Phishing for Tweaks to my Principles Course

As the spring semester gets started, I am taking stock of all of the material that I have taught in the past semester of my Introduction to Economics courses and seeing how I can best tweak it for this next run.

One thing in particular that I have been thinking about how to discuss and analyze when ordinary things in markets “go wrong,” are a bit shady, or . I am not talking about the classic market failure arguments like externalities or public goods, but little micro-failures, often of single businesses or industries: primarily deceptions and behavioral flaws in consumers that businesses are supposed to take advantage of and mislead for profit.

What stimulated my thinking on this is the fact that almost half of my students wrote one of their papers (either a short current events article or an Op-Ed) last semester on Black Friday, as these assignments took place in the fall. While most of them made convincing opportunity cost arguments or argued the benefits and creative destruction of innovation via shopping online, a few of them wrote on the “tricks” or the psychological deceptions that businesses play to unscrupulously attract unwitting customers to fatten their bottom line.

I am sure that I have nudged these students’ views on markets significantly and helped them understand the benefits of markets (one student of mine admitted at the end of the semester that he had entered the course a socialist, only to do a 180 and see the benefits of markets once he understood them). But as a teacher who is passionate about both the content and the pedagogy, it got me thinking about how I can address this topic more productively.

I might have brushed this off as a minor topic had this not also been a significant time to be thinking about this topic, with the recent release of George Akerlof and Robert Shiller’s Phishing for Phools: The Economics of Manipulation and Deception, which essentially seems to make the argument that businesses systematically mislead a stupid members of the public to act against their own interests, in pursuit of a quick buck. (I suspect Akerloff and Shiller don’t want to just come out and say this is their argument, so they cloak it in cute neologisms like “phishing” and “phools.”) So I was particularly delighted to read the several posts that Don Boudreaux has had on this topic, an earlier review of the book by Alex Tabarrok, as well as Peter Klein‘s short but decisive critique.

I have always taught my students (beyond what a traditional economic course would teach) that markets are a process of discovery, and that explanations of social phenomena resorting to some flaw in human nature (“people are greedy” or “people are irrational”) are rarely good analyses. Rather than finger pointing, we can get a lot more analytical traction and explanatory power by observing what the institutions and incentives are that channelled that human weakness into an outcome we judge to be bad or good. Markets only lead to socially good outcomes (however we define that) under specific institutional conditions.

However, I am still looking for good short articles on these micro-market failures that are readable for freshmen in an introductory course. I would love to have them read, e.g. works by Oliver Williamson, Elinor Ostrom, Klein and Leffler, etc. that focus on either the role of market mechanisms such as reputation and price premiums, in combatting phishing and opportunism, or in non-market (but non-State) institutions that emerge as firms or norms to create governance strategies that reduce opportunism. I am having my more advanced seminar in Austrian Economics read some of these excellent sources, but for my principles class, I would love to hear any suggestions.

I am experimenting with teaching my lessons in a different order to maximize this impact, and having specific political economy lessons late in the semester each on the knowledge and the incentive problems of economic systems (including market processes). I also want to put more emphasis on building a toolbox of questions that students should always ask when they encounter a social problem. I always have them ponder the knowledge and incentive problems of any issue, as well as trying to compare feasible relevant alternative institutional solutions. Now I will give more precedence to having them ask — when they see a scam or a micro-market failure for instance — Are entrepreneurs leaving money on the table? If one business seems to be exploiting consumers, why hasn’t another entrepreneur come in and offered a better service or a lower price to drive that unscrupulous rival out of business?

Francis I whiffs on water

This part of Laudato si’ has been on my mind recently, since a friend posted it on Facebook:

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Even as the quality of available water is constantly diminishing, in some places there is a growing tendency, despite its scarcity, to privatize this resource, turning it into a commodity subject to the laws of the market. Yet access to safe drinkable water is a basic and universal human right, since it is essential to human survival and, as such, is a condition for the exercise of other human rights. Our world has a grave social debt towards the poor who lack access to drinking water, because they are denied the right to a life consistent with their inalienable dignity. This debt can be paid partly by an increase in funding to provide clean water and sanitary services among the poor. But water continues to be wasted, not only in the developed world but also in developing countries which possess it in abundance. This shows that the problem of water is partly an educational and cultural issue, since there is little awareness of the seriousness of such behaviour within a context of great inequality.

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I thought this was a great illustration of how unintuitive economics is; the many learned minds in and around the Vatican make the same kinds of mistakes that the ordinary person makes. The Econtalk podcast of March 2, 2015 covered this exact topic very well. Two brief points:

1. How much water is everybody entitled to? For what uses? When can people bathe? Should the water in the shower cut off after two minutes? Is it some kind of moral law that families should all share the same bathwater? Saying “water is a right” is fine but gives us few clues about practical implementation.

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Farmers need to use more water than the rest of us, and in general the rest of us are happy about that because we value the produce. What about marijuana growers? Are they entitled to more water in the same way that spinach farmers are? Some of us value the produce of marijuana farms and some of us do not. I believe the Pope opposes marijuana farming, but he has now set up a situation in which differing beliefs about rights conflict with essentially no resolution unless we all buy into the whole package. (We don’t.)

2. Is the public funding of the provision of water the most reliable way to ensure that water is available for everybody? There’s a decent argument that municipal-level provision of water is usually the most efficient way to do it, which I will assume here to make things easier. In this situation, should the water be priced at zero? This encourages overconsumption and makes infrastructure maintenance and expansion less likely. Why economize on the use of water when there’s no difference to you in running the tap for 10 minutes or an hour? Where do the funds come from when maintenance or expansion are needed? Should the water authorities attempt to mimic market pricing to encourage better conservation and better infrastructure? That’s remarkably like making water a commodity, isn’t it? You could compromise between the two positions and price water below market but above zero. You can’t be half pregnant, but can something be a half commodity?

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Many areas that have zero-price water have said water in the city center and little or none in the outlying areas where the poor live. They still need water to survive, and water trucks supply them with it but at many times the cost that people with access to a working tap pay. Pricing water above zero/closer to market price would help them, not hurt them, since it would allow for better (or any) infrastructure to reach them. This infrastructure funding could come from other sources, sure, but which, and what would they give up instead? How much infrastructure should be built, and to where? Ceteris paribus it is costlier to live in barren desert than in well-watered areas; who should bear these costs?

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I began by saying the Pope makes the same errors ordinary folks do when it comes to economic topics. Thinking in moral terms is valuable, I agree, but only thinking in moral terms is a poor guide to how to organize the world, especially for large, complicated, impersonal systems. In this case it’s even worse. It’s counterproductive. In the long term treating water like a commodity leads to better outcomes—from the Pope’s perspective and from mine—than otherwise.

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I leave with my favorite Rothbard quote:

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“It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a ‘dismal science.’ But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.”

This Month in IP Insanity (April 2015)

Now that the academic year is slowing down, I can start to account for all of the developments in IP law and technology again. Here are a handful of events and discussion points for the past month:

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  1. Tidal has turned out to be a bust. Predictably, Jay-Z has pulled all of his music off of Spotify and Youtube, meaning Tidal is the only place where you can access it. As I commented during the odd fanfare of its release – while we’ve certainly increased access costs, I haven’t really seen any big boon to musical innovation, and it’s not clear that any other artists (big or marginal) will flock to Tidal. It’s probably just a rent-extraction system for the musical elite.
  2. More streaming music news — Spotify is lobbyisting up (which somehow doesn’t sound as catchy as “lawyering up”, perhaps that’s for the better). I’ve reported upon Spotify before, in the context of Taylor Swift’s criticism of streaming music. Spotify seems to be preparing to go to war with Apple, the latter of which is preparing to release it’s own streaming service, the newly acquired and revamped “Beats.” At the same time, the DOJ is considering another pass at music licensing regulations, and the blue moon when Congress decides to revamp copyright laws may also be around the corner (due, no doubt, to the fact that 2018 will see the first batch of copyrights to finally expire since 1923).
  3. Another reason Spotify is lobbyisting up, and yet another music streaming news bit, is that Grooveshark has finally streamed its last. From The Atlantic’s subtitle, “Everyone knew you were probably illegal all along,” one wonders how they were able to persist for so long without properly acquiring licenses to all streamed music. Apparently it was “good lawyers,” but even that will only get you so far for so long…
  4. John Oliver set his hilarious investigative journalist sights on patents, specifically patent trolls. [I should add that I watched this live the night before my dissertation defense, taking it as a good omen.] It was a very entertaining piece, highlighting the true cost of non-practicing entities (NPEs) who extract rents from would-be users or innovators who use something the NPE holds a patent on (but the NPE does not actually produce anything). Alex Tabarrok, commenting on a further link to Timothy Lee, rightfully discuss how trolls are not the fundamental problem with the patent system, just one of the system’s most visible and absurd excesses.
  5. Not a news story, but on a related note, I recently read a dated article by Stephan Kinsella arguing that patent trolls are akin to mafioso, who don’t want to actually block competition (like actual patent holders do), but rather keep it flowing so they can just wet their beak. This framework makes actual patent holders, who would exercise their monopoly power and block future innovation for want of rents, actually seem worse than the trolls, counterintuitively. It sounds very similar to Mancur Olson’s stationary bandit being economically superior to the roving bandit model of government. I’m inclined to agree, but the point again is that the system is broken, not those who are exploiting it best.
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  7. Onto cable TV, the market for which was blown open this past month by Verizon FIOS’s announcement that it will finally will break up the famous cable bundle into smaller packages. This is far from a la carte channel purchasing, long held as the ideal from the consumer’s point of view, but not the economist’s, as Verizon will offer several slimmer packages with about 20 channels including the famous broadcasters and ESPN, etc. It will be interesting to see how this affects the cable industry: established players don’t like it.
  8. Our benevolent overlords at Google now want to get into the phone carrier business. Google’s proposed Project Fi will cost $20 a month for talk and text, beyond free Wifi, and another $10 per gigabyte of data used each month. Most interestingly, unused data can be credited to the next month’s quota. While a welcome innovation, Google will have to build up its network and reputation as a carrier beyond simply a software (and limited hardware) company, to compete with the infrastructure of Verizon, AT&T, and Sprint.
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Development reform and economic freedom

Chris Blattman has an interesting post on development reform and the paths to pursue. He considers what development reformers should focus on when rule of law is weak or absent. However, he misses an important point. Reformers can eliminate legal barriers to entry for businesses.
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To understand this point, let us differentiate between reforms which have the state act and reforms which have the state restrict its sphere of action. State action includes both new initiatives and reforming existing ones. Restricting a state’s sphere of action is the elimination of existing programs.
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In a state with corruption and weak rule of law, any state action will necessarily be effected by that corruption. The more corruption, the less effective any state action becomes. On the other hand, restricting state action is not effected by corruption. Because the state is not acting in a sphere, the effectiveness of a state’s capacity to act is not irrelevant to the outcome.
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Take for example two possibilities. A state could introduce a new unit in the police force or eliminate legal barriers to entry for private schools. If there is corruption in the old police force, the new unit is at a high risk for corruption, which would greatly reduce its effectiveness. On the other hand, eliminating barriers to entry for schools would not be effected by corruption. Some bureaucrats would be shuffled around or let go, but corruption or lack of rule of law would have little effect on implementation.
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What this analysis suggests is that on the margin, development reformers should focus on reducing the sphere of state action in states with less rule of law and more corruption.

Critiquing McCloskey

Adam Gurri has asked me for my opinion on a recent piece by Deirdre McCloskey. So, now seems a good a time as any to write about some of my misgivings of McCloskey.
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First, and this applies not only to McCloskey, attempts to explain important events should embrace uncertainty. When I read McCloskey and others, the industrial revolution was caused by institutions or ideas or X or Y. Every author has a fairly precise understanding of the factors of the industrial revolution. In reality, given that we are still arguing about it, I am skeptical of their certainty.
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Let’s imagine a future where we can simulate earth on the eve of the industrial revolution. With this advance we can make slight changes in institutions, ideas, and other factors to evaluate the impact on the timing, speed, and sustainability of the industrial revolution. Without these simulations, we could still have a betters market based on what those simulations would reveal. I doubt the odds any of the scholars place on their model are 100-1, and I imagine they would place different confidence on different parts of their models. As such, we should be honest about confidence levels in the current models, something that is rarely seen in such scholarship. As an aside, I imagine McCloskey would deny the applicability of the above thought experiment, but that is a discussion for another day.

Second, I greatly prefer McCloskey’s previous writing style. I found myself unable to understand several of her points, requiring a rereading. The essay also reads like a stream of consciousness, there is no single point, rather numerous smaller ones.

Third, I would like to give my understanding of the neo-institutionalist account of the industrial revolution. Glorious revolution was an institutional change that led to more commerce. Along with the increase in commerce technological innovation hit an inflection point of no return. The institutional change was a necessary, but not a sufficient factor to generate economic growth.

The role of technological change is also tricky to understand. We can imagine a set of undiscovered technologies. However, the set is heterogeneous. To have sustained technological improvement requires being in a part of the set where the undiscovered technologies are close enough together to allow for sustained advancement.
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For example, it is difficult to imagine sustained technological change coming after the discovery of fire. The following discoveries, how to cook meat, how to heat forge metal, etc, are all sufficiently complicated that we expect them to take generations to discover and perfect. For sustained economic growth of the kind experienced since the industrial revolution there must be a much faster advancement of technology.
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Now, perhaps undiscovered technology was sufficiently lumped together for sustained economic development in previous time periods, but political repression never allowed economic growth.

McCloskey critiques neo-institutionalism, arguing that a change in institutional equilibria cannot account for the 20-30 fold rise in living standards. However, this is an uncharitable view of the neo-institutionalists, as they would argue that the new institutional equilibria was necessary for technological advancement. Knowing government agents wouldn’t shut down your artisan shop for infringing on some government monopoly is crucial for economic growth.

Fourth, the critique McCloskey applies to the neo-institutionalists can also be applied to her. A change in ideas alone is unlikely to lead to 20-30 fold increase in living standards. Also, I believe she overstates the effect of a change in ideas. Many people in modern society have beliefs others find abhorrent. However, those people find groups which share their ideas, lowering the cost of holding them. There is little reason to believe merchants in England wouldn’t find associate amongst themselves lowering the cost of holding those ideas.

Fifth, McCloskey seems to conflate two things, the industrial revolution and economic development. The quick rise of East Asian tigers seems to suggest than an institutional change is enough to spur economic growth. Perhaps other conditions are necessary for the industrial revolution, but catch up growth seems to rely less directly on ideas.

Sixth, she argues that things like identity and morality cannot be captured by neo-classical economics, but gives little reason as to why. A simple explanation of identity and morality is they serve to signal in group status. People want to trade with people who have a shared set of expectations about what constitutes fair trade. More importantly, they want to live with people with a shared understanding of permissible violence. Because the most convincing person is one who believes what they are saying, identity and morality are a central part of humanity.
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Seventh, and this applies to McCloskey more broadly than just this paper, what basis does she have for abandoning central economic assumptions. For ideas to matter either preferences are not constant (what she seems to be arguing given her jabs at de gustibus) or rational expectations is false. You cannot have all constant preferences, rational expectations, and ideas mattering. Given the importance of constant preferences and rational expectations the burden of proof is on McCloskey to change methodological assumptions. This burden of proof is especially difficult to reach in complex problems, and she fails to meet it.
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Lastly, McCloskey is arguing that economics should embrace speech, stories, shame, and the Sacred. I agree. Economists should also take culture more seriously, take beliefs and morality more seriously, and rely less on complex mathematics. However, economists can do all that just fine within the existing framework.

Music Copyright’s Biggest Winners Want You to Pay More Money

Many of the music industry’s biggest stars gathered today for a unique press conference to promote Tidal, a new hi-fidelity streaming music service. On stage, an ensemble cast of promoters — Jay-Z, Beyonce, Jack White, Kanye West, Rihanna, Alicia Keys, Daft Punk, Coldplay’s Chris Martin — declared their intent to revolutionize the music industry. The key here is that Tidal is “artist-owned” and controlled, as compared to studio-managed.
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Artists have long been critical of freemium streaming services, like Pandora, Grooveshark, or Spotify. Tidal, on the other hand, has no free option, but rather a two-tier pricing option: $10/month for regular streaming and $20/month for hi-fidelity streaming. Its co-owners (the stars listed above), proclaim that this will help return music back to the artists.
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As I argued when Taylor Swift launched her tirade against “free music,” the problem with our current system — for both consumer and average artist alike — is the publisher-centric model of copyright. Publishers benefit largely at the expense of consumers and the average artist. Hence, there are reasons to believe that this new service could be a welcome innovation. However, I specifically mention that copyright hurts the average artist, as, in addition to publishers, copyright’s prime winners are the superstar artists — the very ones who are launching this new service.

Thus, while I applaud a move to reduce studios’ rent-seeking capacity, I am skeptical about the effect this service alleges to cause. Without systematically changing the structure of the copyright system, we risk this firm simply becoming its own rent-seeking studio. Thus, the question of Tidal’s marginal benefit is twofold: whether it will improve the status quo of accessing existing works, and whether it will increase innovation.
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If Tidal only ends up being a “big boys (and girls) club” for the superstars (so far, the only artists appearing on it are in Jay-Z’s inner circle), it will simply be a new $20/month toll. Should all of the major artists pull a Taylor Swift and eject from the free streaming services to exclusively list on Tidal, then this certainly is a loss for consumers and a transfer to the elite artists. It will be much less an artists’ revolution in the music industry than the artist elite forming their own rent-seeking studio. Meet the new boss, same as the old boss.

One is also reminded of Neil Young’s recent flop with the “revolutionary” crowdfunded Pono service. Young’s service turned out to be pure snake oil not worth the cost — I wonder if Tidal consulted him on its own potential coup.
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Among artists, copyright primarily benefits only those 1% superstars that made it big. Smaller acts are probably harmed by copyright on net. Everyone involved in the copyrighted entertainment business, from consumer to artist to publisher, has to put up with higher transactions costs arising from the need to search for existing copyright holders, negotiate with them, and license their own work downstream in a tangle of red tape. However, those that have the most socially valuable (highest grossing) works can justify the cost of copyright because it helps them minimize their losses from piracy.

This is for two reasons: First, people primarily want to pirate the biggest stars. On average, consumers would rather illegally download Interstellar and Beyoncé than Final Destination 12 and your friend’s cousin’s high school cover band.* Second, those big stars have greater bargaining power with their publishers. Established musical artists with immense clout can demand higher advances and royalty rates from their record labels. These are precisely the people seen on the stage for Tidal.

Now, if there was evidence that this increase in price would stimulate greater innovation in the field, this might be justified on efficiency grounds. There is a well-noted tradeoff between innovation and access: ceterus paribus, the more you increase copyright, the less access there is to existing works, complements of added monopoly power, but it makes acquiring copyrights more profitable and hence gives a greater incentive for artists to produce new works. There are certainly diminishing returns at the extremes, particularly in a 100% copyright world, which becomes a pure tragedy of the anti-commons. The effects of a 0% copyright world are still up for debate.

If new independent or unknown artists support Tidal and begin to use it, then the new service might justify the added cost to users. These lesser known artists, however, are more likely to support piracy and streaming as free advertising to help them churn out the real money made by (non-superstar) artists — merchandising and concert revenues. Thus, unless they find that Tidal gives them a bigger boost relative to other methods, odds are this system will not stimulate much musical innovation. Should that be the case, then it seems like this move is just to raise rents for existing copyright holders, rather than stimulate a new music revolution.
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Let’s not also forget the obvious fact that raising the price for music services makes piracy all that more attractive to many consumers, should popular bands emigrate exclusively to Tidal. It was arguably Spotify and co.’s freemium model that dissuaded many would-be pirates in the first place such that nobody really talks about song piracy anymore (it’s video these days).

– – – – – – –
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* The modern age of Bittorrent, however, provides a potential caveat. One could argue that people who have diverse interests might be more likely to illegally download movies and songs that aren’t superstars to save money. Consider “I don’t want to waste my time at the movie theater to see that crappy horror flick X, I’ll just download it; but the new action [franchise] blockbuster movie in 3D, that’s something we have to go see!”

Further typologies of property

My first typology of property is here. In it I differentiate between contract enforcement among family/friend, anonymous strangers, and government.  Adam Gurri responded, postingray ban sunglasses Best Price

You are definitely correct that the literature and experience has demonstrated that voluntary mechanisms are possible and widespread. Instead, it’s a matter of whether you can stop strangers from breaking into your house and stealing your stuff without government, which to my mind is a separate question from how behavior within the context of transactions is disciplined. I’m not sure the answer is as clear there; certainly *some* sort of threat of force is often required.

His point made me realize my typology was incorrect. We must not only consider the enforcement of contracts, but also immediate violence and theft. Therefore, the typology can be further broken up. Below is a table illustrating the possibilities.

Contracts Violence/theft
Family/friends 1 2
Anonymous strangers 3 4
Government 5 6

The first question is what protects against breaking contracts or violence and theft among family and friends, 1 and 2 in the table. The answer, repeated interaction.  It is a losing strategy to defect when the person is able to defect the next round.  This is a consensus among economists that state enforcement is unnecessary for small homogeneous groups.
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The second part is more interesting, how to enforce contracts among anonymous strangers, 3 in the table, and how to ensure there is no violence and theft against anonymous strangers 4. Most economists are unclear on the distinction between the two options, however it is an important one. There is much evidence, international trade being the primary one, that state enforcement is unnecessary to protect contracts among anonymous strangers.  However, as Gurri pointed out, the state is likely necessary to protect against violent expropriation from anonymous strangers.
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As such, the state exists less to protect private property per se, and more to protect against a specific type of encroachment on private property. In fact, given that many major American cities did not have police departments until the mid 19th century, it seems state exist primary to prevent large scale violence.
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The last section is less interesting.  Government has little incentive to violate contracts because it is usually easier to directly expropriate wealth.  The disagreement is how to ensure government does not expropriate wealth.

A typology of property

Property is not a relation between men and an object. Rather, it is a relation between men and other men about an object. It is a set of implicit and explicit norms governing a set of rights over objects, who can do what to what object. My ownership of the computer I am typing this on affords me a series of rights about a set of actions I am able to take with this computer that others are not able to take.
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With this in mind, I want to propose a typology of property. Because property is defined by the relation of men amongst men, property can be differentiated by the different types of relationships amongst men. There are two sets of players in property, the owner(s) and the non-owners. By differentiating the non-owners there are three main categories which can be differentiated.  First, property where the non-owners are family and close friends.  Second, property where the non-owners are anonymous strangers.  Third, property where the non-owners are government.
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It is important to clarify that all property has all three relationships.  However, because each group of non-owners will treat the property differently it  is useful differentiating them as an analytic tool.  Family and friends rarely need explicit contracts governing their relationships.  Instead, repeated interaction is sufficient to generate incentives to prevent abuse of property.  Anonymous strangers require explicit contracts in order to ensure they do not abuse property.  Explicit contracts are insufficient to protect property from governments.  Instead, the government must be constrained by a series of norms which constrain its action set.
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Take, for example, a house.  With a house usually family is allowed to use it to a wide set of ends.  Of course, there are certain implicit rules, do not burn down the house for example.  However, immediate is generally given permission to raid the fridge, cook, sleep on couches, watch tv, etc.  Friends are typically a little more constrained.  Close friends might be able to enter and exit as they please, but usually the owner requires his presence for them.  However, no explicit contract binds them.

Anonymous strangers have a different set of rules for a house.  With the success of airBnB, we can see how renting a house to strangers differs from letting family members crash there.  There is an explicit contract detailing what the strangers may and may not do.  There is typically a defined way to resolve such disputes if they do arise.  Third party enforcement works for the anonymous strangers.
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Third party enforcement does not, on the other hand, work for government.  Because government has a territorial monopoly of force, they can choose to violate contracts if they wish.  Instead, government is constrained by two things; a set of norms which define acceptable actions for government and power relations among groups in the ruling coalition.
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Such a distinction is useful for analyzing economic growth.  Virtually all economists agree that contracts are stable in small homogeneous groups, essentially family and friends.  While there is disagreement over whether government is needed to enforce contracts among anonymous strangers, most evidence suggests markets can come up with mechanisms to enforce contracts among anonymous strangers.  However, ensuring a government does not plunder a populace is far more difficult.  Markets alone are unable to do so.
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While this typology is present in the works of many economists, Hayek differentiates between family and friends and strangers, Acemoglu and Johnson differentiate between strangers and government, it has never, to the best of my knowledge, been explicitly presented.  I imagine most of the dispute among economists is whether markets can enforce contracts among anonymous strangers without government.  However, as I believe a close reading of the evidence, the existence of international trade, and the sharing economy demonstrate, the real problem lies in constraining government.



Seeing the world as a social scientist vs. as a nationalist

When mass protests against corruption and economic privation began erupting in Venezuela last year, followed by brutal police crackdowns and the disappearing and killing of protesters by government forces and government-backed militias, I naively thought the American Left might take an interest in the protesting side. After all, they were mainly young people upset at the system that was failing them, and the protests seemed to have evolved organically throughout large parts of the country. It didn’t seem to matter how the American Left had approved of Hugo Chávez, cautiously in pockets and enthusiastically in other pockets, for 15 years. After all, Chávez was dead, and it wouldn’t have lost them too much face to declare that his successor, Nicolás Maduro, had betrayed the revolution. Killing peaceful protesters is usually enough to establish bad guy status. Though Maduro was a Chávez disciple and largely continued his policies, it didn’t seem to be asking much to say that some kind of tide had turned.
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But no, where there was a reaction at all it was to point out that one of the major opposition figures, Leopoldo López, was alleged to have links with the CIA. (It is difficult to confidently pinpoint exactly what these links involved, but I am not disputing the major theme.) Thus the argument implicitly ran that what appeared to be an organic social movement was secretly being orchestrated or at least manipulated by the CIA and thus was not eligible for sympathy or support. López turned himself in to avoid being labeled as the mastermind and tarnishing the rest of the movement, and he remains incarcerated at present.
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Though my frustration with the Left continues, I should have been prepared for the disappointment. After all, this phenomenon has happened time and time again. Orwell began his essay “Notes on Nationalism” with
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Somewhere or other Byron makes use of the French word longeur, and remarks in passing that though in England we happen not to have the word, we have the thing in considerable profusion. In the same way, there is a habit of mind which is now so widespread that it affects our thinking on nearly every subject, but which has not yet been given a name. As the nearest existing equivalent I have chosen the word ‘nationalism’, but it will be seen in a moment that I am not using it in quite the ordinary sense, if only because the emotion I am speaking about does not always attach itself to what is called a nation — that is, a single race or a geographical area. It can attach itself to a church or a class, or it may work in a merely negative sense, against something or other and without the need for any positive object of loyalty.

By ‘nationalism’ I mean first of all the habit of assuming that human beings can be classified like insects and that whole blocks of millions or tens of millions of people can be confidently labelled ‘good’ or ‘bad’. But secondly — and this is much more important — I mean the habit of identifying oneself with a single nation or other unit, placing it beyond good and evil and recognising no other duty than that of advancing its interests. …

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In this case, of course, the “nationalism” I refer to is loyalty and emotional attachment to the global “progressive” movement, many of whose goals I share. Because Chávez was considered (by many) to be part of this movement and Maduro is his handpicked successor, the attachment extends to the Venezuelan government of 2014–2015, i.e. the regime that is still causing economic disaster and beating, disappearing, and killing protesters.
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But why is it that so few people seem to be capable of nuance or complexity in politics? It is entirely possible for one to believe, for example, that Chávez did a lot of bad things while with the other hand doing a lot of good things. One can also believe that the CIA is generally up to no good and hence its support of López taints him while also believing that López might locally be considered a legitimate political leader who is preferable to Maduro. This mindset makes sense to me, and it’s not unfamiliar to most people in the US, where the majority of this blog’s readers reside. Take Thomas Jefferson. Most of us can agree that (a) Jefferson had a lot of good, important, insightful ideas about how governments should be run, and at the same time that (b) his advocacy of and personal involvement in the system of chattel slavery are completely despicable, especially given that he seemed in his more lucid moments to have known better. Why is applying this framework to current events and people so uncommon?Clearance Oakley sunglasses

This Month in IP Insanity (January 2015)

In keeping with my new monthly feature, here is this past month’s IP news:

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  1. We know Tom Petty won’t back down. He just won a lawsuit against Sam Smith for infringing Petty’s copyrights on the song “Stay With Me,” requiring Smith to give Petty royalties. This is the third time Petty has sued someone for copyright infringement over similar sounding songs. Perhaps it is because Petty’s music is so fundamental as a building block for Rock n’ Roll that everything starts sounding the same. Either way, looks like Tom Petty is okay with free fallin’, not so much free ridin’.
  2. Not quite a story on the intellectual property wars, but I find it relevant. A Harvard Ph.D student had a manuscript of complete gibberish (literally written with Random Text Generator) accepted in seventeen medical journals. Granted, they are lower-tier journals who spam out email solicitations, and he would have to pay $500 to “process” them, so this isn’t Nature or the New England Journal of Medicine. His paper is entitled “Cuckoo for cocoa puffs? The surgical and neoplastic role of cacao extract in breakfast cereals” and you can read the whole “paper” at the link. Reminds me of the heroic Sokal affair.
  3. Another offbeat story but I find it interesting, television producers no longer focus on the first season as a metric for deciding to produce future seasons. With more people cutting cords, binge watching on their own schedule, and simply waiting for word of mouth to rate shows they’ve “gotta see,” the real money is now in the second season.
  4. If you needed a new casebook study of what was once an innovative industry giant turning to rent-seeking and the political process once they lose their competitive edge, look no further than BlackBerry (formerly RIM). The company wants Congress to pass a law mandating that all app developers must develop a BlackBerry version to go with the more popular iOS and Android versions. Their argument? We should broaden the definition of “net neutrality” to “application neutrality,” meaning developers should be forced to produce for all platforms, no matter how irrelevant and obsolete, in the name of openness. Maybe BlackBerry forgot about the Open Source movement.
  5. As if they were trying to make it harder for me to begrudgingly root for them tomorrow, the Seattle Seahawks are trying to trademark the words “boom,” “go hawks,” and the number “12.”
  6. Taylor Swift, who is transforming me into a hater for her views on music, is trying to trademark “this sick beat” and other catchphrases from her 1989 album, like “Party Like It’s 1989.”  Do people say even that?
  7. Yet another trademark story, this time it’s the MPAA who forced a local Minneapolis brewer to stop selling “Rated R” beer. Apparently, as long as the beer contained the trademarked word ‘rated’ it would still be liable, according to the MPAA. Frankly I don’t really see how consumers are likely to be confused, deceived, or mistaken about the source of the goods or services. Does the MPAA even sell beer?
  8. Torrentfreak posted a link to a new art project out of Australia, Pirate Cinema, which livestreams a collage of videos that people are streaming simultaneously on Bittorent. If you want to try to watch 3 or 4 movies at the same time, try this.
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  10. A revealing natural experiment in Norway. From 2009-2014, Norwegians under 30 dramatically stopped illegally downloading music, from 80% of those surveyed saying they did download, to just 4%. Yet, in that same period, despite the collapse of music piracy (mostly due to legal streaming services), Norwegian music revenues increased just 1.5% in nominal terms (likely negative when including inflation). Maybe piracy isn’t the real problem in the media industries?
  11. Lastly, like a Phoenix rising from the ashes, the Pirate Bay is back. It’s apparent return will disrupt the innovation and competition that’s been going on between spinoffs and rivals like Kickass Torrents and isoHunt, the latter of which recently offered $100,000 to the old Pirate Bay’s most active contributors to boost its publicity. Also, apparently not all of the former TPB staff are happy about TPB’s return.
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