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Capitalism, casinos and free choice


Tim "Undercover Economist" Harford's column "Casinos’ worrying knack for consumer manipulation," takes a skeptical look at business and markets -- specifically their reputation for offering a fair trade between buyers and sellers. Inspired by Natasha Dow Schüll's book Addiction by Design: Machine Gambling in Las Vegas, a 2012 book on the calculated means by which gamblers are inveigled to part with more money than they consciously intend to, Harford asks a fundamental question about capitalism: are markets built on fair exchanges, or on trickery?

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Thatcher's slow-motion housing timebomb


James Meek's essay "Where will we live?" is a detailed, passionate history of the housing timebomb that is detonating in England today. Thatcher set the time in the 1980s, when she sold off public housing to tenants and forbade local governments from building more with the proceeds, and subsequent governments have done everything they can to fuel and intensify housing speculation and bubbles. And now single moms, disabled people, and elderly people are being evicted, families can't afford housing on anything less than a banker's salary, and pensioners are being doomed to decades of poverty by low interest rates that can't be raised, lest they burst the property speculation bubble.

Housing in the UK is a microcosm for everything wrong with neoliberalism: corruption, cronyism, grinding human misery, and funny accounting to prove that it's all working, honestly.

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English mega-landlord evicts all welfare tenants, will no longer rent to them

Fergus Wilson, one of England's largest landlords, has announced that he will no longer rent to people receiving welfare benefits, and has served all of his benefits-receiving tenants with eviction notices. He says that the cuts to benefits in the UK have resulted in an unacceptably high level of rent arrears, so high in fact that rent guarantee insurers will no longer cover properties let to welfare tenants.

The problem of social housing tenants falling behind on rent will get much, much worse shortly, when the "universal credit" scheme is introduced -- a massive change in the way benefits are paid that has delayed by massive IT problems.

The hardest hit groups of tenants are elderly people and single mothers, as well as people who are too disabled to work.

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Strategies for the future: accuracy vs. resilience vs. denial

Seth Godin's daily thoughts are always provocative and thoughtful, but today's is a particularly timely and apt one for the new year. Godin describes three ways of coping with the future: Accuracy (correctly guessing what will happen); Resilience (admitting you can't make accurate predictions, so preparing to weather a variety of storms); and "Denial" (pretending nothing will change and getting clobbered as a result). I'm shooting for "Resilient" myself, but if I'm brutally honest, I have to admit that I have moments where I assume that I can be Accurate and where I'm too tired to do anything except Deny.

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Lessig's Walk Across New Hampshire: animation explains crusade against electoral corruption

Brian sez, "Lawrence Lessig, former EFF board member, chair of the Safra Center for Ethics at Harvard University, founder of the Center for Internet and Society, founding board member of Creative Commons, and former board member of the Free Software Foundation is taking on a new project -- walking across New Hampshire.

"The idea is to raise awareness of the massive amount of political corruption in the American democratic system, and make it the #1 issue in New Hampshire in time for the 2016 Presidential Primaries. This three-minute video (from the guy who did the Windows 8 and Data Caps animations) explains the project, called the New Hampshire Rebellion, in cartoon form."

Animated: How the New Hampshire Rebellion will make corruption the #1 issue of 2016 (Thanks, Brian)

Nailing the neoliberal end-game

"The possibility of success is used to call the majority of people failures." -Molly Crabapple, Filthy Lucre Cory 9

America is in love with its libraries: Pew report


The Pew Internet and American Life Project released a new report today entitled How Americans Value Public Libraries in Their Communities (PDF), that shows a very large majority of Americans value libraries, viewing them as critical to their communities and vital to providing services that ensure equality of opportunity for people who would otherwise be at a terrible disadvantage in life.

This is in contrast to a few privileged blowhards who've opined that the library is an obsolete institution in the age of the Internet -- and worse, an unaffordable luxury in a time of austerity and recession. The mission of libraries is to help the public navigate information and become informed -- a mission that is more important than ever. As Eleanor Crumblehulme said, "Cutting libraries in a recession is like cutting hospitals in a plague."

Read on for the study's key findings.

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Replace bank chiefs with small dogs: Chinese top economist


China's former chief economist has excoriated the nation's banking system, which charges high fees and maintains a greedy-large gap between its deposit interest and lending interest rates.

Such a business provides no value, and is merely parasitic on the people: "With this kind of operational model, banks will continue making money even if all the bank presidents go home to sleep and you replaced them by putting a small dog in their seats."

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Precarity is the new normal

Jon Evans is incandescent on the subject of the Great Bifurcation, as the economic equality gap yawns wider and wider. He puts into words the thing that has literally kept me up nights for the past year. What is to be done? (via Making Light) Cory 38

NSF study shows more than 90% of US businesses view copyright, patent and trademark as "not important"


In March 2012, the National Science Foundation released the results of its "Business Research and Development and Innovation Survey" study, a rigorous, careful, wide-ranging longitudinal study on the use of trademark, copyright, and patents in American business. The study concluded that, overall, most businesses don't rate these protections as a significant factor in their success (in 2010, 87.2% said trademarks were "not important"; 90.1% said the same of copyright, and 96.2% said the same of patents).

What's striking about the survey is that even fields that are traditionally viewed as valuing these protections were surprisingly indifferent to them -- for example, only 51.4% of software businesses rated copyright as "very important."

In a very good post, GWU Political Science PhD candidate Gabriel J. Michael contrasts the obscurity of this landmark study with the incredible prominence enjoyed by a farcical USPTO study released last year that purported to show that "the entire U.S. economy relies on some form of IP" and that "IP-intensive industries" created 40 million American jobs in 2010. The study's methodology was a so sloppy as to be unsalvageable -- for example, the study claimed that anyone who worked at a grocery store was a beneficiary of "strong IP protection."

The NSF study doesn't merely totally refute the USPTO's findings, it does so using a well-documented, statistically valid, neutral methodology that was calculated to find the truth, rather than scoring political points for the copyright lobby. It's a study in contrasts between evidence-based policy production and policy-based evidence production.

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Interview with Sol Yurick, author of The Warriors


Geoff from BLDGBLOG sez, "A few years ago, I interviewed novelist Sol Yurick, author of The Warriors, for BLDGBLOG -- but a variety of circumstances meant it just sat in my hard drive for the past four years. But after rediscovering the interview in my old files, and after Yurick himself passed away back in January, it seemed like there was no time like the present to publish this, finally."

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Charlie Stross: Bitcoin should die in a fire

Charlie Stross's Why I want Bitcoin to die in a fire presents a set of scorching denunciations of Bitcoin based on its technical, political, and economic demerits. On the way, Stross takes some vicious shots at libertarianism. It's one of those Christmas-season hornet's-nest kickings that are fun to watch -- at a great distance.

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Mandatory bug-bounties from major vendors

Brian Krebs proposes that software vendors should be forced to pay a bounty on all newly discovered vulnerabilities in their products at rates that exceed those paid by spy agencies and criminal gangs. He says that the bill for this would be substantially less than one percent of gross revenues, and that it would represent a massive overall savings when you factor in the cost to all the businesses and individuals who are harmed by security vulnerabilities. He doesn't explain what to do with popular, free/open software though. Cory 11

EU politicans who got raises worked less; MEPs with pay-cuts worked more

In Salaries and Work Effort: An Analysis of the European Union Parliamentarians [PDF], a paper by professors Naci Mocan and Duha Altindag in the latest Economics Journal, the researchers take advantage of a recent change in the pay of Members of the European Parliament to examine the relationship between pay and work.

Until 2009, each EU nation chose how much to pay its MEPs, and salaries were highly variant. When they were harmonized in 2009, some MEPs got paycuts, other got raises. The researchers examined MEPs' behavior before and after, and concluded that the MEPs who got raises did less work (attending meetings and sessions) than they had under lower salary conditions; while MEPs who took cuts started showing up for work more.

The UK just gave massive, above-inflation raises to its MPs, and part of the argument was that you have to pay for quality. That proposition does not appear to accord with the data.

The unique event allowed the economists to compare the effects of pay rises and decreases on MEPs' performances between July 2004 and December 2011. From this they drew a startling conclusion: MEPs who got an increase ended up attending fewer meetings, while those who had a pay cut raised their attendance rate. Each percentage increase in salary resulted in a decrease of around 0.04% in the number of days an MEP attended parliament. For example, the average French MEP, whose salary increased from about €76,000 to €92,000, ended up missing an additional parliamentary meeting a year.

"We find that a decrease in salaries motivates parliamentarians to increase their attendance," the economists write. The increase in salary also had a negative impact on the number of written or oral questions asked by parliamentarians.

"European parliamentarians are responsible for passing laws that govern the member countries," the two academics write. "They have control over the EU budget and they supervise the other EU institutions. So given the significance of the job, it might be presumed that the effort MEPs put into their work would not be influenced by their salary. The results of our analysis show that this is not the case."

Paying politicians too much harms their work ethic, study claims [Jamie Doward/The Guardian]

Presenting political argument on Twitter, and the "prestige economy"





Here's a fabulous interview with activist Sarah Kendzior, a journalist and researcher who made a great, concise argument against unpaid internship as a series of four tweets last June. Policymic talks with Kendzior about her work on the "prestige economy" and the widening wealth-gap, and also talks about the theory of presenting arguments over Twitter, a subject on which Kendzior is every bit as smart as she is on matters economic and political.

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