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Showing 9 of 37 Publications by Paul H. Rubin
Popular Media One topic that has long interested me is the source of dislike or hatred of capitalism; my Southern Economics Journal article “Folk Economics” (ungated version) . . .
One topic that has long interested me is the source of dislike or hatred of capitalism; my Southern Economics Journal article “Folk Economics” (ungated version) dealt in part with this topic. Today’s New York Times has an op-ed, “Capitalists and Other Psychopaths” by William Deresiewicz, who has taught English at Yale and Columbia, that both illustrates and explains this hatred. What is interesting about this column is that it is entirely about the character and behavior of “the rich” including entrepreneurs. The job creating function of business is briefly mentioned but most of the article focuses on “fraud, tax evasion, toxic dumping, product safety violations, bid rigging, overbilling, perjury.”
What is nowhere mentioned is anything to do with the goods and services produced by business. This is a common attitude of critics of capitalism. In many cases, capitalists may suffer the same personality defects as the rest of us. And, as Mr. Deresiewicz points out, scientists, artists and scholars may also be hard working and smart. But capitalism does not reward moral worth or hard work. Capitalism rewards providing stuff that other people are willing to pay for. While is is easy to point out the stupidity of the critique (Mr. Deresiewicz has written and seems proud of his book, published by a capitalist publisher and available from various capitalist booksellers) that is not my point. Rather, this column is interesting in that it is a pristine example of a totally irrelevant critique of capitalism, written by what is a smart person. He does cite Adam Smith, but seems to misunderstand the basic functioning of markets. Markets reward what one does, not what one is.
Filed under: business, corporate social responsibility, economics, entrepreneurship, markets, social responsibility
Popular Media The EU is apparently thinking of adopting common and highly restrictive privacy standards which would make use of information by firms much more difficult and . . .
The EU is apparently thinking of adopting common and highly restrictive privacy standards which would make use of information by firms much more difficult and would require, for example, that data be retained only as long as necessary. This is touted as pro-consumer legislation. However, the effects would be profoundly anti-consumer. For one thing, ads would be much less targeted, and so consumers would get less valuable ads and would not learn as much about valuable prodcts and services aimed at their interests. For another effect, fraud and identity theft would become more common as sellers could not use stored information to verify identity. Finally, costs of doing buisness would increase, and so we would expect to see fewer innovations aimed at the European market, and some sellers might avoid that market entirely.
Filed under: privacy
Popular Media The fight over SOPA is about the ownership of intellectual property. Rights to intellectual property have two effects. The benefits of intellectual property are the . . .
The fight over SOPA is about the ownership of intellectual property. Rights to intellectual property have two effects. The benefits of intellectual property are the incentives for creation. The costs are that after some work is created any price above marginal cost (which is often zero for digital property) will discourage valuable use.
Every piece of intellectual property than now exists was created with the incentives that were in place when it was created. No change in intellectual property rights can have any effect on existing works. Therefore, any change in property rights should be entirely prospective. That is, any change in property rights should effect only works copyrighted after the passage of the legislation.
Of course, there are huge rents associated with the ownership of existing rights, and fights over these rents will continue. But we should recognize that these fights are over rents — payments which have no incentive effects. If our goal is efficiency, we should stop wasting resources on these fights and start from now.
Filed under: copyright, intellectual property, truth on the market
Popular Media By now everyone is probably aware of the “tracking” of certain cellphones (Sprint, iPhone, T-Mobile, AT&T perhaps others) by a company called Carrier IQ. There . . .
By now everyone is probably aware of the “tracking” of certain cellphones (Sprint, iPhone, T-Mobile, AT&T perhaps others) by a company called Carrier IQ. There are lots of discussions available; a good summary is on one of my favorite websites, Lifehacker; also here from CNET. Apparently the program gathers lots of anonymous data mainly for the purpose of helping carriers improve their service. Nonetheless, there are lawsuits and calls for the FTC to investigate.
Aside from the fact that the data is used only to improve service, it is also useful to ask just what people are afraid of. Clearly the phone companies already have access to SMS messages if they want it since these go through the phone system anyway. Moreover, of course, no person would see the data even if it were somehow collected. The fear is perhaps that “… marketers can use that data to sell you more stuff or send targeted ads…” (from the Lifehacker site) but even if so, so what? If apps are using data to try to sell you stuff that they think that you want, what is the harm? If you do want it, then the app has done you a service. If you don’t want it, then you don’t buy it. Ads tailored to your behavior are likely to be more useful than ads randomly assigned.
The Lifehacker story does use phrases like “freak people out” and “scary” and “creepy.” But except for the possibility of being sold stuff, the story never explains what is harmful about the behavior. As I have said before, I think the basic problem is that people cannot understand the notion that something is known but no person knows it. If some server somewhere knows where your phone has been, so what?
The end result of this episode will probably be somewhat worse phone service.
Filed under: advertising, consumer protection, privacy, regulation, technology, telecommunications, wireless
Popular Media Today’s Wall Street Journal has a long article-debate on privacy. The strongest pro-privacy is Christopher Soghoian of the Open Society Institute. He confuses commercial privacy . . .
Today’s Wall Street Journal has a long article-debate on privacy. The strongest pro-privacy is Christopher Soghoian of the Open Society Institute. He confuses commercial privacy with government privacy:
“The dirty secret of the Web is that the “free” content and services that consumers enjoy come with a hidden price: their own private data. Many of the major online advertising companies are not interested in the data that we knowingly and willingly share. Instead, these parasitic firms covertly track our web-browsing activities, search behavior and geolocation information. Once collected, this mountain of data is analyzed to build digital dossiers on millions of consumers, in some cases identifying us by name, gender, age as well as the medical conditions and political issues we have researched online.”
When asked “Why is that a problem” he replies
“Many of the dangers posed by digital dossiers do not occur regularly, but are incredibly destructive to people’s lives when they do. An unlucky few will be stalked, fired, surveilled, arrested, deported or even tortured, all as a result of the data kept about them by companies and governments. Much more common are the harms of identity theft or public embarrassment. Even when companies follow best practices—and few do—it is impossible to be completely secure.”
Note that “parasitic firms” are collecting the data which is then used for arrest, deportation, and torture. A bit of a disconnect. Identity theft is a problem, but the risk is decreasing and the costs are almost always low. Moreover, identity thieves are crooks, not firms.
What is particularly interesting about the article is the survey data reported. It demonstrates peoples’ confusion about the issues. 92% of the adults surveyed “Think that there should be a law that requires websites and advertising companies to delete all stored information about an individual” but between 32% and 47% would like websites to provide information of some sort (ads: 32%, discounts: 47%, or news: 40%) “tailored to their interests.” But of course these numbers are totally inconsistent. If websites cannot keep any information about an individual, then they cannot provide tailored information since there will be nothing on which to base the tailoring. The relevant questions are tradeoff questions, but the reported survey does not address these.
Filed under: advertising, privacy
Popular Media The New York Times reports that the most recent price for a taxi in New York medallion is $1,000,000. Wikipedia reports that there are 13,237 . . .
The New York Times reports that the most recent price for a taxi in New York medallion is $1,000,000. Wikipedia reports that there are 13,237 licensed cabs in New York. (A “medallion” is the physical form of a taxicab license.) This means that the present value of the rents created by limiting taxicabs is $13,237,000,000 — thirteen billion dollars. This is just the rents; the total lost consumer surplus is much greater because the lack of taxicabs creates substantial deadweight losses. For example, I am confident that many people have cars in New York only because they cannot count on getting a cab. Cabs change shifts during rush hour because they can earn less at this time and so that is when they go out of Manhattan to change drivers, just when demand is greatest. (This is also caused by the relatively too low price for waiting compared with the price for driving.) There is a proposal which will make it easier for limousines to pick up passengers. Of course, the taxi owners are opposed to this plan, but it would clearly be an efficient change.
Filed under: business, licensing, regulation Tagged: New York, Taxicabs
Popular Media I was invited to attend the Financial Times Global Conference “The View From the Top: The Future of America” and since I was in New . . .
I was invited to attend the Financial Times Global Conference “The View From the Top: The Future of America” and since I was in New York anyway I thought it would be fun. I don’t hang around with macro types much, and even less with liberal macro types. I will not summarize the entire conference, but a few observations:
Filed under: business, economics, Education, financial regulation, markets, sarbanes-oxley Tagged: macro
Popular Media Stewart Baker at the Volokh Conspiracy has a very interesting post on the new Amazon browser. He thinks it might revolutionize doing business on the Web, with a tremendous increase in security. . . .
Stewart Baker at the Volokh Conspiracy has a very interesting post on the new Amazon browser. He thinks it might revolutionize doing business on the Web, with a tremendous increase in security. This increase in security will entail a loss in privacy, so let’s hope the privacy guys don’t stop it.
Filed under: business, Internet search, markets, privacy Tagged: Amazon’s new browser
Popular Media In a much anticipated move, the Federal Trade Commission has started a formal monopolization investigation of Google . Because of its dominance in the search market, Google . . .
In a much anticipated move, the Federal Trade Commission has started a formal monopolization investigation of Google . Because of its dominance in the search market, Google has been in the antitrust crosshairs for some time now, both in the U.S. and in Europe. U.S. antitrust enforcers blocked a proposed joint venture with Yahoo in 2008, and more recently barely cleared the acquisition of travel site software company ITA. The E.U. is already investigating Google over allegations it has abused its dominant position in online search.