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From an email sent to author Tyler Cowen by a reader:
Oh, and here’s a tip I hope you never need: if your car is ever stolen, your first calls should be to every cab company in the city. You offer a $50 reward to the driver who finds it AND a $50 reward to the dispatcher on duty when the car is found. The latter is to encourage dispatchers on shift to continually remind drivers of your stolen car. Of course you should call the police too but first things first. There are a lot more cabs than cops so cabbies will find it first -and they’re more frequently going in places cops typically don’t go, like apartment and motel complex parking lots, back alleys etc. Lastly, once the car is found, a swarm of cabs will descend and surround it because cabbies, like anyone else, love excitement and want to catch bad guys. Cabbies know a lot of stuff*. I found a traveling shoplifting ring in Phoenix once. Professional shoplifters always take cabs. So do strippers going to work but that’s another story.
An excellent recent episode of the BBC Radio 4 math/current affairs show "More or Less" dramatized "The Parable of the Ox," a short article by John Kay originally published in the Financial Times (
paywalled, alas, or I'd link to it available from Kay's site). Fans of James Surowiecki's Wisdom of the Crowds will know the first part of this story -- wherein the average of several guesses about the weight of an ox was more accurate than the guesses of any of the experts in the crowd. What this podcast and the article adds is a coda about how the use of "guesses" (or stock trades) as a way of weighing the ox quickly departed from guesses about the weight of the ox (or the value of a firm) and turned into guesses about other peoples' guesses about other peoples' guesses -- a financialized system that soon has no connection to the real economy or the real ox. And it ends, predictably enough, when the ox dies.
The Parable of the Ox [More or Less]
The parable of the ox [John Kay]
NPR's Robert Krulwich circled this bright spot on a night-time satellite image of the United States. As Krulwich points out, this cluster of lights is new — it wasn't there in 2005. And it's not a city.
Instead, that bright spot is a shining reminder of the natural gas boom. What you're seeing are the lights from drilling rigs and flares burning gas.
Brian sez, "I made an animated presentation about broadband and mobile data caps - specifically, how they discourage innovation, how the excuses used to justify data caps don't hold water, and the real reasons that ISPs and mobile providers are moving towards caps."
This is really good stuff. It might need an edit for time, but if you've got 11 minutes, this is what you should spend 'em on.
I've written an essay on how copyright enforcement laws let entertainment companies get away with paying less to artists for the O'Reilly Tools of Change blog. The ToC folks asked to to contribute something related to the keynote I'll be doing at their annual conference in NYC next month, as part of my tour for Homeland, the sequel to Little Brother.
In other words, by asking governments to ascribe liability to these “intermediaries” (services that sit between creators and audiences), the entertainment industry is demanding that the Internet be scaled back to something that’ll fit in cable TV’s bathtub. Something where only people with a lot of capital and clout can speak and be heard. Something where big entertainment companies can use their money and power as a wall to stop anyone from challenging their pride of place.
When a big star goes into a record-company negotiations, she isn’t limited to saying, “Sorry, that deal’s not good enough, I’ll see what I can get across the street at your competitor.” Now she can say, “That’s not good enough, I can do better on my own, like Trent Reznor did.” Or, “That’s not good enough, I can hook up with a new kind of music business,” like Madonna did. But only if the intermediary liability is small enough to allow all these different kinds of companies to clamor for artists’ attention and products.
When a successful beginner like Amanda Hocking or EL James comes before a big publisher who wants to take her from indie to pro, the worst deal they can offer her has to be better than the best deal she could get for herself, or from one of the new startups.
Put it another way: There’s never been a time when tight controls over distribution were good for artists: fewer labels always means worse deals for musicians; fewer studios always means worse deals for filmmakers, actors, and other film professionals; fewer publishers always means worse deals for authors.
When it was just rich people going, it wasn’t about just getting a better job, because you were already rich, you already had the entré into the better job. You could already do unfunded apprenticeships and your parents’ friends were the people offering you the unfunded apprenticeships. You had a good five ways within the system. But now it’s a market transaction, and once it’s a market transaction we start applying cost benefit analysis to it. We start saying, well if the university degree earns you so many pounds, then it makes sense to start talking about you paying so many pounds. And if the objective here is to take people whose lifetime income expectancy was so many pounds, and make it a little bit higher –– which is what we call social mobility –– then why shouldn’t that be a virtuous cycle and they pay back into it. That way the university can expand the number of students they take on and all the rest of it, right?
The problem with that is that it’s become a Ponzi scheme, especially in America. We haven’t quite gotten there here. But in America, you have this crazy thing where it is somewhat true and it’s also universally received as true, that you can’t get a good job without a university degree. It’s also the case that universities, including many state colleges –– that are actually owned by the public –– can act as loan originators, which is to say they lend you the money but where those loans are then backed by the federal government. They can lend you any amount of money because there’s no risk to them because the government will take the loan off their hands. Those loans are then further secured by the federal government when they float them as bonds. So you have this weird perverse incentive where the universities, the more they charge the more they get –– which is a bit weird right? Because in real market economies, the more you charge the more you get up to a point, and then people start going, wait a second, that’s not worth it anymore, and they stop paying in. But if I tell you that you can’t get a job unless you get a degree, and then I tell you that no matter how much the degree costs I can get you a loan for that much, all of a sudden you start getting takers for those crazy propositions and that starts to look like a bubble, like a pyramid scheme.
My latest Guardian column is about positive externalities, the value that bystanders get from the stuff you're already doing:
That's the crux of this irrational fear of positive externalities: "If something I do has value, I deserve a cut." It's one thing to say that someone who hires you to do a job, or purchases your product, should pay you money. But positive externalities are the waste-product of something we were already going to do. They're things that you have thrown away, that you have thrown off, that you have generated in the process of enjoying yourself and living your life.
The mania to internalise your positive externalities is the essence of cutting off your nose to spite your face. I walk down the street whistling a jaunty tune because I'm in a good mood — but stop as soon as I see someone smiling and enjoying the music. I keep my porchlight on to read by on a warm night, but if I catch you using the light to read your map, I switch it off, because those are my photons — I paid for 'em!
Worse still: the infectious idea of internalising externalities turns its victims into grasping, would-be rentiers. You translate a document because you need it in two languages. I come along and use those translations to teach a computer something about context. You tell me I owe you a slice of all the revenue my software generates. That's just crazy. It's like saying that someone who figures out how to recycle the rubbish you set out at the kerb should give you a piece of their earnings. Harvesting positive externalities involves collecting billions of minute shreds of residual value – snippets of discarded string –and balling them up into something big and useful.
If every shred needs to be accounted for and paid for, then the harvest won't happen. Paying for every link you make, or every link you count, or every document you analyse is a losing game. Forget payment: the process of figuring out who to pay and how much is owed would totally swamp the expected return from whatever it is you're planning on making out of all those unloved scraps.
My latest Guardian column, "Why the entertainment industry's release strategy creates piracy," looks at the weird entertainment industry practice of defending their right not to sell us the things we want to buy, and the rather more odious practice of asking the public to foot the bill for this strategy:
In a real marketplace, the ability of entertainment companies to stagger their releases would be curtailed by the willingness of customers to put profits ahead of their own desire to watch TV or movies when the rest of the world is talking about them on Twitter and Facebook – and not six months later, timed to coincide with a bank holiday. However, by equating watching TV at "the wrong time" with theft, the entertainment companies have been pretty successful in convincing politicians that the public should foot the bill for this decision through costly market interventions, up to and including a branch of the City of London police charged with finding copyright infringers.
Which brings us back to the empirical evidence on lawful alternatives and piracy rates. The fact that people eschew the black market when there is a legitimate alternative tells you that they're not thieves looking to steal. Rather, like the notional customer who sneaks in her own fizzy drinks rather than paying for the cinema's insane markups, they are potential customers whose purchases have been forfeited by a business that has violated rule number one: offer a product that people want to buy at the price they're willing to pay.
Some months ago, Chris Anderson wrote to me to let me know that he was working on a book called Makers, and given that I'd written a well-known novel on similar themes with the same title, did I mind? Of course I didn't -- for one thing, having already published many stories with the same title as famous stories that came before them, I was hardly in a position to object! But more importantly, I was interested in Anderson's take on the subject.
I've thoroughly enjoyed Anderson's two earlier works on economics in the Internet age (The Long Tail and Free). Anderson -- formerly a tech editor for The Economist -- has got a very good grasp of economics and business; but as the long-time editor-in-chief at Wired, he wasn't afraid of visionary pronouncements about technology either. He's also got a background as an indie rocker, and has a good grasp of the rewards and challenges of a life in the arts. Though I've disagreed pretty vociferously with some of the things he's had to say in the past, his work has provoked more nods from me than head-shakes, and when I've disagreed with him, it's been for chewy, substantive reasons that were worth exploring.
I've just finished a copy of (Anderson's) Makers -- having come to the book a bit late due to my own book-tour for Pirate Cinema -- and it delivered on all the promise of Anderson's earlier work, and then blew past them. Simply put, Makers is a thrilling manifesto, a call to arms to quit your day job, pick up your tools, and change the future of manufacturing and business forever. It's a recipe for a heady cocktail of open business; free software; low-cost, global coordination; and community cooperation that Anderson credibly suggests will forever change the world.
Anderson's Makers is a tour through all the different ways that manufacturing in quantities of 1-10,000 units has been transformed, and how this changes the very nature of entrepreneurship and creativity. Using diverse example from modern times -- and comparing them with manufacturing stories from the past century -- Anderson shows how 3D printing, laser-cutting, Internet-based custom fabrication, free and open development models, and crowdfunding have made it possible to make something, make it better, sell it, make it better still through co-development with customers, scale up and up, and serve your needs and the needs of your community.
He doesn't gloss over the challenges of this sort of thing, but he does show how a world where hardware is (nearly) as cheap to prototype and share as software means that the traditional gatekeepers to creativity -- established manufacturing giants, retail titans, and massive distributors -- are losing their stranglehold on the market. This means that you can do something that makes your life better, you can turn it into a business, and others can turn it into a business, too.
Because this is Anderson, this is firmly a business book, and that's probably a good thing. Anderson's bottom-line practicality is likely to lend the idea of making a certain boardroom credibility that other, wider-eyed literature on the movement lacks. That said, this, more than any of Anderson's books, acknowledges the role that passion, love, community spirit and personal satisfaction play in the world of innovation. I was a little disappointed that Free glossed over the ethical and personal reasons that people worked on free and open systems, but in this volume Anderson's much more in touch with his indie-rock history than in previous outings, and it's a very welcome addition.
For all that, there's still a wide streak of makerish practicality here, and the chapters are only a few steps away from being full-blown HOWTOs for doing it yourself (or, more importantly, doing it with everyone else who cares about the same stuff as you). And Anderson certainly practices as he preaches: not long after the book's publication, he quit his job at Wired to run his DIY Drone business full-time.
This is really Anderson at his finest: a blend of economic big-picture stuff and nitty-gritty, hands-dirty making. I can see it being a perfect kick in the bum for any number of frustrated makers struggling in a crappy economy and wondering where to take their lives.
The Campaign to Fix the Debt is a coalition of hyper-rich CEOs and bankers that's been formed to campaign for social safety net cuts, seizing the "fiscal cliff" moment as a chance to change the public debate and protect tax breaks to the richest 1% while slashing services upon which the rest of the country relies. Alternet's Lynn Parramore provides a handy crib-sheet for translating the Campaign's manifesto to plain English:
1. “Fix” means cut: When they say “fix” Social Security, they mean cut Social Security. Fixers want to convince the public that a well-managed, hugely popular program that does not add to the deficit (it’s self-funded) is somehow in crisis and requires intervention in the form of various cutting schemes. They seek this because many of the rich do not want to pay taxes for Social Security, and financiers want very much to move toward privitization of retirement accounts so they can collect fees on such accounts.
2. “Reform” means rob. When the say “reform” the tax code, they mean “make taxes even lower for the rich.” The wealthy do not pay their fair share of taxes in the United States, which is a major reason there is a large deficit in the first place. When the very wealthy pay lower tax rates than ordinary working people, the result is an increasing redistribution of income upward that puts the U.S. in the top 30 percent in income inequality out of 140 nations, according to the Central Intelligence Agency. We’re a shameful #42. Income inequality is not only unfair, it’s dangerous and makes society unstable.
3.“Bipartisan” means all of the rich. Fix the Debt is a pro-business ideological movement pretending to be a bipartisan group of concerned citizens. But the group is really just a coalition for the greedy, unpatriotic rich. There are plenty of financiers and other 1 percenters in the Democratic Party, and some of them have decided to join forces with their GOP counterparts to work toward a goal that means a great deal to all of them: Making the rich even richer.
I've read and enjoyed innumerable Steven Johnson books; he's one of those great science writers who can gather together disparate phenomena from the technological world and tease out of them a coherent story about what's happening to the world right under our noses.
His latest, Future Perfect: The Case For Progress In A Networked Age, is no exception. Johnson proposes that people who believe in the Internet are not techno-utopians, but rather "peer progressives" -- people who believe that progress is possible when peers work together through non-hierarchical, networked systems.
Johnson lays out the case for peer progressivism as being neither of the right nor the left. It shares some of the right's beliefs in markets -- the idea that the distributed intelligence of lots of people produces better outcomes than centralized decision-making. But it shares some of the left's belief in collective, state-driven spending -- the idea that systems like the Internet don't get produced by advantage-seeking commercial firms (which want to make walled gardens), but rather by governments trying to attain some public-interest goals.
Using this lens of public-spirited, state-sponsored development to create market-driven, individual-centered systems, Johnson lays out his case, showing how the Internet has enabled radical shifts in city management, political campaigning, newsgathering, arts funding, and entrepreneurship. Each of these chapters is well-drawn, and Johnson's careful to label his uncertainties when he has them, rather than trying to shoehorn the facts to fit his thesis.
I was particularly struck by the chapter on news-publishing, in which Johnson suggests that the Internet has demonstrated a capacity to produce fine-grained, intelligent, well-thought-through coverage of various subjects. He suggests that tech news -- the most mature news-subject on the net -- is a template for future subjects. The early days of the Web were particularly hard on tech publications, which struggled to remain relevant with monthly publications in the age of up-to-the-minute Internet coverage, and to continue to pay the bills as online new sources expanded the advertising inventory by orders of magnitude. But over time, a kind of stability emerged, an ecosystem of news coverage that beggars anything of the pre-Internet age. Johnson suggests that the net isn't inherently great at covering tech, but that it was just the first of many news niches the net will cover, and that in time, it will be a model for overall networked newsgathering (he also mentions studies showing that newspaper readers are more likely to inhabit an echo chamber of bias-confirming news than online news junkies).
This is a refreshing, optimistic, level-headed read, and the idea of "peer progressive" is a good one, with the potential to get people thinking outside the Dem/GOP, left/right boxes.