemicals!" labels on everything; guaranteed GMO-free products should similarly attract a price premium among those who want that kind of guarantee;
• Mandatory "Includes GMO" labels will unduly scare shoppers who expect that the government only labels things that are dangerous; there's no evidence that GMO-foods are dangerous;
• There would be a role for government in standard consumer protection "truth in labelling" regs to help ensure any GMO-free labels were not fraudulent;
• The precautionary principle can't be the basis for rational policy.

I don't know whatever happened to the short piece I wrote. Since then, the Reform Party merged with the Progressive Conservative Party and the merged Conservative Party became the government. And Canada hasn't done anything nuts yet on GMO labelling. I like to think that I helped. Just like I like to think that the spare tiger-protection rock that I left near Parliament is responsible for the complete absence of tiger attacks on Parliament Hill since 1998. Some harmless almost-certainly-untrue beliefs do provide utility, if only via prospect theory.

The other bit of news that reminds me of the summer of '98: fishermen from the northern basin of Lake Winnipeg are finally getting more vocal about the Freshwater Fish Marketing Corporation. The FFMC is a strange little marketing board: it has the sole legal right to purchase fish caught commercially in parts of western Canada. It looks like they've rebranded themselves as "Freshwater Fish". From their FAQ:

Freshwater Fish is the centralized marketing body that buys, processes and markets all fish caught on a commercial licence in Manitoba, Alberta, and the Northwest Territories. We operate packing stations both directly and with agents throughout the regions and run a processing plant in Winnipeg. We do not issue fishing licences, set quotas or regulate opening and closing dates for the fishing season.

Now, the fishermen at the south end of the lake, at least in '98, didn't seem opposed to the FFMC. But the guys up north who'd suffer spoilage in getting their product to the packing plant and who weren't legally allowed to set up their own processing facility, well, they didn't like it. Nor should they have.

The case for abolishing the FFMC's monopoly was every bit as good as the case for abolishing the CWB's monopoly. Howard never looked particularly comfortable when I'd point that out - Reform was pushing hard for marketing freedom for Western Canadian grain farmers stuck under the CWB. But he had to get re-elected in Selkirk-Interlake, not in Churchill. James Bezan represents that riding now and has been critical of FFMC; I wonder what's changed.

* Whatever files I had are somewhere on an Intel 486 dx 2/66 that was almost destroyed by the time I upgraded. Fried keyboard I/O chip so I had to push hard on the letter A to bend the motherboard enough to make the connection if I wanted to use the laptop's keyboard; all storage on an external Jaz drive. I doubt I could pull anything out of it even if I could find all the bits.

A hopefully concluding note on the price elasticity of alcohol

A condensed version of the letter I'd sent to the Press appeared in its letters section last week. My shortened letter:

In Monday's Press, Doug Sellman argued that differences in our interpretations of Chris Auld's study on the effects of minimum prices on consumption hinged on that the clause "relative to other drinks" was missing in one journalistic interpretation. This is hardly the case.

The Sellman press release said "A recent Canadian study has shown that a 10% increase in the minimum price of alcohol reduces its consumption by 16% relative to other drinks." As this statement was interposed between sentences noting the effectiveness of minimum prices in reducing consumption of alcoholic beverages, the reader could be forgiven for drawing the conclusion that the study Sellman cites finds that large a reduction in consumption of alcoholic beverages relative to non-alcoholic beverages. However, "other drinks" here did not mean that.
The sixteen percent estimate instead tells us what happens to, for example, beer consumption when the price of beer increases substantially and consumers then instead consume wine. It is highly misleading to present this as the expected effect of an across-the-board increase in prices.

It is especially misleading when the cited study did provide an estimate of the effects of minimum prices: a minimum price that lifts all prices by ten percent would decrease aggregate consumption of alcoholic drinks by only 3.4%. Indeed, Chris Auld, the economist responsible for the empirical analysis in the work cited by Sellman and Connor, writes in comment on my blog, and subsequently confirmed by email: "Eric, for the record, I agree with your interpretation, and I think Sellman and Connor's wording is very misleading." 

Doug Sellman and Jennie Connor's reply in Monday's paper this week:

"Dr Crampton continues his attack on us and does not admit that he made a mistake in quoting from an incorrect secondary source (Sept 11). But he does downgrade the charge from "screamingly wrong" to "very misleading", and if he were to take several more deep breaths he would realize we are essentially in agreement. We have said often over the past three years that there is no magic bullet to change the heavy drinking culture and the harm that results from it.

Although raising the price is probably the most effective and easily enacted measure the Government could put in place, it is not going to achieve the degree of change that is needed on its own.

However, the fact that a 10 per cent rise in minimum price results in a 3.4 per cent decrease in aggregate consumption should not be dismissed as trivial.

A reinforcing set of alcohol reforms, involving marketing, accessibility, purchase age and drink driving, in addition to raising alcohol prices, is likely to be required to bring about substantial change to the out-of-control and damaging state of alcohol use in New Zealand."

I continue to fail to see how there is any relevance in whether one includes "compared to other drinks". If they'd said "compared to other alcoholic drinks", then I'd have been perpetuating a misquoting. Recall that "other drinks" here means other categories of alcohol, not fruit juice. Keeping it in only clarifies things for those readers who knew that Auld et al meant "other alcoholic drinks" but sure doesn't help things for those who didn't know it.

Further, it's Chris Auld that said "very misleading". I'd said, and continue to say, "screamingly wrong". I was just space-constrained in the letters section.

If I had to guess what happened in the Sellman and Connor press release, I'd guess something like the following - I could pretty easily be wrong though and would happily take correction. Sellman and Connor both got mad that John Key said minimum pricing wouldn't do much to curb heavy drinkers' consumption, they ran a Google Scholar search to find some estimate they could use to beat him up with, gave the paper the most cursory skim to find a line they could use, and then ignored the rest of it. They might not have even noticed the 3.4% estimate further down the paper.

But even on this fairly benign story, there's just a shocking underling failure to put the number in context. Again, if you look at Wagenaar's meta-study, you just can't find a single estimate from any of the 100+ papers surveyed that puts alcohol demand as being relatively price elastic (ie absolute elasticity value  > 1.0); it's all degrees of inelasticity. And Sellman and Connor were happy to jump on a number saying alcohol's not just price elastic, it's really really price elastic. You simply cannot have any familiarity with this literature and expect that a price elasticity of -1.6 could possibly be right. It would be like claiming that acceleration due to Earth's gravity is fifty meters per second squared. You can't know anything about physics and think it plausible that acceleration due to gravity on Earth is fifty meters per second squared; you can't know anything about alcohol economics and think it plausible that the price elasticity of demand is -1.6. It's about that level of magnitude of wrong. And it's hardly "dismissing" the effects of gravity to point out that it's only really 9.8 meters per second squared either.

And this pair are the country's go-to experts on the evils of the booze.

Banning the bulb - the information critique

I'd noted a few problems with banning incandescent lightbulbs. First, we can't be sure that one bulb is really friendlier than another without very comprehensive information on how they're manufactured; second, where New Zealand's ETS has things roughly right, at least when it comes to power generation, it's pretty hard to make a case for banning lightbulbs.

Bryan Walker notes a couple of studies suggesting that the cheaper-to-run bulbs are also friendlier to manufacture:

However I had a look to see what I could find, and came across this assessment of CFLs from a writer initially inclined to be sceptical about them, and this report on LEDs. It doesn’t look to be an issue.

A commenter at Offsetting found this one too.

I've no particular dog in this fight; if CFLs and LEDs are friendlier to manufacture, so much the better. But I'm still not sure that it's actually knowable. For example, Bryan's first link provides this table:

Here's a summary of the embodied energy in a light bulb (all numbers represent energy in kWh):

	CFL	Incandescent	8 Incandescent bulbs
Glass	0.17	0.11	0.88
Plastic	0.68	0	0
Electronics	0.66	0	0
Brass	0.18	0.18	1.44
Operation*	120	60	480
Recycle**	1.69	0	0
Total	123.38	60.29	482.32

* This assumes the CFL bulb operates for 8000hrs and the incandescent bulb operates for 1000hrs
** This assumes that the energy required to recycle a CFL bulb is equal to its production 

Let's think about the plastics in the CFL and assume that the table has everything right about the direct energy costs of making plastic. But what about the energy costs of the machines that had to be bought to make the plastics? What about the costs of the machines that made those machines? We'd need to know everything about all the materials that go into all of the pieces of equipment that make the machines that make the machines that make plastics, and then everything involved in the materials used in making that prior set of machines, and so on all the way back.

Read Leonard Reed's I, Pencil. If a pencil's that hard to figure out, an LED bulb isn't going to be easier.

That's just the information problem on the supply side. What about heterogeneous customer demand based on their having very different uses for lightbulbs in different places? In large parts of the country in large parts of the year, waste heat from incandescent bulbs is not waste. It's just a less efficient way of partially heating your house. When I spend a dollar in power heating my house with my lightbulbs, I'm wasting about fifty cents if my heat pumps are twice as efficient as radiant heat; I'm not wasting the whole dollar. I don't want CFL bulbs in some outlets because they take just too long to wake up and provide light; in other spots in the house, it doesn't matter if it takes a couple of minutes to get useful lighting levels. A ban says there is no possible reason for a consumer to prefer an incandescent bulb that can outweigh the difference in power cost, and that just isn't true.

Walker continues:

Crampton’s second point was that an ETS which is functioning well removes the need for any regulatory interference in the market. “If power prices incorporate carbon charges via the ETS, then there’s no real economic case for pushing consumers to choose bulbs they don’t want.” He goes on to say that if the ETS isn’t producing the desired effect the answer is to improve the ETS, not make piecemeal interventions. It crossed my mind when I was writing the post that if the ETS was functioning at a level designed to drastically reduce carbon emissions there mightn’t be a need to bemoan the Government’s action on incandescents. But it is not functioning at that level, and the Government seems determined to ensure that it never will, or will only so far in the future as to be much too late.

If the ETS is broken and unfixable, then you can start making second-best cases for all kinds of stuff. But I'd thought it was least broken when it came to electricity generation.

But should New Zealand's ETS really go beyond that which everybody else is doing? "Drastically reduce" seems a pretty tough standard. Maybe it's the right one if everybody does it at the same time and agrees to be bound by it, but surely NZ going it alone in pushing for drastic reductions does a lot more to ruin the NZ economy than to delay global warming; we'd have to expect the rest of the world to be remarkably strongly swayed by New Zealand's example to expect otherwise. And that's just not going to happen so long as the mess in Europe and the looming potential economic mess in China are the headlines.

Walker continues:

Reining in carbon emissions has become a matter of high urgency, far outweighing concerns about government intervention in the economy. For that matter the ETS itself is an intervention, designed in its original intention to make markets assume the environmental costs which left to themselves they ignore. I see no reason why it should not be accompanied by other government directives which ensure that markets are not permitted to operate in areas that clearly slow the transition to a decarbonised economy.  We accept government mandates in many parts of the economy such as the compulsory insulation of new buildings and we rue failures in regulation such as allowed the emergence of leaky buildings.

Banning incandescents does not to my mind invoke the spectre of a centrally planned economy. It’s simply part of boundary setting for markets to operate within, a proper function of government and one buttressed by the urgency of the climate crisis.

The terms of the argument I think here have shifted a bit. First, my critique of lightbulb banning wasn't that it was interventionist; rather, that it was a worse regulation than having a working ETS. If the ETS were working correctly, there would be no efficiency case for banning lightbulbs; I'm not even convinced that there is a case for banning lightbulbs given the problems in our actual ETS.

I was hardly making the case that banning bulbs leads to a centrally planned economy. Rather, the knowledge requirements for assessing whether a ban is desirable and being really sure about it aren't far from the knowledge required to make central planning feasible.

If we want a shot at drastic reductions, though, we could do well to take another tack entirely. The ETS imposes some costs on the economy. Not huge ones, but they're real. Ditch the ETS and pour money into ag biotech research into improved pastoral systems for low methane; provide a free licence for anyone to use the resulting research. If it does nothing, then we've hastened global warming by maybe a day a century from now relative to NZ's having kept the ETS.* If it works, we substantially abate global agricultural methane emissions. A small country in the middle of nowhere with little influence might do better with the high variance play


* My baseline assumption here is that if New Zealand as a whole were shot into outer space tomorrow, with no further emissions of any kind, we'd at most delay whatever carbon concentration or temperature milestone we'd have otherwise achieved a century from now by at most two or three days. We're a pretty small dot.

Critique and the customer

If the point of an economic consultancy report is to convince serious officials at Treasury, the Reserve Bank, or the relevant Ministries of the economic case for something, and if the consultancy report has serious errors, you can do good by loudly critiquing it if it is wrong. Those who need to know whether the report is right will check the critiques and, if truth-seekers, will update. I understand that some of the serious folks at the Ministry of Health have strongly updated their views as to the appropriateness of Cost of Illness studies around alcohol consequent to critiques, very correctly noting that cost-effectiveness is the better measure.

But if the point of an economic consultancy report is to excite the hooples and to give a sciency justification for whatever some bunch of rent-seekers is trying to push, then critiquing it loudly only serves to provide advertising: this firm will produce the big shonky but sciency-looking number that your industry needs to get public support for whatever you're trying to push.

"Noise made, overtures to outside interests and enlistment of the hooples’ participation is what this situation demands." Al Swearengen, Episode 20, "Childish Things", Deadwood.

If that's what the reports provide, critiques might make things worse by letting the interests know who's best at exciting the hooples.

Want to show that your industry is the key linchpin for the regional economy? Want to show that your party's policy is the one for advancing economic prosperity? Yelling about how a particular consultancy produces numbers that are great for propaganda but bad for policy only serves to fuel demand where the ultimate audience are the hoopleheads.

What else can you say about a consultancy report that includes this in the concluding remarks?

The biggest cost will be loss of face for the “Mainstream Economists” especially the Bank economists, who have continually told us that this is the panacea: There Is No Alternative.  Their experiment will be at an end.

The audience isn't Treasury, the Reserve Bank, the boffins in the Ministry of Finance, academic economists, or anybody serious. It isn't you, Matt, as correct as your critique may be. Neither is it you, Paul: I watched you writing your critique as I went meta.  It's the hooples. And it's the reason that the New Zealand Economic Association really really needs an annual awards ceremony for the worst piece of economic consultancy work produced in the country every year.

So that the hooples can better be advised of the reputation of certain outfits.

Sell or lease?

Greece may lease some of its sovereign islands to help pay the bills:

As international inspectors in Athens scrutinise the country’s fitness to receive the latest aid payment, Prime Minister Antonis Samaras has said commercial exploitation of some islands could generate the revenue lenders need to see to continue funding the country.

The shortlist includes islands ranging in size from 500,000 square meters (5.4 million square feet) to 3 million square meters, and which can be developed into high-end integrated tourist resorts under leases lasting 30 years to 50 years, Mr Taprantzis said.

Legislation needs to be passed to allow development of public property by third parties and reduce the number of building, environmental and zoning permits needed before the plan can proceed, Taprantzis said.

Outright sales have been ruled out because the returns for the Greek state wouldn’t be higher than a leasehold arrangement, he said. Greece will attract more investment if an island is turned into a resort, he said.

I believe the explanations later in the story that complete sales would be politically difficult. But I sure don't believe that leasing out the islands would raise as much as selling them. As I'd written back in March:

Greece has somewhere around 6000 islands in one of the most beautiful parts of the world. Islands of legends and Greek Gods and stuff. Islands that, you'd expect, would be worth something to somebody. Some of them are privately owned and do trade. Here's one place you can go to buy one.

But all those islands are encumbered with Greek sovereignty. Own the island, own the  entanglements of the Greek state that make development, well, hard.

First of all, to date it is rather hard for someone to develop a private island because of the Greek state bureaucracy and the domestic Archeological Agency, which is stringent in its examination of every case that involves an island that may have antiquities of any kind lurking under its soil. 

And that's just for setting up the island as a holiday home. If you have to provide a stool sample to get through the regs letting you set up a web-based business, a Greek Island isn't going to be your first pick for doing anything innovative.

Imagine being able to bid on an island in the middle of the Mediterranean within a short flight of Europe, the mid-East, and northern Africa where Greece wouldn't just hand you title, they'd hand you sovereignty? There has to be a ton of value locked up in those islands that could be released by Greece being willing to relinquish sovereignty. Restrict it to the uninhabited islands to keep things simple, for starters.

Seasteading is cool. But imagine kickstarting it by letting a thousand sovereign islands bloom in the Aegean Sea? 

Leasing out islands with fewer regulatory encumbrances adds some value where the regulatory abatement is credible. But hasn't recent experience suggested that bare-land Greece would be worth more under alternative ownership?

Dispatches from the front: Public Health edition

As semester constraints continue to bind, please enjoy this little interlude in our regular programming. The #PHC2012 hashtag captures tweets from attendees at the 2012 Population Health Congress in Adelaide. A few conference highlights (I'm not attending; I don't get invited to those shin-digs), from attendees via the Twitter feed. I'm surprised that Adelaide didn't collapse under the cloud of smug.

@emmacroager great presentation on using consumer laws for advocacy#PHC2012
— PHAIWA (@PHAIWA) September 10, 2012

What?

Each reduced tonne of CO2 gives $50 of benefit due to reduced health costs #phc2012
— Iordan Kostadinov (@iordaman) September 10, 2012

In Australia? Really? I'd bet pretty heavily against it.

Tony Blakely: should public health really want to keep increasing life expectancy? #phc2012
— richard horton (@richardhorton1) September 10, 2012

#phc2012 interesting presentation on life expectancy. It just keeps rising. Do we want life expectancy to keep going up??? Big question.
— Chris White (@27degreessouth) September 10, 2012

Increases in life expectancy in recent decades have not affected relative inequality: Tony Blakely #phc2012
— CAHA Inc (@healthy_climate) September 10, 2012

Recall Blakely's prior work in this area. [and here]. I like increased life expectancy, so long as it's not achieved by forcing people to lead bland lives. The stream seemed to suggest worries about ecological footprints and life expectancy.

Tobacco eradication is the single most important action public health can deliver to reverse inequality. #phc2012
— richard horton (@richardhorton1) September 10, 2012

@greenperknyc Public think 'public health' means hospitals & doctors 4 their PERSONAL health. How to counter this?? #PHC2012

— Kay (@Murfomurf) September 10, 2012

I'm trying!

Richard Wilkinson: Despite privilege, luxury, and wealth, many ppl miserable and dissatisfied. Wealth does not lead to happiness. #phc2012
— CAHA Inc (@healthy_climate) September 10, 2012

Wilkinson, of The Spirit Level, was keynote. Recall that The Spirit Level was completely debunked by Chris Snowdon (on the right) and is viewed as unreliable by Andrew Leigh. Leigh wrote:

One set of arguments suggests that we should care about inequality for what are called ‘instrumental reasons’. Inequality, some contend, is associated with worse outcomes in areas that society cares about, such as health, crime, savings and growth. This argument is put most strongly in The Spirit Level, by Richard Wilkinson and Kate Pickett. It is an argument that I used to believe. Indeed, I deeply want to be true, but my own research persuades me otherwise.[25] The closer you get to these asserted effects, the more fragile are the findings. If there are negative effects of inequality on those social outcomes, they must be extremely small. (There are also small positive effects. For example, my own work shows that inequality boosts growth, though the trickle-down process is slow.)

And, recall that Justin Wolfers destroyed the "not lead to happiness" result:

Using recent data on a broader array of countries, we establish a clear positive link between average levels of subjective well-being and GDP per capita across countries, and find no evidence of a satiation point beyond which wealthier countries have no further increases in subjective well-being. We show that the estimated relationship is consistent across many datasets and is similar to that between subjective well-being and income observed within countries. Finally, examining the relationship between changes in subjective
well-being and income over time within countries, we find economic growth associated with rising happiness. Together these findings indicate a clear role for absolute income and a more limited role for relative income comparisons in determining happiness.

Back to the twitter stream:

RT @theparentsjury: RT @bustjunkads: Consumerism is greatest threat to sustainability #phc2012 Wilkinson #phc2012
— Kay (@Murfomurf) September 10, 2012

Obesity should be less focused on individual responsibility - Reid (BIG CHEER FROM ME WOOOP!) #phc2012
— Dr Samantha Thomas (@Doc_Samantha) September 11, 2012

"We should be managing food rather than obesity" - social responsibility rather than individual. Papaarangi Reid #phc2012
— Junkbusters (@bustjunkads) September 11, 2012

Prepare to be managed.

Tobacco is the enemy not the smoker. Same sentiment for obesity, stop the victims blaming #phc2012
— Iordan Kostadinov (@iordaman) September 11, 2012

Baum: We have to be brave about advocacy. The history of public health shows things happened because people said this is wrong. #phc2012
— Dr Samantha Thomas (@Doc_Samantha) September 11, 2012

Yes. Very brave.

RT @bustjunkads: Haven't signed our petition for #fatfreetv? Please do #phc2012 communityrun.org/petitions/dema…
— jenni beattie (@jennibeattie) September 11, 2012

I assume they're looking to ban ads for fatty foods and that they're not trying to cancel reruns of Roseanne.

@melkettle Need collective action on "junk" food & their ads. #phc2012
— Kay (@Murfomurf) September 11, 2012

Politicians should not make health policy. We should have an independent body to do this. - Graves #PHC2012
— Dr Samantha Thomas (@Doc_Samantha) September 12, 2012

Ummm.... if they mean an arms-length body like Pharmac for funding decisions, that's totally justifiable. But I'm not sure that's what's here advocated.

Analysis of news articles about alcohol find reporting is trending towards more social disapproval of alcohol #PHC2012
— PHAIWA (@PHAIWA) September 12, 2012

I think this is a KPI for some folks.

Researchers watched 816 music videos to analyse for alcohol content, interesting results! Uni of Otago #PHC2012
— PHAIWA (@PHAIWA) September 12, 2012

Did Otago get a grant for this? Weeping.

#PHC2012 Little branding of alcohol in music videos. Policy could influence funding and when shown on TV.
— Linda Kirkman (@lindathestar) September 12, 2012

And so you have a little glimpse into the world that the Public Health advocates are trying to bring forth.

What can you do with a B.A. in Econ?

Make awesome video games even more awesome, that's what. Valve's hiring another economist:

Economist

Valve’s multi-player games, as well as Steam (Valve’s successful trading platform), have allowed for the spontaneous emergence of complex virtual, yet quite real, economies. These economies are replete with rich trading patterns, fascinating ‘institutions’ (which have also sprung up organically), socio-economic conventions, and, generally, a host of economic phenomena that partly reflect what we observe in the analogue world and partly constitute new and unexplored behavioural patterns.

The task of a Valve economist is to make good use of the incredible wealth of data concerning these social economies, to pose fresh questions about their workings, and to generate methods for converting new knowledge about these economic vistas into tangible ideas that help improve our customers’ experiences.

Duties:

• Research, design, develop, and validate economic models to explain user behavior for all of Valve’s products.
• Design experiments to validate experimental hypotheses for in-game economies.
• Provide insight into short- and long-term behavioral patterns of participants in virtual economies.
• Inform decision-making at Valve by providing quantitative and economic rationale for various lines of inquiry.
• Create new avenues of analysis based on existing economic metrics, as well as generating new domains of data to collect and investigate.
• Collaborate with our business development team to improve the performance of existing pricing strategies and incentives for our customers and partners.

Requirements:

• Graduate degree in Economics or related field
• Advanced knowledge of statistics
• Four years experience with:
  • Econometrics/data-mining or related field
  • Relevant analysis techniques that inform the creation of economic models

Recommended:

• Proficiency in one or more of the following programming languages: C++, SQL, PHP, or equivalent

Apply for this position >

Now, what do I mean another economist?  Yanis Varoufakis has been working at Valve and blogged on his experience. I'm not sure if he's still there, but the blog doesn't say that he isn't. Here's Varoufakis on his first visit to Valve:

Within hours, an agreement was reached: I would become, in some capacity (that was to be hammered out later), Valve’s economist-in-residence. Valve is not the first video game company to have brought an academic economist on board (e.g. EVE Online were the first to do so, recruiting Eyjólfur Guðmundsson – whom I would like to thank for making my name sound almost easy-going…). My intention at Valve, beyond performing a great deal of data mining, experimentation, and calibration of services provided to customers on the basis of such empirical findings, is to to go one step beyond; to forge narratives and empirical knowledge that (a) transcend the border separating the ‘real’ from the digital economies, and (b) bring together lessons from the political economy of our gamers’ economies and from studying Valve’s very special (and fascinating) internal management structure.

Academia's a pretty good place. When it's working properly, it doesn't sound all that different from work at Valve, at least according to Varoufakis:

If I were asked my opinion of what Valve’s symbol should be, I would recommend a depiction of a wheel, like those which every desk at Valve comes equipped with so as to enable us to move about the company at will, to join whichever working group we want, to form new ones spontaneously and without seeking anyone’s permission. The said wheel, at least in my eyes, symbolises Valve’s attempt to create, within the company, a successful ‘spontaneous order’ based not on price signals but, rather, on decentralised, individuated, time allocations.

Many enlightened corporations do a song and dance about their readiness to let employees allocate 10% or even 20% of their working time on projects of their choosing. Valve differs in that it insists that its employees allocate 100% of their time on projects of their choosing. 100% is a radical number! It means that Valve operates without a system of command. In other words, it seeks to achieve order not via fiat, command or hierarchy but, instead, spontaneously.

I wonder what Paul Walker would make of this form of organization for the knowledge-based firm. As the New York Times writes:

Mr. Newell said that there was a better chance that Valve would “disintegrate,” its independent-minded workers scattering, than that it would ever be sold.

If the firm is just a bundle of contracts....