Coolthin.gs

Thoughts and commentary from a young brash economist/philosopher.

The Legacy of William Jennings Bryan

From a Facebook comment of mine.

From my experience and observations the tea party is an extension of evangelical conservatism which is conflicting with its stated interest in small government. The only rally I've been to was dominated by Baptist preachers and Sarah Palin followers neither of which care about seeking smaller government. They are people who are only interesting in getting their own way and we have them to thank for the first 8 years of the 21st century. It is those people who have derailed the movement and will ultimately relegate it to the list of other has been populist movements like the ones championed by William Jennings Bryan who was a known exploiter of populist sentiments, much like Sarah Palin.

Books and Copyrights: or how I learned to stop worrying and love the Nook.

This discussion was inspired by another article about copy rights this time form the Wall Street Journal. 

But in dollar terms, some decisions by copyright holders, rather than optimize the artist's revenue and distribution, insure the opposite. When I asked to use a single line by songwriter Joe Henry, for example, his record label's parent company demanded $150 for every 7,500 copies of my book. Assuming I sell enough books to earn back my modest advance, this amounts to roughly 1.5% of my earnings, all for quoting eight words from one of Mr. Henry's songs.

I love Joe Henry, but the price was too high. I replaced him with Shakespeare, whose work (depending on which edition you use) is in the public domain. Mr. Henry's record label may differ, but it's not clear that his interests —or theirs—are being served here. Were they concerned that readers might have their thirst for Mr. Henry's music sated by that single lyric? Isn't it more likely that his lyric would have enticed customers who otherwise wouldn't have heard of him?

Full article available here. 

The article reminded me of a story one of my professors told me about the book he created for our class. It's a standard anthology text book of articles and it was only available through the George Mason bookstore for $109.00. I know this professor doesn't like the school book store monopoly and the way publishing companies try and lock us in with special editions for each school of packages so I asked him about the book. He told me that the $109.00 was purely the cost of printing costs and licensing the rights to reprint the articles. My professor in fact made no money off the text book at all. He even told me about how he redid the book to eliminated the more expensive articles in it and the publisher kept the retail price exactly the same with the school store which is run by Barnes and Noble, a company I usually like. Lately he has been assigning more Pdfs that we can get for free from school and online sources. Now free doesn't mean that we're getting any less of an education, in fact the reason he made a anthology in the first place was because he did not approve of the other textbooks available. 

With all the free books I've downloaded form the Ludwig Von Mises institute, currently totaling 1450 books, I've been thinking a lot about this subject. I recently bought a Barnes & Noble Nook to read these books on which currently retails for $150. Before I knew of all of the free resources available to me I was never interested in an ebook reader however, the idea of reading even a tenth of my books on a laptop screen wasn't inviting to me (eye strain). I assessed the currently available ebook readers and chose the Nook because I judged to best fit my needs. Reading on the Nook as been fantastic and I'm happy with it, much more than I've been with any of my text books most of which are similarly priced.

While this may be a situation that applies best to the George Mason economics department I'd like to see B&N trying to encourage professors to recommend eReaders and emphasize the availability of free resources rather than try to lock us to a monopoly school store. I was already interested in these resources and they offered a product that I saw as a good investment which means they made money without rigging what is available to me and fighting used book sales. Instead Barnes & Noble participates in bidding wars for exclusive rights for the GMU bookstore sold by my school to pay for the bloated administration that keeps raising my tuition. Money can be made off of freely distributed materials and it doesn't require any further monopolizing of higher education. 

Support John Stagliano

I may not watch his films but I support John Stagliano and oppose this arbitrary case against him. For those who how no idea who or what I am talking about lets set some facts first. John Stagliano is a pornographic film producer and owner of the production studio Evil Angel and currently he is facing obscenity charges in Washington DC. For a great article written about the trail and it's proceedings check out this article by Reason Magazine. What is most striking about this case is the manner in which it is being held, mainly in that Judge Richard J. Leon is doing his best to make it as closed as possible. He has has denied both the prosecution and the defense request to have expert witnesses testify. He also opened by discussing the arbitrary "Miller Test" for deciding whether something constitutes obscenities. More information on the court proceedings in available here. Discloser, John Stagliano is also a libertarian and donates money to libertarian think-tanks which is where I would like to work some day.

The important part to take form this is that what is on trail is whether or not the films distributed by John Stagliano's company Evil Angel constitute obscenity. Excepts of three films will be shown in the court room on a tv that will only be facing the jury, they are Milk Nymphos and Storm Squirters 2, plus the trailer to Fetish Fanatic 5. Curiously absent is Back Door Sluts 9. These films weren't directed by John Stagliano and they all include legal age consenting adults and can only be sold to legal adults.


Now I honestly have no idea what constitutes obscenity and if our courts have an arbitrary definition then I have one more reason to be uneasy. But lets take a look at the definition...

Obscenity
noun, plural -ties for 2, 3.
1.the character or quality of being obscene; indecency;lewdness.
2.something obscene, as a picture or story.
3.an obscene word or expression, esp. when used as aninvective.

And because it requires knowing the definition of Obscene here is it.

Obscene
adjective
1. offensive to morality or decency; indecent; depraved:obscene language.
2. causing uncontrolled sexual desire.
3.abominable; disgusting; repulsive.

Firstly I'd like to point out that both of these words rely on a subjective interpretation of whatever is being called or considered obscene. I for one am scared of government subjectivity because it violates the principle of limited government which the United States was founded on. Some will say of course that this is about society's definition of what constitutes obscenity however, need I remind that it is the job of the government to protect individuals from society. We all no know examples of majority societies violating the rights of individuals. The showing of the female form in Muslim societies is often considered obscene and punishable by caning. The US may have a different view on what is obscene and may not cane people but it still support the notion of forcing people to comply with social norms. Only the firm support of the natural rights we all possess as individuals can differentiate the United States from societies that regularly violate them. If the US even stand by them for one instance then it again betrays everything it stands for.

Here is what I think this case is really about. Parents don't want to explain sex to their kids and anything that they don't like they don't want to have to explain, so they seek to have the producers of things they don't approve of punished. No one is forcing anyone to purchase or watch these films and if they did then that's a clear violation of and individual's rights which a case can be built on. The fact of the matter is, what may be obscene to one person probably isn't to others; in fact there are things out on the internet that are far more obscene then most people can even imagine (it most likely comes form Japan). If parents don't want their kids to have access to materials they consider obscene then they need to take precautions on their own computers and talk with their kids about it, not force their beliefs on others. Instead, sex is the single most avoided topic by parents and when kids inevitably, yes inevitably see something that wouldn't be approved of they have no context of what they are seeing, just ask Butters. Parents then seek to have the public schools explain this to their children which then places the sexual education of young people into the hands of the state which has no problem of using arbitrary definitions. Parents cannot hide their children for ever, and punishing a producer will not change that fact and worse sets further precedent for the state to violate the natural rights of us all.

No recovery yet but...hey look a squirrel!

This is where people I disagree with on economics would say "Well obviously it didn't work, there wasn't enough stimulus!" which is a "head I win tails you lose" trap. Of course those people willfully remain ignorant of 70 years of rebuttals to their Keynesian ideas so I can call them delusional. 

If you'd like a recent rebuttal to and a keynesian's comments then you can check out Krugman in Wonderland. The blog is by Professor William L. Anderson who also writes for the Ludwig Von Mises Institute. His writing's are available here.

More on Intellectual Property

When I first read this item about how yogis are upset about the patenting of yoga moves, I was skeptical. Could this really be true? Well, a quick search reveals many examples among which this. Just so we are clear: this is not a legitimate form of property right. It is created by the state at the behest of private interests to grant monopolies, and it is just as injurious to the commonwealth as any monopoly privilege. The only reason this stuff fools people is that it is given the name “property.” In fact, there can be no property in non-scarce things.

Hey Auto Insurance Companies!

Here is an idea. Offer a optional insurance plan that has a really low rate but in order to be insured applicants are required to take a drivers test every three years. Should they fail the applicant would be put on a provisional plan with an expiration date and the full plan would not be reinstated until they complete 48 hours of a drivers education program, test again, and pass. You maintain a higher standard of driver competency which leads to a lower rate of at fault accidents by your customers. You profit from having to pay fewer claims thanks to few accidents and your customers have the benefit of lower rates in exchange for mandatory review periods. Now if all the car insurgence agencies were to compete with plans like this you would have even fewer accidents which makes a wining situation for everyone. 

And none of this would require government involvement. 

Patent Law and Smart Phones

I love smartphones. Every time I use my Motorola Droid in the back of my mind I still marvel at the technology and how portable it is. I have preferences in mobile OS operating systems. and manufacturers but I won't be discussing them here. Today I'd like to talk about one area where I have yet to fully form a concise opinion on but never the less I have many ideas about, the patent system.

My interest in discussing the subject of the patent system comes from reading a recent article from the Wall Street Journal talking about the fact that NTP Inc. (a patent holding company) has recently filed a suit against Apple, Google, HTC Corp, LG Electronics Inc, Microsoft Corp. and Motorola Inc  over patents held by NTP over the wireless delivery of email. If you look again at that list you'll notice that it includes pretty much every manufacturer of smartphone though RIM, and HP/Palm are noticeably absent because it's already brought suits against them. There is also a pending suit against AT&T, Sprint Nextel, T-Mobile, and Verizon Wireless from 2007.

My issue with patents is that unlike physical property which they are often compared to, patents are ideas. The may be used  to create a physical product but they are not a product themselves just as ideas are not. How do you own ideas? How can you expect others to pay for an idea which is the way firms like NTP work. Patents are bestowed to companies and individuals for their ideas by governments which means the state has positive rights view over the right to thought, that I find to be incredibly dangerous and constitutes a violation of our natural rights. If I were to come up with a way to send email to my phone I don't have a right to that idea because NTP already has it. If you think that patents are about specific ways you doing things then I don't think you understand just how vague patents can be.

Here is where I run into one of my disagreements with a person who is one of the largest influences on my ideas Ayn Rand. She for all of her greatness she contradicts many of her own ideas with a surprisingly pro positive rights and anti free market position on on patents.....

"As an objection to the patent laws, some people cite the fact that two inventors may work independently for years on the same invention, but one will beat the other to the patent office by an hour or a day and will acquire an exclusive monopoly, while the loser's work will then be totally wasted. This type of objection is based on the error of equating the potential with the actual. The fact that a man might have been first, does not alter the fact that he wasn't. Since the issue is one of commercial rights, the loser in a case of that kind has to accept the fact that in seeking to trade with others he must face the possibility of a competitor winning the race, which is true of all types of competition." - From Ayn Rand, Capitalism: The Unknown Ideal (New York: New American Library, 1967), p. 133.

My problem with this statement is that patents are through their design, anti-competitive. Patents are government given monopolies for an idea and represent of intervention by the government in the markets, changing the nature of competition. It is often said that patents exist to entice inventors to create because they make the inventor stand to benefit more from their creation. However does that necessitate positive rights theory? The idea that the government creates rights and that conversely gives it the right to say what rights you do or do not have. 

What I'm basically hitting upon is the time honored debate of government being a necessary evil. Does patent law represent a necessary evil, even to those who support a free market? I'm still in the process of deciding my opinion on it, but I am always skeptical of evil being able to do good but even for those who believe it can then they usually believe it should be restrained. The belief in restraining government was held reverently by the founders of the United States but over two hundred years of history hove shown that it is no longer a common belief and the lack of it I fear will bring untold misery.

Katrina's Silver Lining: The School Choice Revolution in New Orleans


From Reason TV

Before hurricane Katrina ravaged the city in 2005, New Orleans had one of the worst performing public school districts in the nation. Katrina forced nearly a million people to leave their homes and caused almost $100 billion in damages. To an already failing public school system, the storm seemed to provide the final deathblow. But then something amazing happened. In the wake of Katrina, education reformers decided to seize the opportunity and start fresh with a system based on choice.

Today, New Orleans has the most market-based school system in the US. 60% of New Orleans students currently attend charter schools, test scores are up, and talented and passionate educators from around the country are flocking to New Orleans to be a part of the education revolution. It's too early to tell if the New Orleans experiment in school choice will succeed over the long term, but for the first time in decades people are optimistic about the future of New Orleans schools.

Approximately 10 minutes. Produced by Paul Feine; hosted by Nick Gillespie; shot by Alex Manning and Dan Hayes; edited by Alex Manning.

As someone who is only recently out of public schools I can say that what is happening for the children of New Orleans is something that will benefit them and others more then they can know. I hope that this can be the spark that lights a fire of education reform that is required to make sure future generations more intelligent then the current ones. They will have a hard future left to them but at least we can fight to give them an education that will help them survive it.

Lessons from Adam Smith

The following post is a comment I made to Tom Retterbush's post Good People but Bad Americans

Now lets take a second to walk though some basic micro economics. People seek to maximize utility with their given resources as well as expected future resources. Example, you think you'll buy something now because you get your paycheck next week. Expected future income.

You also have expected future expenditures such as bills or that vacation you've been saving up for and you also take these into account when you try to maximize utility with you purchases. 

Both you current and future resources along with your current and future expenditures play into your decision making process. So when you look at the prices of the goods you take into account the value you expect to receive from the good and the costs associated with it both short and long term. If you value the location of where the good was produced that gets included in your expected value.

Whether someone values the location of where a good is produced is left to the individual and they are entitled to hold their own opinions, values, and beliefs. The idea of an individual's freedom to choose is the very foundation of the United States of America and capitalism. You of course are free to disagree with their decisions.

But next time before you jump to decrying individuals take a second to think about positive effects from their decisions.

Example: I recently purchased a kayak that was not made in the US but I would not have been able to purchase one made here because it was prohibitively expensive given my budget. Now that I have the kayak though I take trips to West Virginia to use the states rivers. I stay at camp sites, I shop at stores, I purchase river tour tickets, and more, all which goes to local businesses of the state. You argue that I should have instead have purchase one American made kayak which I would have been forced to leave in my garage because I wouldn't have the money to take it anywhere. The net economic gain for more Americans is greater with my purchase of an imported kayak, not to mention the money going to the American shipping industry with it's docks, dock workers, trucks, truck stops, and teamsters.

Greed has economic benefits, to quote the father of the science of economics Adam Smith from his book the Wealth of Nations written in 1776, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest."